Manchester City Council

Agenda and minutes

Agenda and minutes

Economy Scrutiny Committee
Wednesday, 5th December, 2018 2.00 pm

Venue: Council Ante Chamber, Level 2, Town Hall Extension

Contact: Michael Williamson 

Webcast: View the webcast

Items
No. Item

54.

Minutes pdf icon PDF 142 KB

To approve as a correct record the minutes of the meeting held on 7 November 2018.

Additional documents:

Minutes:

The minutes of the meeting held on 7 November 2018 were agreed as a correct record.

55.

Update on Revenue Financial Strategy and Business Plan Process 2019/20 pdf icon PDF 419 KB

Report of the Chief Executive and City Treasurer

 

This report provides an update on the Council’s financial position and sets out the next steps in the budget process, including scrutiny of the draft Budget proposals and Directorate Business Plan reports by this Committee. 

 

The report also summarises Officer proposals for how the Council could deliver a balanced budget for 2019/20.

Additional documents:

Minutes:

The Committee considered a report of the Chief Executive and the City Treasurer which provided an update on the Council’s financial position and set out the next steps in the budget process.  The report summarised Officer proposals for how the Council could deliver a balanced budget for 2019/20.

 

In conjunction to the above, the Committee also received and considered the Strategic Development Business Plan for 2019/20, which set out in broad terms the directorate’s key priorities, key activities and revenue and capital strategy for 2019/20, which was a refresh of the directorate’s Business Plan for 2018/20 in the context of current resources, challenges and opportunities.

 

Taken together, the report and the directorate Business Plan illustrated how the directorate would work together and with partners to deliver Our Plan and progress towards the vision set out in the Our Manchester Strategy.

 

Some of the key points that arose from the Committees discussions were:-

 

·                Why was there lower than expected Council Tax growth;

·                What assumptions had been made that underpinned the anticipated income from Business Rates;

·                What assumptions had been made on the anticipated increase in customer and client receipts in relation to planning applications;

·                What was the time scale for implementing the proposed increases in relation to planning fee income

·                Who would be reviewing all planning fee income as referred to in the report; and

·                What was considered to be a comparatively low number of agency staff as referred to in the report.

 

The Deputy City Treasure advised that Council Tax growth was originally projected at 3.5% based on the number of properties that were intended for development over the course of this financial year.  At present, the growth was at 2.23% and this was mainly due to the timing of when properties were coming on stream.   She also explained that some of the assumptions that had been made in relation to the expected income from Business Rates were based around the growth of businesses  within the city, some inflationary changes and assumptions regarding the impact of the 100% retention pilot which ensured that the Council was no worse off than under the 50% retention scheme.  It was explained that due to the volatility of Business Rates related to the number of appeals, projecting the actual revenue income was difficult. 

 

The Strategic Director (Development) advised that in relation to the increase in planning fees, it had been agreed with HM Treasury that all income would be ring fenced to the service.   As this was the first year of this additional income a prudent view was needed going forward in respect of a possible Brexit ‘No Deal’ and the negative effect that this could have on commercial and residential growth and the associated impact to the Council’s income.  He reported that the Council had established some years ago a level of reserves to provide a short term solution should planning fee income reduce, but a longer term view would be required. 

 

The Strategic Director (Development) advised that as the Council’s Planning service  ...  view the full minutes text for item 55.

56.

Delivering Manchester's Affordable Housing Strategy - Update on the delivery of the Council's affordable housing strategy pdf icon PDF 311 KB

Report of the Strategic Director (Development)

 

This report provides an update on the delivery of the Council’s affordable housing strategy.

Additional documents:

Minutes:

The Committee considered a report of the Strategic Director (Development), which provided an update on the delivery of the Council’s affordable housing strategy.

