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 the 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 Strategic Development Business Plan for 2019/20, which set out in broad terms the directorate’s key priorities, key activities and revenue and capital strategy for 2019/20, which was a refresh of the directorate’s Business Plan for 2018/20 in the context of current resources, challenges and opportunities.

Taken together, the report and the directorate Business Plan illustrated how the directorate 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:-

·                Why was there lower than expected Council Tax growth;

·                What assumptions had been made that underpinned the anticipated income from Business Rates;

·                What assumptions had been made on the anticipated increase in customer and client receipts in relation to planning applications;

·                What was the time scale for implementing the proposed increases in relation to planning fee income

·                Who would be reviewing all planning fee income as referred to in the report; and

·                What was considered to be a comparatively low number of agency staff as referred to in the report.

The Deputy City Treasure advised that Council Tax growth was originally projected at 3.5% based on the number of properties that were intended for development over the course of this financial year.  At present, the growth was at 2.23% and this was mainly due to the timing of when properties were coming on stream.   She also explained that some of the assumptions that had been made in relation to the expected income from Business Rates were based around the growth of businesses  within the city, some inflationary changes and assumptions regarding the impact of the 100% retention pilot which ensured that the Council was no worse off than under the 50% retention scheme.  It was explained that due to the volatility of Business Rates related to the number of appeals, projecting the actual revenue income was difficult. 

The Strategic Director (Development) advised that in relation to the increase in planning fees, it had been agreed with HM Treasury that all income would be ring fenced to the service.   As this was the first year of this additional income a prudent view was needed going forward in respect of a possible Brexit ‘No Deal’ and the negative effect that this could have on commercial and residential growth and the associated impact to the Council’s income.  He reported that the Council had established some years ago a level of reserves to provide a short term solution should planning fee income reduce, but a longer term view would be required. 

The Strategic Director (Development) advised that as the Council’s Planning service had only to his responsibility in the summer, work was currently being undertaken in relation to reviewing the whole of the service which would be reported to the Executive as part of the budget proposals in February 2019.  He also commented that the use of agency staff within the directorate was very low, and used to back fill posts particularly in development and surveying.  Efforts were being made to fill these posts with permanent staff in order to reduce the use of agency staff.

The Committee:-

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

(2)       notes that the Business Plan will be developed further taking the Committee’s comments into account, and a revised plan will be submitted to the Committee’s meeting in February 2019.