Manchester City Council

Agenda and draft minutes

Agenda and draft minutes

Resources and Governance Scrutiny Committee
Tuesday, 5th November, 2019 10.00 am

Venue: Council Antechamber, Level 2, Town Hall Extension

Contact: Michael Williamson 

Webcast: View the webcast

Items
No. Item

60.

Minutes pdf icon PDF 168 KB

To approve as a correct record the minutes of the meeting held on 8 October 2019.

Additional documents:

Minutes:

Decision

 

To approve the minutes of the meeting held on the 8 October 2019 as a correct record.

 

61.

Minutes of the Human Resources Sub Group pdf icon PDF 280 KB

To note the minutes of the Human Resources Sub Group meeting of 15 October 2019.

 

Additional documents:

Minutes:

Decision

 

To note the minutes of the meeting held on the 15 October 2019 as a correct record.

62.

Annual Property Report 2018/19 pdf icon PDF 273 KB

Report of the Strategic Director (Growth and Development)

 

This report provides an update on property activity since the last Annual Property Report to Resources and Governance Scrutiny Committee in November 2018. It reviews activity across the Development Team, including the Investment Estate; the Operational Estate; and the Heritage Estate. The report includes an update on the specific areas requested in the Scrutiny Committee’s work programme, including the Council’s Asset Management Strategy (whole lifecycle cost and maintenance, including public realm); and governance of land transfers and Community Asset Transfers.

 

 

 

Additional documents:

Minutes:

The Committee considered a report of the Strategic Director (Growth and Development), which provided an update on property activity since November 2018.   The report reviewed activity across in Development and the Investment, Operational and Heritage estates.  The report also included an update on the Council’s Asset Management Strategy and governance of land transfers and Community Asset Transfers (CAT).

 

The main points and themes within the report included:-

 

·                The delivery and operation of the Council’s Digital assets which included The Sharp Project, Space Studios Manchester and Arbeta (previously One Central Park);

·                The on-going development of Manchester Airport and Enterprise Zone;

·                The development of City Centre schemes involving Council assets which included First Street, Jacksons Row/Bootle Street, St Johns, Heron House, Mayfield Regeneration Area, Circle Square, Portugal Street East and Bridge Street and Kendals;

·                Details of other commercial and employment development, including Central Retail Park, Didsbury Technology Park, Central Park and New Smithfield Market;

·                Work with Strategic Housing, Planning and other partners to deliver the Council’s objectives for Housing;

·                Involvement in a range of initiatives to improve the quality and offer in district centres

·                Property input in relation to leisure, sport and education provision;

·                The management of a programme of strategic acquisitions

·                Income from the Council’s investment estate, particularly from its property interests in the Airport

·                The management of the Council’s non-operational (investment) estate and transactional work;

·                An overview of the Operational Estate activity and Asset Management Programme;

·                Progress with the Council’s Carbon Reduction programme; and

·                Updates in relation to Community Asset Transfers and Voluntary Sector Support and the Council’s Heritage Estate.

 

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

 

·                Had the process of Community Asset Transfers (CAT’s) slowed down and if so what was the reason for this;

·                It would be useful if all Members of the Council were provided with details of buildings across the city that were still available for CAT’s;

·                Why was it envisaged that there would possibly be a need to progress sales of Council assets quickly if demand from investors and occupiers particularly in the residential, office and leisure sectors within the city centre remained strong;

·                Clarity was sought as to what was determined to be “affordable” in the context of housing development within the city;

·                It would be helpful in future reports to have a breakdown of the different types of housing provision being provided across the city;

·                In relation to the proposed housing renewal scheme in Beswick, what was meant by the reprovision of all existing social housing tenants;

·                Given the Council’s exposure to the retail sector, with specific reference to Kendals and the Arndale Centre, was there any concern in relation to  the retail performance of the city;

·                What was the timescale for actual movement on the proposals for the redevelopment of Wythenshawe Town Centre;

·                Why had the Council paid £37million to acquire Central Retail Park site but was selling a site in close proximity (Pollard Street) to this for significantly less;

·                There was concern that there appeared  ...  view the full minutes text for item 62.