 

The Director of Housing and Residential Growth referred to the main points and themes within the report which included:-

 

·                An overview of the Councils 10 year residential growth strategy and progress to date;

·                The level of social housing provision within the city;

·                A synopsis of Manchester’s housing market and affordability;

·                The Council’s delivery of affordable housing over the last three years and its proposals for the delivery of further affordable homes up to 2025;

·                Investment opportunities resulting from the establishment of the Housing Affordability Fund; and

·                Housing provision for older and vulnerable people, including access to suitable properties.

 

Some of the key points that arose from the Committees discussions were:-

 

·                Was it possible to inform Members of the sites proposed for the additional 150 homes and what process was used to include Ward Councillor in identifying these locations;

·                In relation to affordability figures, was there any figures available in relation to help Manchester residents with deposits;

·                Was there any evidence from other core cities that a more balanced housing market was able to attract more working households;

·                Was there any connection between the disparity of worker and resident wages in the city and the rise in homelessness;

·                Why was the Shared Ownership and Affordable Homes Programme (SOAHP) undersubscribed;

·                What was being done to address the issue of families living in overcrowded social housing;

·                Why was the Local Housing Allowance higher in Wythenshawe in comparison to the rest of the city as this was proving problematic for Wythenshawe residents who were on low incomes; and

·                How successful had the Council been, in working with its public and private partners in delivering the Housing Affordability Framework.

 

The Executive Member for Housing and Regeneration advised that Ward Member consultation was ongoing and acknowledged the need to include Ward Councillors in discussions in the earlier stages of the process of identifying sites.  The Director of Housing and Residential Growth advised that prior to the HRA Cap being lifted, the Council had applied for some HRA headroom and in doing so had identified a number of potential sites which added up to 150 homes, with the locations being indicative for the purpose of the bid.  There would be need to revisit these initial allocations and hold discussions with local Ward Councillors before any final proposals were determined.

 

The Strategic Director (Development) reported that the only metric the Council had in relation to the support provided to residents for deposits was through the help to buy government scheme.  The Committee was also advised that the Council had launched a small scheme to help those who could afford a mortgage repayment, but were not able to save for a deposit and although this scheme was new, there was a high demand for this form Manchester residents.  He also advised that more work was needed to be undertaken as to whether there was evidence from  ...  view the full minutes text for item 56.

57.

Delivering Manchester's Affordable Housing Strategy - Proposed new affordable housing policies for the Council pdf icon PDF 505 KB

Report of the Executive Member for Housing and Regeneration

 

This report sets out proposed new affordable housing policies for the Council.

Additional documents:

Minutes:

The Committee considered a report of the Executive Member for Housing and Regeneration, which set out proposed new affordable housing policies for the Council.

 

The Executive Member referred to the main points and themes within the report which included:-

 

·                The affordable housing context for the City;

·                The challenges the Council’s affordable housing policy needed to address;

·                The opportunities that were available to the Council to invest in and deliver more housing;

·                An overview of funding new affordable homes;

·                A range of policy ideas proposed to deliver a step change in the number and tenure of affordable homes being built across the City;

·                The additional resources needed by the Council to deliver the proposed policy ideas;

·                Associated risks affecting Manchester’s affordable housing supply;

·                Other considerations that would be required to be taken into consideration in shaping and taking forward these policies; and

·                Next steps.

 

The Committee had been invited to comment on the report prior to its submission to the Executive on 12 December 2018.

 

Some of the key points that arose from the Committees discussions were:-

 

·                The was overwhelming support from Members in relation to the proposed polices;

·                It was felt that the good collaborative work with Registered Providers needed to continue in order to deliver suitable social rented properties;

·                It was hoped that the proposed establishment of new vehicles to enable residents to own their own homes would be fast tracked into a reality;

·                What was being done to avoid the stigmatization of Housing Affordability Zones as being referred to as new ‘council estates’:

·                Would it be possible to commit to building more Council homes than what was being lost through Right to Buy;

·                Consideration needed to be given to the design of future properties to ensure that these were zero carbon developments;

