To allow Members an opportunity to [a] declare any personal, prejudicial or disclosable pecuniary interests they might have in any items which appear on this agenda; and [b] record any items from which they are precluded from voting as a result of Council Tax/Council rent arrears; [c] the existence and nature of party whipping arrangements in respect of any item to be considered at this meeting. Members with a personal interest should declare that at the start of the item under consideration. If Members also have a prejudicial or disclosable pecuniary interest they must withdraw from the meeting during the consideration of the item.

Councillor Stogia declared a prejudicial interest on items 7 and 11 – Our Town Hall Project Progress Update – and would leave the meeting for the duration of these items.

Councillor Wheeler declared a non-prejudicial interest on items 9 and 13 – Major Contracts Update.

To approve as a correct record the minutes of the meeting held on 5 September 2024.

Decision: That the minutes of the meeting held on 5 September 2024 be approved as a correct record.

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.

The committee received a report of the Governance and Scrutiny Support Unit which provided details of key decisions that fell within the Committee’s remit and any items for information previously requested by the Committee.

The Chair informed the committee that an item on Bridgewater Hall had been withdrawn from the work programme for November. He also stated that the Budget Scrutiny meeting scheduled for Monday 24 February had been moved to Wednesday 26 February at 4:30pm to enable consideration of any amendments to the budget following the submission deadline.

Decision: To note the report.

Report of the City Treasurer.

This report outlines the current position of the Medium-Term Financial Plan (MTFP) and the planned approach to setting the 2025/26 budget process.

The committee considered a report of the City Treasurer which outlined the current position of the Medium-Term Financial Plan (MTFP) and the planned approach to setting the 2025/36 budget.

Key points and themes within the report included:

·       Providing an introduction and background to the annual budget-setting process;

·       Manchester had delivered over £440m of savings since 2010 to cope with the funding cuts and unfunded budget pressures;

·       The MTFS identified that the Council, in keeping with other upper tier local authorities, needed to address a material budget shortfall in 2025/26 and beyond;

·       There was an estimated budget gap of £65k over the three years to 2027/28 after the use of smoothing reserves;

·       The main assumptions underlying the position forecast, including government grant funding and cost pressures;

·       The proposed principles on which the 2025/26 budget would be developed;

·       Business rates income for 2024/25 to date was better than expected and 2025/26 income should be uplifted in line with the September CPI, which should result in additional resources; and

·       Officers had been challenged with identifying £50m of savings for members’ consideration and work on the 2025/26 budget started early, with draft proposals to be presented to Scrutiny Committees in November.

Some of the key points and queries that arose from the committee’s discussions included:

·       Why interest costs and indications of borrowing were not included in the report; and

·       Whether a recent report by the Institute for Government which stated that the money available to councils was 10% lower than in 2010 was true for Manchester; and

·       The Council had received a cumulative budget cut of £3bn since 2011.

The Executive Member for Finance and Resources stated that a budget gap of £29m for 2025/26 was forecasted when the 2024/25 budget was set and the process of identifying how to reduce this gap had started soon after that budget was set. He welcomed the change of government earlier this year which would provide multi-year financial settlements for local authorities from 2025. He acknowledged the biggest budgetary challenge to be in-year overspend, which amounted to approximately £17.4m, and work was ongoing to reduce this as any overspend would need to be funded from the General Reserve Fund. He explained that £18m of smoothing reserves would be used in the next 3 years to close the budget gap. He highlighted that this report was the first step in the budget-setting process and that the Council was awaiting the outcome of the government’s Autumn Statement, with the committee being updated on this and the budget position in the coming months.

In response to a member’s query regarding interest costs, the City Treasurer explained that these were incorporated into Corporate Costs in the Forecast MTFS table (table one) within the report. The Treasury Management Strategy outlined all costs related to interest on borrowing and interest earned on investments and more detail would be provided at a future meeting.

The City Treasurer stated that the Council would have an additional £74m per year in funding if it received the  ...  view the full minutes text for item 70.

Report of the Deputy Chief Executive.

This report provides a further update on the progress with the Our Town Hall project since the last report to Resources and GovernanceScrutiny Committee in July 2023. It covers the exemplary quality of the work being delivered, the project’s exceptional social and economic legacy for Manchester and the challenges still faced by the project at the point that 75% of the works are complete.