63.

Annual Section 106 Monitoring Report pdf icon PDF 256 KB

Report of the Strategic Director (Growth and Development)

 

This report provides an update on the Council’s Section 106 (s106) activity for the municipal year (2018/19).  Together with the appendices it provides an update on the management and administration of planning obligations and sets out the progress on unspent funds.

Additional documents:

Minutes:

The Committee considered a report of the Strategic Director (Growth and Development), which provided information on the 2018/19 municipal year’s activity in relation to S106 Agreements and specifically on associated financial obligations. The report also set out the legislative framework for negotiating S106 agreements, and updates on the Community Infrastructure Levy (CIL) and viability assessments.

 

The Executive Member for Environment, Planning and Transport provided a brief summary of the report.  The main points and themes included:-

 

·                During 2018/19 year, 16 S106 agreements were signed.  Of these, seven related to the provision of affordable housing;

·                A total of £966,865 had been received in S106 financial contributions and to date income collected in the current fiscal year was £907,878;

·                There was currently £6.5 million held through received S106 contributions. Of this around £500,000 was awaiting to be reserved to projects;

·                No refunds had been made during this period in relation to any financial obligation, however, there was one case where the financial obligation was now required and this was being pursued;

·                Viability assessments were now submitted as part of the planning application and were publically available for inspection;

·                The ability of Member engagement in the context of planning agreements;

·                S106 governance arrangements, which included the establishment of a dedicated S106 Advisory Group to review spend, track process and help unblock any issues; and

·                The Council continued to not implement CIL in Manchester at the current time.  As part of the review of the Core Strategy (the development plan), consideration would be given to the introduction of CIL which would include assessing, if it is possible to establish an economically viable CIL rate and/or whether these could differ in different geographical areas.

 

The report also contained a breakdown of S106 agreements on a ward by ward basis.

 

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

 

·                Would it be possible for all Councillors to have access to the new viewing portal for S106 agreements;

·                What was the exact process for Member engagement in the context of S106 agreements secured through the planning process;

·                It was felt that on some occasions, Ward Councillors were not being made aware of potential S106 monies within their wards and clarification was sought on the co-ordination between the Planning Department and Neighbourhood Teams;

·                It was suggested that some Members felt that S106 agreements had been determined by the time pre-application discussions were taking place and that due to this, they had little influence;

·                It was queried as to how local residents could contribute ideas to S106 spend;

·                Could the amount of S106 contribution increase if a development became more profitable than anticipated;

·                Was there any timescale around a future decision on the possible implementation of a CIL;

·                There was concern about assumptions being made between the S106 agreement and the source of spend as well as the length of time it was taking between a S106 agreement being made and the its implementation;

·                It was suggested that it was not clear to Members who was  ...  view the full minutes text for item 63.

64.

The Factory, St John's pdf icon PDF 259 KB

Report of the Strategic Director (Growth and Development)

 

The purpose of this report is to update Members on the construction progress for The Factory project, its significance in terms of cultural impact within the neighbourhood; the evaluation of Manchester International Festival 2019; and the projected social value outcomes identified to be delivered collaboratively through the design team, contractors and the operator.

Additional documents:

Minutes:

The Committee considered a report of the Strategic Director (Growth and Development), which provided an update on the construction progress for The

Factory project, its significance in terms of cultural impact within the city, the projected social and economic benefits, legacy impacts and opportunities for Manchester residents generated by the project.