·                Would the proposal to unlock smaller sites and developments within wards across the city to develop a local strategy and solution to positively encourage a range of tenants to downsize not conflict with the priorities of other Executive Members and the use of that land;

·                There was a need to address the number of Council homes being sold under Right to Buy before new Council houses were built;

·                Reassurance was sought that older people and those who were vulnerable would not be pressured into downsizing their council properties

·                It was felt that the proposed policy in relation to community housing development should not be restricted to just three pilot areas, and it should also offered to those areas and communities that wanted this type of development;

·                What were the timescales for the finance and legal considerations of the policy proposals to be taken into account;

·                How would the Council deliver the proposed 3000 new homes if the Total debt cap was not lifted;

·                How would the proposal to bring the HRA back into balance interact with the proposed policies;

·                Had a team been identified to undertake the feasibility study of housing in the city centre and if so what progress had been made; and

·                Was it  ...  view the full minutes text for item 57.

58.

Overview Report pdf icon PDF 354 KB

Report of the Governance and Scrutiny Support Unit

 

This report provides the Committee with details of key decisions that fall within the Committee’s remit and an update on actions resulting from the Committee’s recommendations. The report also includes the Committee’s work programme, which the Committee is asked to amend as appropriate and agree.

Additional documents:

Minutes:

The Committee considered a report of the Governance and Scrutiny Support Unit which contained key decisions within the Committee’s remit and responses to previous recommendations was submitted for comment. Members were also invited to agree the Committee’s future work programme. 

 

Decision

 

The Committee:-

 

(1)       Notes the report;

(2)       Agrees the work programme

59.

Manchester College Estates Strategy (Part A) pdf icon PDF 387 KB

Report of the Strategic Director (Development) and City Treasurer 

 

This report to provides an update on the LTE Group’s progress in acquiring a city centre site located within the Northern Gateway Great Ducie Street Regeneration area for the Manchester College city campus, which is a key part of its estates strategy.

 

 

Additional documents:

Minutes:

The Committee considered a report of the Strategic Director (Development) and City Treasurer, which provided an update on the LTE Group’s progress in acquiring a city centre site located within the Northern Gateway Great Ducie Street Regeneration area for the Manchester College city campus, which was a key part of its estates strategy.

 

Officers referred to the main points and themes within the report which included:-

 

·                An overview of Manchester College’s Estates strategy, which included the proposal to consolidate the estate from 24 disparate sites into three centres of excellence in the City Centre and Openshaw, supported by community learning hubs in Harpurhey, Openshaw and Wythenshawe;

·                The new campus would focus on Manchester’s employment growth sectors and new markets, where technological change required a more highly skilled and adaptable workforce,;

·                To meet the College’s ambitions, a new city centre campus needed to be accessible by public transport and create a high quality and safe environment to inspire  learners to achieve;

·                Land to the east of Great Ducie Street had been identified as the preferred site for the new City Centre campus;

·                The proposed arrangements to fund the delivery of the new city centre campus, which included a loan funding package of £27.6m from the Council; and

·                The College's approach to the proposed development of the City Centre campus would mean that the City would be well placed to deliver the new technical pathways which were being proposed as part of the Government's Post-16 Skills Strategy and critical to the delivery of the Industrial Strategy.

 

The Committee had been invited to comment on the report prior to its submission to the Executive on 12 December 2018.

 

Some of the key points that arose from the Committee’s discussions were:-

 

·                The Committee welcomed the proposed development;

·                It was suggested that transport connectivity to the proposed development be improved;

·                What were the future proposals for the College’s St Johns site; and

·                It was questioned whether the learning hubs would have A level provision.

 

The Head of Work and Skills advised that it was intended that the learning hubs would deliver vocational qualifications up to first level 3 (equivalent to A levels) and as learners specialised, it was intended that they would move to the centres of excellence within the city either undertaking a levels or the new Technical levels (T Levels), with opportunities for apprenticeships and Higher Education as well.