The committee considered a report of the Deputy Chief Executive which provided a further update on progress with the Our Town Hall project, which involved the refurbishment and partial restoration of the Town Hall and Albert Square, since the last update to the committee in July 2023.

Key points and themes within the report included:

·       The refurbishment and partial restoration of the Town Hall and Albert Square was the largest heritage project in the UK to date;

·       Progress against the social value key performance indicators (KPIs), with the project forecasted to deliver £15.06m in return-on-investment through social value;

·       Progress with works, such as package procurement and construction which was now 75% completed;

·       The Management Contractor currently forecasted completion of the works to be in July 2026;

·       The findings of an independent third-party review of the management and leadership of the project;

·       Providing an update on challenges that had emerged and were ongoing;

·       Programme risk and the current financial position, with the project seeking Council approval for a further £76m based on an assessment of potential cost pressures, to be funded from borrowing; and

·       Steps identified to improve the programme and cost position.

Some of the key points and queries that arose from the committee’s discussions included:

·       Welcoming the detail and transparency of the report;

·       Interest against borrowing;

·       Why challenges of achieving the required level of fire resistance in a heritage setting were being experienced when there was learning from similar external projects;

·       How residents and particularly children could be brought along on the restoration journey;

·       Highlighting the importance of the project and its complexities;

·       The context behind the decision to proceed with the restoration and refurbishment of the Town Hall; and

·       Expressing concerns about suppliers’ pricing.

The Deputy Chief Executive introduced the report and highlighted that this was the biggest restoration project in the country to date. He stated that the biggest challenges facing the project were the unexpected aspect of discovery works and the impacts of the Covid pandemic, inflation increases and supply chain issues. The Project Director echoed these comments, highlighting the complexity and scale of the project, and stated that the project team working on the restoration of the Palace of Westminster would take learning from the Our Town Hall project.  

In response to queries regarding interest costs from borrowing, the City Treasurer explained that the Council’s capital programme, which the Our Town Hall project was part of, was large and complex. A sizeable proportion of this programme was funded from borrowing. He stated that all borrowing was managed through the Treasury Management Strategy and a report on interest costs, level of debt and the underlying need to borrow was provided through the budget-setting process, a mid-year update and final outturn report to Audit Committee. He further explained that the Council had a budget of interest received worth net £50m, which had been underspent as the capital programme progressed and underspends consequently moved to reserves to soften any fluctuations in the market. He acknowledged that there would  ...  view the full minutes text for item 71.

Report of the Deputy Chief Executive and Strategic Director (Growth and Development).

This report provides information relating to Aviva Studios’ business plan. This report is accompanied by a Part B report, which outlines the confidential commercial elements of the business plan.

The committee considered a report of the Deputy Chief Executive and the Strategic Director (Growth and Development) which provided detail on Aviva Studios’ business plan, as requested by the committee.

Key points and themes within the report included:

·       Providing an introduction and background to Factory International and Aviva Studios;

·       Coverage and feedback from the opening of Aviva Studios;

·       KPIs had been developed for the performance of Aviva Studios, Manchester International Festival (MIF) and Factory Academy which featured in various funding agreements between Factory International, the Council, Arts Council England, and Aviva. Good progress was made against all KPIs in FY23/24, and another positive report is expected in 2024/25;

·       The governance arrangements for Aviva Studios’ performance, including the MCC Factory International: Operations & Governance Oversight Group, the Factory International Strategic Board, Factory International Board of Trustees and regular meetings between MCC officers and Factory International management;

·       Recognising some challenges in the opening period, particularly as a result of the slower-than-expected opening of St John’s which resulted in limited passing footfall;

·       The current financial position and a request from Factory International to reprofile the management agreement between itself and the council, currently running at £1.5m to 2031, to provide some additional financial capacity; and

·       Opportunities with external partners and organisations.

Some of the key points and queries that arose from the committee’s discussions included:

·       Thanking officers for answering some of the committee’s initial queries within the report;

·       What specific measures were in place to ensure long-term financial sustainability;

·       What additional efforts were underway to engage and provide opportunities for Black, Asian and Minority Ethnic (BAME) groups;

·       Reiterating that the Council was not responsible for the financial health of Factory International;

·       Highlighting some feedback on signage, queues, service time, transport, accessibility, publicising ticket prices and Wi-Fi connectivity;

·       Whether Factory International was looking into capital loan smoothing over the mid- to long-term or capital grant fundraising to increase cashflow;

·       Seeking assurance that casual vacancies were not being offered as zero-hour contracts;

·       Whether employees were informed of their right to join a trade union as part of their onboarding;

·       How Factory International engaged with children and schools to raise the profile of the arts and cultural sector as an employment area; and

·       What offers were in place for low-income and disadvantaged households.

