The report of the City Treasurer is enclosed.

A report concerning requests to increase the capital programme was submitted. We agreed to recommend three changes to the Council which would increase the capital budget by £1.085m, financed by the use of reserves and by borrowing.

The report also addressed previous decisions on Settled Accommodation for Homeless Families. In March 2018 it was agreed to provide £5m of equity funding to a group of Registered Providers (RPs) to support the purchase of around 60 homes for homeless families (Minute Exe/18/045). Initially based on the Council securing a first charge on the homes, in July 2018 it was agreed that the Council would hold a second charge on the properties in the circumstance where the RP applied a charge on the property to secure funding (Minute Exe/18/079(Decision 3)).

It was reported that since July further negotiations had taken place to finalise the terms of the agreement to be entered into between the Council and the RPs. In those negotiations it had become evident that the requirement for a second charge would restricting the available equity in a property and so restrict the RPs’ ability to raise finance. That would in turn result in fewer properties being acquired for the project. It was therefore proposed that he Council agree to forego the requirement of a second legal charge.

Instead it was now proposed that the parties enter into an agreement obliging them to attend regular meetings. If it became clear that an RP may be in financial difficulty the relevant RP would be required to offer its property or properties to the other RP’s in the consortium. If that offer was declined, the RP would next offer the properties to the Council.  In either case the value for the transfer would be 65% of the market value. If the Council also declined the offer, the RP would then sell the properties on the open market and the Council would recover its 35% share from the proceeds of that sale.

Where a property had been charged to an RP Lender, any transfer could only take place where the Lender agreed to release its charge on the property and the Lender may require the full 100% of the sale proceeds in order to release its charge. It was considered to be unlikely that Lenders would accept less than 100%, or agree to release the charge where the RP was in financial difficulty. Where that was the case it would put the Council’s 35% investment in respect of the relevant RP at risk. That risk was, however, considered to be low.

These proposals were agreed and the decisions made at previous meetings revised accordingly.

Decisions

1.         To recommend that the Council approve the following changes to Manchester City Council’s capital programme:

(a) Highways – Residents Parking Schemes. A capital budget increase of £0.553m is requested, funded by £0.396m of applicable Section 106 funding and £0.157m from the Parking Reserve.

(b) Highways – Automatic Bollards. A capital budget increase of £0.468m is requested, funded from the Parking Reserve, to replace the existing £0.200m borrowing approval.

(c) Highways – Hostile Vehicle Mitigation Measures. A capital budget increase of £0.264m is requested, funded from the Parking Reserve.

2.         In relation to the acquisition of settled accommodation for homeless families, to note the changes as set out in section 4 of the report, to approve the revised proposal and, in a variation to decision (3) recorded in minute Exe/18/045, to now delegate authority to the City Treasurer in consultation with the Executive Member for Finance and Human Resources to agree and sign off the investment model on behalf of the City Council.