To consider any items which the Chair has agreed to have submitted as urgent.

Upon opening the meeting, the Chair informed members that meetings of the Resources and Governance Scrutiny Committee would be held on Thursday mornings from the start of the new municipal year in May 2023.

To approve as a correct record the minutes of the meeting held on Tuesday, 8 November 2022.

Decision:

That the minutes of the meeting held on Tuesday, 8 November 2022 be approved as a correct record.

Report of the Strategic Director – Neighbourhoods.

This report provides an update on the new governance arrangements (Housing Advisory Board) in respect of the Council Housing Stock.

The Committee considered a report of the Strategic Director – Neighbourhoods, which provided an update on the new governance arrangements in respect of the Council’s housing stock. The new Housing Advisory Board provided oversight of Manchester City Council Housing Services, which was formerly Northwards ALMO, and was a key contributor to empowering tenants and ensuring that North Manchester residents helped to shape and held the Council’s Housing Service to account.

Key points and themes within the report included:

·         In January 2021, Manchester City Council agreed to bring the ALMO Northwards Housing back in house and the transfer of the ALMO took place on 5 July 2021;

·         The Housing Advisory Board began meeting in July 2022 and the Resources and Governance Scrutiny Committee was instrumental in its formation;

·         The purpose of the Housing Advisory Board and the key responsibilities of Board Members;

·         The Board meets bi-monthly and was made up of 5 local residents/tenants, 6 elected members (including the Chair, Exec Member for Housing and Development) and 3 co-opted housing professionals;

·         The recruitment of the resident members to the board received a very high response, with over 300 residents expressing an interest. Officers remain in contact with all applicants to ensure a diverse network to engage with on future plans and current performance;

·         Deep dive sessions on areas of particular focus and interest, such as the Housing Revenue Account, Zero Carbon and the Social Housing Bill, are undertaken as part of the Board’s collective learning and development; and

·         There are two audit recommendations to fully implement over the remainder of the financial year, which relate to learning and development and further equalities reporting.

Key points and queries that arose from the committee’s discussion included:

• A previous recommendation made by the Committee for all Housing Advisory Board agendas to be circulated to all members, and why this had not happened;
• Whether the Board’s remit required revision to include private finance initiative (PFI) properties;
• How the Board could encourage residents to remain engaged; and
• The number of voids - when a property is unoccupied for a period of time – and what was causing such a high level.

In introducing the item, the Executive Member for Housing and Development advised the committee that the Housing Advisory Board had met three times and that the governance of the Board was robust.

Members of the Housing Advisory Board, including a local elected member and independent co-opted members, attended the meeting and provided their insights into the work of the Housing Advisory Board. They explained their motivations for joining the Board and their role in holding the Board to account.

The Director of Housing Operations responded to members’ queries and committed to sharing all past and future agendas for the Housing Advisory Board to members.

The Executive Member for Housing and Development acknowledged a local gap in the governance of PFI properties and welcomed members’ feedback.

In response to a member query on further engagement with residents, the Director of Housing Operations confirmed that this would  ...  view the full minutes text for item 55.

Report of the Deputy Chief Executive and City Treasurer, Strategic Director (Development) and Strategic Director (Neighbourhoods).

This report presents members with an update on the ongoing work being undertaken to finalise the 2023/24 Housing Revenue Account (HRA) budget, the final proposed budget will be brought back to Members in March as part of the overall Council budget approvals.

The committee considered a report of the Deputy Chief Executive and City Treasurer, Strategic Director – Growth and Development and Strategic Director – Neighbourhoods which provided an update on the ongoing work being undertaken to finalise the 2023/24 Housing Revenue Account (HRA) budget. The final proposed budget would be brought back to Members in March as part of budget approvals.

The report also outlined the current assumptions for the 2023/24 HRA budget and the impact of the proposals on both the HRA and tenants, given the current economic climate and cost-of-living pressures.

Key points and themes within the report included:

·         The HRA is a ring-fenced account and must, in general, balance on a year-to-year basis, so that the costs of running the Housing Service, can be met from HRA income;

·         The Government stipulates that registered providers may not increase rents by more than Consumer Price Inflation (at September of the previous year) plus one percentage point in any year, although the Chancellor of the Exchequer announced in the November 2022 Autumn Statement that social housing rents would be capped at an increase of no more than 7% due to current high inflation rates.