The Deputy Leader commented that Aviva Studios was a bold and ambitious building that was already benefitting Manchester. He emphasised the global offer of Factory International and its wide audience reach but emphasised the importance of a connection and sense of place within Manchester and its communities. He also highlighted the governance arrangements in place and explained that a reprofile of funding arrangements was proposed to help strengthen the new organisation as it establishes and that this would not include any additional resource. 

The Chief Executive and Artistic Director, Factory International expressed gratitude on behalf of Manchester’s cultural sector to the Council for its investment in Factory International. He highlighted the international attention garnered for the project and the quality of artists and events  ...  view the full minutes text for item 72.

Report of the City Treasurer.

This report updates the committee on the Council’s key contracts, the initial impact of the Contract Management System and the approach to procurement of major contracts including assessments of how to source contracts due for renewal and/or extension.

The committee considered a report of the City Treasurer which provided an update on the Council’s key contracts, the initial impact of the Contract Management System and the approach to the procurement of major contracts including assessments of how to source contracts due for renewal and/or extension.

Key points and themes within the report included:

·       Providing an introduction and background to major contracts and the framework;

·       Performance across all major contracts had generally been assessed across the year by contract managers at either green or amber level;

·       The Council’s Sourcing Policy, which had been approved by Executive in February 2024 and had a noticeable impact on recommissioning plans;

·       Delivery Model Assessment outcomes to date since the previous report;

·       Ongoing work on ICT contracts;

·       Financial risk remained a key risk to major contracts; and

·       Progress and achievements anticipated in the next two quarters.

The Head of Integrated Commissioning and Procurement highlighted developments since the last update to the committee in March, such as the implementation of a new Contract Management System which was improving data and information to help better manage contracts. He stated that the Major Contracts Board had been focusing on the first three objectives listed within its Terms of Reference, which were appended to the report.

The committee noted that a supplementary Part B report would be considered during closed session.

Decision:

That the report be noted.

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.

Decision:

That the press and public be excluded during consideration of the following items which involved consideration of exempt information relating to the financial or business affairs of particular persons and the public interest in maintaining the exemption outweighed the public interest in disclosing the information.

Report of the Deputy Chief Executive.

This report provides additional information that is of a commercially sensitive nature to supplement the Our Town Hall Project – Progress Update Part A report.

The committee considered a confidential report of the Deputy Chief Executive which provided additional information of a commercially sensitive nature on the Our Town Hall project to supplement the Part A report.

The report highlighted the changes in resources for the project and provided additional financial information. Some lines of enquiry that emerged during the committee’s discussion included claims from contractors; total revenue costs; the governance structure of the project; and the planned completion date.

Members also noted that a further update would be provided in March 2025 and the Chair reiterated the committee’s gratitude for the openness and transparency within both the Part A and the Part B reports.

Decision:

That the report be noted.

Report of the Deputy Chief Executive and the Strategic Director (Growth and Development).

This report provides information on the Factory International business plan. This report is accompanied by a Part A report elsewhere on this agenda.

The committee considered a confidential report of the Deputy Chief Executive and Strategic Director which provided further detail on the Factory International business plan.

The report highlighted attendance and participation, training and employment opportunities, strategic objectives, KPI results and provided a financial summary for Factory International. As part of their discussion, the committee queried whether information on visitor attendance, engagement and reach could be shared publicly. They also queried the sufficiency of the reprofiling agreement in ensuring financial and business sustainability.

Decision:

That the report be noted.

Report of the City Treasurer.

This Part B report is an annex to the Part A Major Contracts Update and provides a summary of the major contracts discussions at the Major Contracts Board and an update on the current focus for each contract.  

The committee considered a confidential report of the City Treasurer which provided a summary of the major contracts discussions at the Major Contracts Board and an update on the current focus for each contract.

The committee’s discussion focused on the housing repairs and maintenance contract; the importance of considering the workforce when insourcing a service; the levers available to the Council to question the validity of products; and commending the security services contracted to the Town Hall Extension and Central Library.

The committee also requested further information on the Council’s electricity supplier and the Highways and Infrastructure Works Construction Framework.

Decision:

That the report be noted.