Agenda and draft minutes
Budget, Resources and Governance Scrutiny Committee - Monday, 24th February, 2020 10.00 am
Venue: Council Antechamber, Level 2, Town Hall Extension. View directions
Contact: Michael Williamson
The following procedure applies for this item:-
(i) The Committee will receive a statement by the Executive Member for Finance and Human Resources on the Executive’s budget proposals and the key issues underlining the budget process;
(ii) The Committee is invited to consider any issues arising from individual Directorate Budget Plans that chairs of scrutiny committees wish to draw specific attention to;
(iii) The Committee is invited to receive a Statement from the Executive Member for Housing and Regeneration regarding the Housing Revenue Account calculations and to consider any amendment proposed in relation to the Housing Revenue account 2020/21 to 2022/23;
(iv) The Committee is invited to consider any amendments to the budget proposals; and
(v) The Committee is invited to summarise its findings and formulate its recommendations to the Council meeting on 6 March 2020.
Further to minute RGSC/20/8, the Committee considered a report of the Chief Executive and the Deputy Chief Executive & City Treasurer which provided an update on the Council’s financial position following scrutiny of the draft budget proposals and Directorate budget plans by all Scrutiny Committees.
The Committee received statements from both the Leader and the Executive Member for Finance and Human Resources on the Executive’s budget proposals and the key issues underlying the budget process. In doing so, they outlined the context of the proposed budget, in particular, they referred to the continued challenges presented by the funding reductions from national government, referencing pressures on Adult Social Care, Children’s Services and Homelessness in the city. They also advised that there would likely be budgetary implications going forward arising from the Council’s commitment to address climate change over the next five years and the potential impact of future funding arrangements as a consequence of the outcome of the Fair Funding Review and the likelihood of the 100% Business Rate retention pilot ending in 2021/22 and the baseline for growth being reset.
They also thanked all the Scrutiny Committees for their input into scrutinising the budget proposals to date within each Directorate’s budget plan, noting that whilst Scrutiny Committees had identified areas that they felt required additional funding, it would not be prudent for the Council to use its reserves at this current point in time, given that it was only able to set a one year budget and the uncertainty of future years funding.
The Committee then received a statement from the Executive Member for Housing and Regeneration regarding the Housing Revenue Account calculations for 2020/21 to 2022/23 and its use. She advised of the challenges the Council faced in delivering its housing ambition that had arisen from the imposition of a 1% annual rent cut for four years from 1 April 2016 and the impact of this on the financial viability of social housing and the amount of resources to invest in improving existing stock. She also referred to the financial implications of “Right to Buy” on the Council HRA Business Plan and the estimated costs in retrofitting the Council’s existing housing stock as part of the Council’s commitment to reduce its carbon emissions. The Executive Member reported that following government changes to the social rent policy, a 2.7% increase in dwelling rents was being proposed and assured the Committee that this increase would be within Local Housing Allowance levels.
The Chair then invited the other Scrutiny Chairs in attendance to bring to the Committees attention any concerns/issues that had arisen from their scrutiny of individual Business Plans. The Chair of Children and Young People’s Scrutiny made the following salient points:-
· Whilst the additional investment into Children’s Services was welcomed, it was acknowledged that this would not resolve all issues or address the level of demand;
· There was concern that whilst School budgets had increased, this increase only reflected the number of children in the city;
· Whilst there was increase in ... view the full minutes text for item 16.
The report of the Deputy Chief Executive and City Treasurer is now enclosed.
The Committee considered a report of the Deputy Chief Executive and City Treasurer, which provided an update on the progress with the Our Town hall project to date, including the intention to issue a Notice to Proceed (NTP) into the main construction phase of the Works.
The Deputy Leader briefly outlined the report, which contained the following key points and themes:-
· The current status of the project, including activity to date, and the governance and procedures that were in place to manage the project through the construction period and into project completion;
· The Council had engaged Lendlease as its Management Contractor to manage the project, procure the works, advise on risk and to contract with works package contractors who had the primary responsibility for undertaking the works;
· The contract with the Management Contractor required that before the Council issued the NTP it had to satisfy itself that a number of key documents and dates had been agreed with the Management Contractor, including the supplemental particulars, project cost plan, date of completion, and the preliminaries cost schedule. These documents were now agreed, and as such the project was ready to progress into the construction period;
· The Council’s Internal Audit team had reviewed the procurement process in the run-in to NTP and were satisfied that a transparent and robust process had been applied to secure the completion of RIBA stage 4;
· The budget would become more defined by Notice to Proceed and as the various works packages were procured. However, the Council would not have cost certainty until the final account was agreed under the Management Contract; and
· The appetite within the insurance market to cover construction risk, particularly heritage buildings, has reduced significantly in the wake of recent fires and although a range of insurers had committed to provide 100% cover for the various insurable risks, some aspects of final terms and the formal placement of cover was to be finalised and it was possible that the final terms of the insurance policies would require amendments to the Management Contract.
Some of the key points that arose from the Committees discussion were:-
· Clarification was sought on the level of engagement that had been undertaken with insurance companies;
· What incentives were in place for the Management Contractor to control preliminary costs;
· How advanced were the operational needs of the project and where these detailed in RIBA Stage 4;
· Were there any KPI’s going to be included for the Project to address climate change;
· Was there any detail that could be shared in relation the monitoring framework is being developed between Unite and Lendlease to ensure that this and the Unite Charter was appropriately reflected throughout the project supply chain and an assurance was sought that Trade Union representatives would being given access to the site during the course of construction; and
· Could information be provided on how many of the apprentices currently employed on the project were Manchester residents.
The Committee was advised that there had been a large amount of engagement ... view the full minutes text for item 17.
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.
To exclude the public during consideration of the following items which involved consideration of exempt information relating to the financial or business affairs of particular persons and public interest in maintaining the exemption outweighs the public interest in disclosing the information.
Our Town Hall Project - Notice to Proceed (Part B)
The report of the Deputy Chief Executive and City Treasurer is now enclosed.
The Committee considered a report of the Deputy Chief Executive and City Treasurer, which provided details of the projected cost plan for the main construction phase of the Our Town Hall Project, prior to the Council issuing of the Notice to Proceed instruction to the Management Contractor.
The Committee asked questions to which the Officers provided responses
The Committee notes that the project cost plan (for Construction) has been agreed with the Management Contractor in the terms described in the report.