 

The main points and themes within the report included:-

 

·                To date progress had been good, with 11 of the 32 work packages having been let, the most visible of which were the steelworks;

·                A number of key successes were highlighted including the substantial completion of the towers steelwork, the installation of the concrete stairs and the lift shaft erection. The truck lift enclosure and orchestra pit had also been 'topped out' and structurally completed;

·                The project team were working to achieve the earliest, most cost effective completion date, with the Factory due to play a significant role in MIF 2021, however the most significant challenge remained the complexity of the project;

·                Additional issues had been discovered on site including drainage issues due to incomplete data which had put some pressure on the project;

·                The project was currently going through the next quarterly review with Arts Council England. A cost and design review had also been commissioned to underpin the next phase of delivery with the Mechanical, Electrical and Plumbing (MEP) being the next major work package to be let;

·                Details of social value commitments to date, including the number of apprenticeship starts, pre-employment schemes or placements focusing on long term unemployed groups and employability skills support activities;

·                A broader piece of work was also being undertaken into the construction market and inflationary pressures within Manchester as this was a concern across the capital programme;  and

·                Whilst as this stage the project was reported as delivering to budget, the situation was being kept under careful review.

 

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

 

·                Concern was raised in relation to the engagement by the Management Contractor in permitting access to the site for Unite and Trade Unions, in light of the Council’s signing of the Unite Construction Charter;

·                Members sought further detail in relation to the additional drainage issue identified in the report;

·                What financial contingency existed within the total cost of the project to take account of these additional issues and inflationary pressures surrounding the construction market;

·                In terms of apprentices, could the Committee be provided with information on how many had actually started working on the project and how many of these were Manchester residents; and

·                Could Officers give an assurance that there would be no need for any further capital investment into the project

 

The Director of Capital Programmes advised that he met regularly with Unite, officers within Procurement and the Management Contractor’s Project Director, to discuss protocols around site access for Trade Unions.  It was reported that it had been agreed that the protocols for Trade Union access to the site would replicate those protocols applied to the construction of Liverpool Hospital  ...  view the full minutes text for item 64.

65.

Progress of Expenditure - Northern and Eastern Gateway Programmes pdf icon PDF 257 KB

Report of the Strategic Director (Growth and Development)   

 

This report provides a progress update in relation to investment being made by the City Council in delivering the Northern and Eastern Gateway programmes, which in total are anticipated to deliver in excess of 21,000 new homes over a 15 – 20 year period and 2,200 jobs created or safeguarded.

Additional documents:

Minutes:

The Committee considered a report of the Strategic Director (Growth and Development), which provided a progress update in relation to investment being made by the Council in delivering the Northern and Eastern Gateway programmes, which in total were anticipated to deliver in excess of 21,000 new homes over a 15 – 20 year period and create or safeguard 2,200 jobs.

 

The main points and themes within the report included:-

 

·                Budgetary allocations of £25m (Northern Gateway) and £47m (Eastern Gateway) had been made available from the Capital Programme 2017 – 2022 to help unlock and maximise the potential of these areas;

·                The scale of the Northern Gateway opportunity and associated challenges;

·                Details of the investment to support both the Northern Gateway and Eastern Gateway initiatives, including co-investment with joint venture partners;

·                Progress to date in terms of expenditure, including the acquisition of Central Retail Park and The Courtyard at Royal Mills; and

·                Detail of remedial works undertaken around New Islington Marina.

 

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

 

·                What would be the consequence to the Council should the bid for £51.6m from the Government’s Housing Infrastructure Fund, to tackle constraints to development in the Lower Irk Valley neighbourhood, be unsuccessful;

·                Clarification was sought as to whether the bid for £51.6m from the  Housing Infrastructure Fund was by Manchester City Council or whether this was a bid on behalf the Combined Authority;

·                Was there still a proposal for a new tram stop within the Northern gateway programme; and

·                If the bid to the Government’s Housing Infrastructure Fund was unsuccessful, would this impact on the ability to deliver the target of 20% affordable housing (equating to 3000 properties) within the Northern Gateway programme.

