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.

The Committee considered a report of the Chief Executive and 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 Corporate Core Business Plan and Strategic Development Business Plan for 2019/20, which set out in broad terms the directorates’ key priorities, key activities and revenue and capital strategy for 2019/20, which was a refresh of the directorates’ Business Plans for 2018/20 in the context of current resources, challenges and opportunities.

Taken together, the report and the directorates’ Business Plans illustrated how the directorates 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:-

·                Based on the additional borrowing the Council was intending to take out, what impact was this expected to have on the future capital revenue finance position;

·                Had the confirmation of the New Home Bonus been delayed in light of the delayed announcement of the financial settlement by Government;

·                Clarification was sought as to why the pooled budget for Health and Social Care was to be finalised by MHCC after the Council had set its budget.

The City Treasurer advised that the capital financing budget had been set to take account the Council’s likely future borrowing requirements and as such its  position would be remain constant for the next few years.  She also reported that the Funding Strategy had the support of the CCG Governing Body and this now presented a significantly reduced risk to the Council

In relation to the Corporate Core Business Plan, some of the key points that arose from the Committees discussions were:-

·                How was Directorate intending on influencing outside of the Council the need reduce greenhouse gas emissions, improve air quality and improve public transport and highways making them more sustainable in light of the severe congestion issues within the city centre;

·                Was it felt that it was still possible to reduce demand through reforming services as it didn’t appear to have done so far and when Government were continuing to reduce available resources to all public services;

·                Had there been any benchmarking exercise with similar authorities in relation to the number of ombudsman complaints upheld;

·                Had any impact assessment been undertaken on the Business Rates retention trial monitored to understand its impact on resources;

·                There was a need for the Council to recognise the need to invest in its staff in order to achieve the deliverability of doing more for less;

·                Clarification was sought as to whether the Council had previously decided to reduce the spend associated with the Essential Car User allowance, whether Social Workers had been excluded from this proposal, and if so, how was the savings target of £450,000 be achieved given that Social Workers would make up the majority of staff  currently designated as Essential Car Users;

·                How was the Corporate Core transformation savings target of £500,000 intended to be achieved;

·                A Member expressed their uncertainty as to whether the current scrutiny structure was appropriate for scrutinising in detail the financial savings of directorate business plans;

·                There was a need to remember what staff the Council needed to retain in order to the keep the Council running; and

·                There was need to ensure that the Council did not squander any potential training budgets, with specific reference to the Apprenticeship Levy

The Deputy Chief Executive advised that the challenges of congestion within the city centre existed as a consequence of the current suite of works being undertaken to improve the flow of traffic around and across the city centre.  More broadly, the Council was working with the GMCA to get people to change the mode of transport that hey used and a such there was to be more investment in the infrastructure for alternative transport.  It was also reported that the Neighbourhood and Environment Scrutiny Committee would  be scrutinising the plan for Greater Manchester to tackle Air Quality.

The Deputy Chief Executive acknowledged that reducing demand through reforming services was difficult, but there had been successful examples of this, particularly around health integration and new models of care.  She advised that Directorates were now working closer than ever before to be more effective with the resources available to the Council to tackle the challenges.

The Executive Member for Finance and Human Resources recognised the challenge that the Council faced in the need to reduce demand through reform and that in some instances, demand for services had risen.  He added that if the Council did not continue to reform its services , it would not be possible to continue providing certain services.

The City Treasurer reassured the Committee that in terms of Business Rates, all changes in government policy had been fully reimbursed through Section 31 grants.  The Council monitored its Business Rates income carefully and held a provision and a reserve for risks associated to the level of appeals being received and any associated volatility.  The Deputy Chief Executive confirmed that the Council did benchmark Ombudsman complaints with other core cities and would share this information with Committee Members.

The Committee was advised that a detailed analysis was being undertaken around the essential car user allowance which would be concluded by the end of 2018.  Recommendations arising from this analysis would be considered following the conclusion of this analysis.  In terms of the Corporate Core transformation programme, the directorate was looking at further collaboration of services and reducing the duplication of work in order to achieve its savings target.

The Chair suggested that if Members had concerns as to whether the current scrutiny structure was appropriate for scrutinising in detail the financial savings of directorate business plans, then Members of this Committee may wish to attend other Scrutiny Committees in order to provide a financial focus to the scrutiny of their respective business plans.  The City Treasurer also advised that all Committees had visibility of the business plans and milestones to deliver savings in order to monitor progress effectively.

In relation to the Strategic Development Business Plan, some of the key points that arose from the Committees discussions were:-

·                Would the challenges in association with the Investment Estate and Operational Estate have any detrimental impact on the voluntary and third sector organisations that delivered social value by their use of Council owned buildings;

·                Objection was taken to the categorisation of older people as some of the most vulnerable residents in the city and it was requested that that reference to older people was removed and instead an additional  reference should made to ensuring the Council had an age friendly housing strategy for older people;

·                Had any consideration been given to using vacant council land for car parking whilst the land was waiting to be developed in order to generate income;

·                Was it possible to use some of the reserve set aside should planning fee income reduce be used, be used to ensure the Council’s planning compliance function was strengthened;

·                Was it possible to increase the advertising revenue; and

·                Could a reassurance be given that the Council was not supportive of any advertising that celebrated inappropriate conduct.

The Strategic Director (Development) advised that over the last 12 months, the Council had reviewed its Investment Estate to ensure that it had within this portfolio, assets that genuinely generated long term income for the Council.  As part of this process it had revealed assets that had been wrongly categorised, which had resulted in certain assets being moved from this estate to the Operational Estate with the view that they had the potential to provide opportunities for community groups.  He also reported that the Council explored every opportunity to maximise its revenue income, but these opportunities needed to be balanced with other considerations, including the views of Ward Councillors.

The Strategic Director (Development) commented that the 20% fee increase in planning applications, it had been agreed that his increase would be ring-fenced to the planning service.  The Council was in the process of reviewing its planning service and as part of this review, the issue of planning compliance would be looked at with a view to strengthening.

The Strategic Director (Development) explained that the Council did not own all of the City’s advertising estate and was not able to control what was or was not advertised on hoardings that were located on private land.  The advertising estate within the Council’s control was in a review process, particularly the small format.  A decision had been made to bring the advertising estate within Strategic Development to manage collectively and was a significant income into the Investment Estate portfolio.  The small format advertising estate was currently managed by JC Decaux and the contract was up for renewal in September 2019.  It was anticipated that significantly more income would be generated from the adverting estate from April 2020 onwards.  He agreed to look at what degree of influence the Council could have on the appropriateness of adverts as part of the tendering process .

The Committee:-

(1)       welcomes the reports and notes that this is the third year of a three year budget; and

(2)       notes that the Business Plans will be developed further taking the Committee’s comments into account, and revised plans will be submitted to the Committee’s meeting in February 2019;

(3)       notes that reference to older people being amongst the most vulnerable residents will be removed from the vision for housing solutions and instead an additional reference will be added to ensure the Council had an age friendly housing strategy for older people; and

(4)       requests that a report is submitted to a future meeting on how the Council can influence advertisers, as part of the tender process, on the appropriateness adverts when advertising on Council owned land.