 

 

 

In terms of connectivity, The Strategic Director (Development) advised that there would be a requirement to embed the proposal in a revision of the Great Ducie Street Framework and in essence the site would require its own framework , which would include addressing the known issues of getting students to the new college campus safely from across the city. He also commented that in terms of the future of the College’s other city centre assets, the first step was to establish a new campus.  The College would then look to withdraw and dispose of other locations in order to pay down its  ...  view the full minutes text for item 59.

60.

Exclusion of Press and Public

The officers consider that the following item contains exempt information as provided for in the Local Government Access to Information Act and that the public interest in maintaining the exemption outweighs the public interest in disclosing the information. The Committee is recommended to agree the necessary resolutions excluding the public from the meeting during consideration of this item.

Additional documents:

Minutes:

Decision

 

The Committee agrees that the following item contains exempt information as provided for in the Local Government Access to Information Act and that the public interest in maintaining the exemption outweighs the public interest in disclosing the information.

61.

Manchester College Estates Strategy (Part B)

Report of the Strategic Director (Development) and City Treasurer 

 

This report sets out plans for the Manchester College to bring forward a central element of their 2017 – 2022 Estate Strategy for a new city centre campus and sets out proposals for the City Council to support the Manchester College in its acquisition of this site.

Minutes:

The Committee considered a report of the Strategic Director (Development) and City Treasurer, which set out plans for the Manchester College to bring forward a central element of their 2017/22 Estate Strategy located within the Northern Gateway Great Ducie Street Regeneration area, and set out proposals for the City Council to support the Manchester College in its acquisition of this site.

 

The Committee had been invited to comment on the report prior to its submission to the Executive on 12 December 2018.

 

Officers referred to the main points and themes within the report and responded to questions from the Committee.

 

Decision

 

The Committee

 

(1)          Endorses the recommendations contained within the report that the Executive:-

 

·           Note the proposed contractual and commercial arrangements between the City Council and the College details of which are set out in the body of this report.

·           Note that the Manchester College will promote a new Development Framework for the site which they are acquiring, taking into account the consented scheme on part of the site and the final version of the Great Ducie Street Strategic Regeneration Framework which is currently under consultation;

·           Note that LTE Group have put in the submission for Greater Manchester Combined Authority (GMCA) skills capital funding of up to £25m, which has been approved in principle dependant on a final due diligence exercise.

·           Approve the proposed loan of £27.6m to LTE Group the details of which are set out in this report;

·           Authorise the City Solicitor, City Treasurer and Strategic Director – Development, in consultation with the Executive Member for Finance and Human Resources, to conclude the detailed contractual and commercial negotiations in respect of the proposed loan and necessary security arrangements and such other commercial transactions as set out in this report; and

·           Authorise the City Solicitor to enter into and complete all documents or agreements necessary to give effect to the proposed loan and associated security arrangements the details of which are as set out in this report.

 

(2)          Requests that the Executive take into consideration the following concerns of the Committee in relation to the proposed loan to the LTE Group when making its decision:-

 

·                The Committee has strong concerns as to the security arrangements for the Council’s loan and the ability of the LTE Group to repay this and that these concerns should be addressed in the ongoing due diligence work;

·                The Committee asks for clarifications on what other sources of finance  LTE Group had approached to secure the funding required for the purchase of the site; and

·                The Committee notes that the Council is undertaking  ongoing due diligence to ensure the Council’s position is protected and is compliant with all relevant statutory and legal duties and functions.

 

(3)          Notes that Council is recommended to approve a capital budget increase of £27.6m funded by borrowing.

 

[Councillor Hacking declared a Disclosable Pecuniary Interest in this item due to being a Director of the LTE Group and a Governor of Manchester College.  He left the meeting during consideration of this  ...  view the full minutes text for item 61.