·         HRA reserves are forecast to be around c£90m at the end of the current financial year (2022/23) and are forecast to reduce to around £44m by 2026/27;

·         As of October 2022, the HRA is forecasting that expenditure for the current year will be £17.7m higher than income and this would be funded through the use of reserves

·         The HRA budget was being modelled on the basis of a 7% rent increase to all tenants with effect from April 2023 and if this increase is approved by members, it would produce an average weekly rent (based on 52 weeks) of:

o   General Needs £83.88 (£5.49 increase)

o   Supported Housing £76.45 (£5.00 increase)

o   PFI Managed £98.15 (£6.42 increase)

·         Housing benefit levels had not been capped and any approved rent increase would be covered in full for those residents in receipt of 100% Housing Benefit entitlement or Universal Credit (housing element).

The key points and queries which arose from the committee’s discussions included:

• Whether the government would fund the difference between the 7% rent cap and 11.1%, which would have been the proposed increase had the rent cap not been applied;
• Work undertaken to mitigate inflationary pressures and ‘bad debt’, including non-payment of rent;
• The extra work required to address voids and issues with damp and mould in properties;
• Whether any flexibility was built into the budget regarding heat charges, given that the energy price cap will end in March 2023;
• How the Council was ensuring deliverability on the contract with Equans, who were commissioned to bring voids back into use;
• Seeking clarification as to whether the Council had assumed an annual 3% rent increase from 2024/25 onwards;
• Types of hardship funds and cost-of-living support provided by other Registered Providers in Manchester;
• Residents’ views on the level of voids in Manchester, and whether there were any particular “hotspots”  ...  view the full minutes text for item 56.

Report of the Deputy Chief Executive and City Treasurer.

This report provides members with an update on the impact of recent changes in financial and construction markets on the capital programme and provides an update on the proposed capital budget process for 2023/24.

The Committee considered a report of the Deputy Chief Executive and City Treasurer which provided an update on the impact of recent changes in the financial and construction markets on the capital programme and provided an update on the proposed capital budget process for 2023/24.

Key points and themes within the report included:

·         The current forecast for the approved capital programme over this year and the next 3 years is £1,037.8m;

·         The Council has seen costs rise across the programme since the start of 2022 and some projects have sought budget increases given the severity of the cost increases;

·         Whilst the forecast over the medium term is for inflation to subside, the price increases are not expected to reverse;

·         The cost of debt available to the Council from the Public Works Loan Board has on average more than doubled since December 2021, resulting in increased ongoing revenue costs associated with additional borrowing;

·         The current approved programme remains affordable and the Council has budgeted for capital financing costs across a number of years and built up a capital financing reserve from funding including underspends in the historic annual capital financing budget to smooth the effects of potential increases in interest rates;

·         A set of principles were proposed to ensure that the limited capital resources are prioritised to achieve best value for money. Projects should demonstrate that they support corporate priorities, including both low carbon and social value, and will be supported to proceed if:

o   the project is fully funded by external grants and contributions;

o   the project generates additional capital receipts to the Council, so the impact on resources is minimal; or

o   the project will generate a robust net income stream or revenue savings that is sufficient to meet the associated capital financing costs and therefore be funded on an invest to save basis

·         Additional borrowing will only be considered for funding a project as a last resort, if there are no other funding sources available and the project is of critical importance to the Council;

·         Proposed changes to the approval process for capital expenditure, to ensure it remains fit for purpose, reflects best practice and provides a strategic top-down as well as bottom-up approach to the development of the future programme;

·         Proposals would continue to be developed and would form part of the Capital Strategy to go to Executive in February 2023.

In introducing the item, the Chair informed the committee that he had recently undertaken a tour of the Town Hall, which was undergoing renovation, and encouraged other members to do the same.

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

·         The proposed changes to when key decisions are taken on capital expenditure, and the impact this would have on the call-in process;

·         Requesting an update on the progress of the Council’s Levelling Up Funding (LUF) bid;

·         If the Council was intending on taking a tougher line on Section 106 payments given the necessity of this revenue stream;

·         Expressing concern over a suggestion  ...  view the full minutes text for item 57.

Report of the Deputy Chief Executive and City Treasurer.

This report updates on the main announcements from the Autumn Statement delivered by the Chancellor of the Exchequer, Jeremy Hunt MP, to the House of Commons on 17 November 2022, with a focus on the implications for local government funding.The position will be clearer in late December 2022 when the Local Government Finance Settlement is received.

The committee considered a report of the Deputy Chief Executive and City Treasurer which provided an updates on the main announcements from the Autumn Statement delivered by the Chancellor of the Exchequer, Jeremy Hunt MP, to the House of Commons on 17 November 2022. The report also focused on the implications of the Statement for local government funding.