 

The Committee was advised that the Council was remaining optimistic in terms of the outcome of the bid submitted.  The Council had been in detailed negotiations with Homes England for a significant period of time and had been through a detailed process of due diligence in relation to the bid.  However, should the bid be unsuccessful in part or whole, the Council had identified a range of scenarios as to how the Council would intend to progress with both programmes.  The Leader added that in the event of the bid being unsuccessful the likely impact would be that the development programme would be lengthened in terms of completion rather than scaled back or abandoned.

 

The Leader advised that the £51.6m bid was originally a joint between Manchester Council and Salford Council, supported by the Combined Authority, but having taken advice from Government, the Council had separated its bid from Salford’s bid, as it was suggested that this would result in a higher chance of both bids being successful.

 

Officers explained that the Transport Strategy for 2040 still proposed a new tram stop within the Northern Gateway programme and the Council was in discussions with TfGM around a pre-feasibility study.

 

The Leader explained that within the Strategic Framework for the Irk Valley and Collyhurst area of  ...  view the full minutes text for item 65.

66.

Capital Requirements and Anticipated Borrowing pdf icon PDF 168 KB

Report of the Deputy Chief Executive and City Treasurer

 

This report informs Members of the Council’s capital financing position, forecast borrowing, and the impact on the Council’s balance sheet and revenue budget. The report also reviews the changes to PWLB borrowing rates announced in October.

 

Additional documents:

Minutes:

The Committee considered a report of the Deputy Chief Executive and City Treasurer, which informed Members of the Council’s capital financing position, forecast borrowing, and the impact on the Council’s balance sheet and revenue budget. The report also reviewed the changes to Public Works Loan Board (PWLB) borrowing rates announced in October 2019.

 

The main points and themes within the report included:-

 

·                The context of the Council’s approach to managing its debt, which had been to minimise cash balances by delaying taking external debt;

·                Changes in internal borrowing to create revenue savings compared to the cost of externalising the debt and holding cash;

·                Interest rate expectations over the next three years;

·                An overview of the Council’s borrowing strategy, which was based on aggregating the debt needs of the Council to achieve the optimum risk balance in debt management;

·                The forecast borrowing requirements  from 2019/20 to 2023/24;

·                Revenue implications of new debt for the medium term; and

·                The impact and potential future implications to the Council in relation to the PWLB rate policy change.

 

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

 

·                Rather than increase the PWLB rate, could Government not have tightened the rules up in regards to public sector borrowing;

·                As the PWLB rate had historically been low, had the Council and other local authorities simply become accustomed to borrowing at a low rate of interest;

·                How was the Council lobbying Government to review the change in the PWLB rate;

·                Which regeneration schemes, where a return on investment was expected, were likely to be affected by the change in the PWLB policy;

·                What was the Council’s borrowing cost in terms of the potential impact on the revenue budget;

·                Had any potential equalities impact been taken in to consideration in connection to borrowing costs and the increased impact on the Council’s revenue budget, which was largely spent on groups with a protected characteristic; and

·                What were the benefits and potential drawbacks for potentially borrowing from the private sector in the future.

 

The Leader advised that the 1% increase of the PWLB borrowing rate was unlikely to stop local authorities investing in certain ventures, but more likely it would have an impact on more marginal schemes such as affordable housing taking place and  as such he felt this was a counterproductive measure.

 

The Deputy City Treasurer advised that the Council had become used to borrowing money at a low rate of interest, however, she provided an assurance that when the Council set its capital programme, it was set against the slightly higher PWLB rate towards the end of 2018, to ensure that the existing capital programme was predominantly budgeted for at that time, meaning that the programme remained affordable.  The consequence of the increase in the PWLB rate was the impact on the viability of any future schemes.

 

The Committee was also advised that in terms of lobby government, the City Treasure had contacted a number influential organisations, including a number of other Local Authorities and the  ...  view the full minutes text for item 66.

67.

Overview Report pdf icon PDF 589 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, responses to previous recommendations.  Members were also invited to agree the Committee’s future work programme.

 

Decision

 

The Committee notes the report.