Hothfield Parish Council the rustic heart of Kent


MINUTES 135                                                    Page 613

Minutes of the ExtraOrdinary Parish Council Meeting

held at The Village Hall, Hothfield,

on Thursday 13 November 2014 at 7.00 pm


Mr L Krause (Chair), Mrs D Hogben, Mrs P Sutcliffe, Mr J Collins,
Mr M Cook, Mr P Howard, Mr R Libbeter
and Mr D Parker


There were no Members of the Public present.


An Apology for Absence was received from Borough Councillor Robey.



Declarations of Pecuniary Interest

There were no Declarations of Pecuniary Interest from councillors present.


Declarations of Significant Interest

There were no Declarations of Significant Interest from councillors present. 

i)    Updating of Declarations of Interest for the Code of Conduct

                  Councillors are reminded that they should update their Declarations of Interest

                  with the Monitoring Officer if necessary.



After the last meeting, the councillor who had offered to underwrite the loan had been told by Ashford Borough Council that this would not improve the position for the parish council as it would still constitute a loan.


Although the Clerk, Mr Powell, the Parish Council Advisor at the KALC and the Internal Auditor had all advised that the proposal for funding the installation of broadband in the village should be sent to NALC, for a formal legal opinion on the project, following a conversation between Mr Krause and Mr Powell, an email was received from Mr Powell in which he said “that he had been unaware, until that conversation took place, that the relationship with ABC was that the Parish Council had been formally instructing the Borough Solicitor and therefore, if that was the case then NALC Legal would be unable to work for Hothfield Parish Council as NALC Legal are bound by legal etiquette.”


Mr Krause explained that what he had actually told Mr Powell was that Hothfield Parish Council had received an explanation of the legalities involved in the project from the Borough Solicitor, and no instruction was ever given.


Mr Howard reported that he had spoken to the Parish Council’s Internal Auditor, and Mr Funnell’s advice was that if the members of the Parish Council were satisfied with the explanatory notes they had received from ABC then they could act on them.


The Clerk reported that Mr Funnell had told her that, following his conversation with Mr Howard, he was unable to give any other advice other than to say that it was the responsibility of all the members to make sure that they were acting within their powers. 


The question as to whether it would be legal for the Parish Council to reclaim all of the VAT was also raised and it was suggested that advice should be sought from HMRC.


Ashford Borough Council has given the Parish Council a commentary on how officers had considered the borrowing facility, in the form of an explanatory note, which councillors had read and following discussion on all the advice received, both prior to and since last week’s meeting the following resolutions were agreed upon:-


Payment from Section 137 Local Government Act 1972 (the general spending power). 

Resolution: The members of Hothfield Parish Council are satisfied that, taking into account the advice received from the Parish Clerk, the KALC and the Internal Auditor and following consultation with ABC, they have considered and are satisfied that they meet the two principle tests required to fulfil their eligibility to purchase broadband under Section 137 Local Government Act 1972 (the general spending power). 


The two principle tests are as follows:-


Firstly, the parish council must be satisfied that there is a direct benefit to the area or part of the area, or to some or all of the inhabitants.  The parish council is the body to determine whether or not such benefit will accrue and a decision by the parish council could only be challenged on the ground that it was wholly unreasonable and or/is otherwise in breach of the law.


Secondly, the council must ensure that the direct benefit accruing to its area or residents is commensurate with the expenditure incurred.  This means that a council should not spend a disproportionately large amount on something which has no or very little direct benefit.


Under this power the members of Hothfield Parish Council unanimously agreed to ratify their decision of 5 November 2014 to pay BT £3200 towards the cost of the installation of broadband in the parish under Section 137 of the Local Government Act 1972 (the general spending power).



The Clerk informed councillors that, following verbal advice from the KALC and the Parish Council’s Internal Auditor, guidance should be sought from HMRC as to whether the Parish Council could reclaim the VAT for the entire project. 


Resolution:  Councillors unanimously agreed that, following the information in the explanatory note received from ABC, guidance was not required as the Parish Council would not be acting ultra vires by authorising the installation of broadband in the parish and so would not be acting illegally by submitting a VAT Claim for £1480, the entire VAT element of the cost payable to BT of the first payment.


Councillors unanimously agreed to draw a cheque (number 001293) for £1480.00 in favour of BT Plc. 


Temporary Borrowing

Councillors unanimously agreed, having taken all the advice previously received into account and having read the explanatory note from ABC, that further advice was not required as they would be acting within their powers under Schedule 1 to the Local Government Act 2003, which includes provisions that are specific to parish councils, as under this schedule, parish councils may borrow funds temporarily in anticipation of revenues, where those revenues are due in the same period of account.


The borrowing must be for a purpose where the parish council has the power and function to incur expenditure.  Councillors consider S137 to be such a power/function.


Resolution:  Councillors unanimously agreed to enter into a Temporary Borrowing Agreement with ABC for £4200, for the outstanding sum due to BT, under Schedule 1 to the Local Government Act 2003.  The loan to ABC will be repaid by 31 March 2015.


Repayment of Temporary Borrowing

The Clerk advised that KALC and the Internal Auditor recommended that the Council should to seek advice from the NALC regarding the power to repay a temporary loan.   The KALC has since informed the council that this is no longer possible due to legal etiquette.  It was unanimously agreed not to seek further legal advice.


Resolution:  After reading the explanatory note from ABC, councillors were again satisfied that further advice was not required as paragraph (b) under Section 137 (4B) allows a parish council to deduct the amount of any borrowing repayment from their total expenditure under s137 in the current financial year and that they would not be acting illegally by entering into a temporary borrowing with ABC, provided the loan is paid back by 31 March 2015.  


Resolution:  Councillors unanimously expressed their gratitude to the members and officers at Ashford Borough Council for the explanations received with regard to this project and agreed to accept the offer of a temporary borrowing facility from Ashford Borough Council.



With regard to the above and taking all the advice, explanations and information received from the Clerk, the KALC and the Internal Auditor into consideration and following extensive consultation with ABC, Councillors confirmed that they did not consider it necessary to take any more advice on this subject and that the Parish Council is acting within its powers by contracting BT Plc to install fibre optic broadband into the parish of Hothfield and funding it as follows:-


Hothfield Parish Council to pay £3200.00 to BT Plc – Section 137 Local Government Act 1972 (the general spending power). 


Hothfield Parish Council to pay £1480 to BT Plc – the VAT element to be reclaimed and paid over to Ashford Borough Council to offset the amount borrowed under the temporary borrowing agreement - paragraph (b) under Section 137 (4B)  Local Government Act 1972 (the general spending power).     


Hothfield Parish Council to enter into a temporary borrowing agreement with Ashford Borough Council for £4200.00 to be repaid by Hothfield Parish Council, once the contribution has been received from Haymaker Energy -- paragraph (b) under Section 137 (4B)  Local Government Act 1972 (the general spending power).  


Resolution:  Councillors unanimously agreed that the Chairman and if needed Vice Chairman should sign all the relevant documents, without further delay, in order to progress this  project.


Proposed  Mr Libbeter                                 Seconded  Mr Collins                                  Unanimous


There being no other business the meeting closed at 7.55 pm.


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Last Update ~ 02.12.2014  
 2014 Hothfield Parish Council