Key points and themes within the report included:

·         A total of £55bn was announced in either public spending cuts or tax rises;

·         Pensions and benefits were increased by the September 2022 inflation rate of 10.1% and would come into place in April 2023;

·         Government department spend will increase more slowly than planned, below the current inflation rate, with exceptions in health and education, which have had increases in their budgets;

·         The financial impact on the Council’s position remained unknown until the finance settlement is received in late December;

·         Positive announcements were around increased funding for adult social care, a continued freeze of the business rates multiplier and an extension and enhancement of the Retail, Hospitality and Leisure (RHL) reliefs scheme into 2023/24, plus a Supporting Small Business Scheme (SSBS);

·         The announcements within the Autumn Statement were expected to have a positive impact on the funds available to the council for the next couple of years but there remained significant unknowns around the New Homes Bonus, the Services Grant and the Fair Funding Review; and

·         The Statement’s focus on three core priorities for economic growth -energy, infrastructure and innovation.

The Executive Member for Finance and Resources stated that there were some positives announced in the Chancellor’s Autumn Statement, although he asserted that many difficult decisions after 2025 would need to be taken by local authorities and not the government.

He explained that the Council would benefit from compensation from the business rates multiplier freeze and increased funding for adult social care. The Council’s financial position would become clearer upon receipt of the Finance Settlement, which was expected in late December 2022.

He advised the committee that there was inadequate support within the Autumn Statement to mitigate against the financial implications currently facing local authorities and there was no guarantee that future funding would rise in line with inflation.

Decision:

That the report be noted.

Report of the Deputy Chief Executive and City Treasurer.

This report advises on the methodology of calculating the City Council's council tax base and business rates income for budget setting purposes for 2023/24, along with the timing of related payments and the decision on business rates pool membership.

The committee considered a report of the Deputy Chief Executive and City Treasurer which outlined the methodology of calculating the City Council's council tax base and business rates income for budget setting purposes for 2023/24. The report also explained the timing of related payments and the decision on business rates pool membership.

Key points and themes within the report included:

• The calculation of the council tax base is the number of dwellings within the Council’s boundary presented as ‘Band D equivalent’. Dwellings outside Band D are converted into a proportionate Band D value and individual band bills are calculated in the ratios proportionate to Band D;
• The number of properties is adjusted to take account of discounts and exemptions for disabled occupants, single occupiers, students, exempt dwellings and reductions in accordance with the council tax support scheme and non-collection of council tax;
• The fluctuating numbers of students and the transient population in Manchester make it difficult to predict how many properties will be exempt, empty or occupied by a single person;
• Manchester has been part of the Greater Manchester business rates retention pilot since 2017/18 which means that 99% of yield will be retained by the Council and 1% paid to the Greater Manchester Combined Authority;
• The starting point for the calculation of the business rates base is the estimate of gross business rates payable by business ratepayers in 2023/24 and is adjusted by the forecast cost of mandatory and discretionary reliefs;
• The Council is required to estimate any business rates surplus or deficit on their Collection Fund for the relevant year and any such estimated surplus or deficit is shared between the billing authority and the Greater Manchester Combined Authority;
• An application was submitted to Government for the ten Greater Manchester authorities to form a Business Rates Pool in 2023/24 and each authority will need approval, through its respective governance arrangements, with a final decision on whether to participate in the 2023/24 Pool required within 28 days of the Provisional Local Government Finance Settlement, which is expected in late December; and
• Payment dates for the share of council tax payable to the Greater Manchester Combined Authority must be agreed and notified before 31 January 2023. The payment dates are proposed as the 20th of each month for 2023/24; and
• How the Council approaches Council Tax debt recovery.

In introducing the item, the Chair thanked officers for providing additional information regarding the Council’s procedure for debt recovery, which was included as an addendum to the report.

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

·         Commending the Council for a reduction in using enforcement agents to recover debts, and querying what more could be done to reduce this;

·         The Council’s procedure for dealing with complaints made against Enforcement Agents;

·         Noting that the recovery process would stop if a resident contacted the Council and made and kept to an arrangement for payment;

·         The need to recognise those facing mental health issues and how this impacts their ability to  ...  view the full minutes text for item 59.

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 considered the report by the Governance and Scrutiny Support Unit which provided details of key decisions that fell within the Committee’s remit and the Committee’s work programme, which was to be amended as appropriate and agreed.

In response to a query regarding the Major Contracts Oversight Board, which the committee had recommended be established, the Deputy Chief Executive and City Treasurer confirmed that a meeting had taken place in November with a further one scheduled for January 2023. It was agreed that a report on the work of the Board would be added to the Committee’s work programme for a suitable time.

Decision:

That the report be noted and the work programme agreed.