Agenda item

Agenda item

Appendices

To approve the part proceedings of the Executive on 13 February 2019 which contain details of the following:

 

·                The Councils Budget 2019/20 covering report;

·                Medium Term Financial Plan 2019/20 - 2021/22;

·                Capital Strategy and Budget 2019/20 to 2023/24;

·                Corporate Core Business Plan 2019/20;

·                Neighbourhoods Directorate Business Planning 2019/20;

·                Children's Services and Education Business Planning 2019/20;

·                Dedicated Schools Grant 2019/20;

·                Strategic Development Business Planning 2019/20;

·                Housing Revenue Account 2019/20 to 2021/22;

·                Manchester Health and Care Commissioning - Adult Social Care Business Plan and Pooled Budget contribution 2019/20;

·                Homelessness Business Planning 2019/20; and

·                Treasury Management Strategy Statement and Borrowing Limits and Annual Investment Strategy 2019/20

Minutes:

Appendix 1

 

Housing Revenue Account Budget 2018/19 – 2021/22

 

 

2018/19 (Forecast)

2019/20

2020/21

2021/22

See Para.

 

£000

£000

£000

£000

 

Income

 

 

 

 

 

Housing Rents

(60,279)

(59,914)

(61,239)

(62,462)

5.6

Heating Income

(709)

(734)

(749)

(764)

5.15

PFI Credit

(23,600)

(23,586)

(23,374)

(23,374)

5.12

Other Income

(1,093)

(1,166)

(1,157)

(1,047)

5.11

Funding from General HRA Reserve

2,764

(10,352)

(21,510)

(8,164)

7.1

Total Income

(82,917)

(95,752)

(108,029)

(95,811)

 

 

 

 

 

 

Expenditure

 

 

 

 

Northwards R&M & Management Fee

20,583

20,417

20,699

20,943

5.27

PFI Contractor Payments

35,322

33,418

36,227

31,356

5.12

Communal Heating

766

838

855

872

5.15

Supervision and Management

5,270

5,118

5,172

5,243

5.29

Contribution to Bad Debts

1,206

604

925

1,258

5.25

Depreciation

15,184

17,279

17,460

17,611

5.20

Other Expenditure

1,317

1,525

1,347

1,282

5.29

RCCO

0

13,749

22,565

14,483

5.29

Interest Payable and similar charges

3,269

2,804

2,779

2,763

5.21

Total Expenditure

82,917

95,752

108,029

95,811

 

 

 

 

 

 

 

 

 

 

 

 

Total Reserves:

 

 

 

 

Opening Balance

(99,939)

(102,703)

(92,351)

(70,841)

7.1

Funding (from)/to Revenue

(2,764)

10,352

21,510

8,164

 

Closing Balance

(102,703)

(92,351)

(70,841)

(62,677)

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Appendix 2 – the proposed Capital Programme Budget

 

Project Name

2018/19 Proposed Budget

2019/20 Proposed Budget

2020/21 Proposed Budget

2021/22 Proposed Budget

2022/23 Proposed Budget

2023/24 Proposed Budget

 

£'000’s

Highway Programme

 

 

 

 

 

 

Highways Planned Maintenance Programme

 

 

 

 

 

 

Planned Highways Maintenance Programme

221

432

75

0

0

0

Drainage

344

970

1,312

0

0

0

Large Patching repairs

2,000

1,088

1,281

1,313

0

0

Carriageway Resurfacing

5,400

5,287

7,190

7,535

0

0

Footway schemes

1,498

2,200

2,893

2,957

0

0

Carriageway Preventative

4,500

4,139

8,282

9,044

0

0

Bridge Maintenance

0

1,200

2,982

3,018

0

0

Other Improvement works

86

1,983

4,769

4,833

0

0

Project Delivery Procurement

0

757

1,681

1,703

0

0

Highways Stand Alone Projects Programme

 

 

 

 

 

 

Ardwick Grove Village Parking

0

0

20

0

0

0

Didsbury Village Tram Stop Traffic Mitigation

0

0

18

0

0

0

Section 106 Highways work around Metrolink

0

0

47

0

0

0

Barlow Moor Road

0

27

0

0

0

0

Etihad Expansion - Public Realm

0

59

0

0

0

0

Velocity

155

567

0

0

0

0

Cycle City Phase 2

230

4,291

0

0

0

0

Safe Routes to Loreto High School

28

22

0

0

0

0

Safe Routes to Schools

22

58

0

0

0

0

Congestion Target Performance

20

215

0

0

0

0

Piccadilly Undercroft Gating

1

7

0

0

0

0

20mph Zones (Phase 3)

20

80

370

0

0

0

ITB Minor Works

10

93

0

0

0

0

Flood Risk Management - Hidden Watercourses

0

49

0

0

0

0

Flood Risk Management - Higher Blackley Flood Risk

0

41

0

0

0

0

Hyde Road (A57) Pinch Point Widening

106

1,766

2,123

0

0

0

Manchester/Salford Inner Relief Road (MSIRR)

6,032

5,553

100

0

0

0

Great Ancoats Improvement Scheme

453

3,065

5,015

0

0

0

Mancunian Way and Princess Parkway NPIF

438

4,479

3,197

0

0

0

Cycle Parking

19

10

0

0

0

0

Shadowmoss Rd / Mossnook Rd

10

16

0

0

0

0

Birley Fields Campus improvements

0

0

34

0

0

0

GMCRP Multi Sites

13

0

0

0

0

0

Princess Rd Safety Review

100

477

0

0

0

0

School Crossings

286

1,403

924

0

0

0

Kingsway Speed Cameras

13

11

0

0

0

0

Green Bridge at Airport City

425

1,341

1,216

0

0

0

Public Realm

833

1,426

400

400

0

0

Street Lighting PFI

11,050

12,000

1,731

0

0

0

Didsbury West S106

53

10

0

0

0

0

S106 Whalley Grove

50

25

0

0

0

0

A56 Liverpool Road

10

70

0

0

0

0

A56 Chester Road

16

35

0

0

0

0

M56

0

148

0

0

0

0

Pay and Display Machines

0

924

0

0

0

0

North Manchester Hospital Residents Parking

0

9

0

0

0

0

Parking Schemes

0

558

120

0

0

0

Sunbank Lane S278

21

30

0

0

0

0

Sharston Roundabout SCOOT

34

6

0

0

0

0

SEMMMS PROGRAMME

 

 

 

 

 

 

Ringway Road Highway Imp Scheme

0

0

0

0

0

0

Local Roads (temp SEMMMS A6 Stockport)

2,962

0

0

0

0

0

SEMMMs A6 to Manchester Airport

78

0

0

0

0

0

Bus Priority Package Programme

 

 

 

 

 

 

Bus Priority Package - Oxford Road

215

137

0

0

0

0

Bus Priority Package - Princess Street/Brook Street

50

103

0

0

0

0

 

 

 

 

 

 

 

Total Highways Programme

37,802

57,167

45,780

30,803

0

0

 

 

 

 

 

 

 

Environment Programme

 

 

 

 

 

 

Waste Reduction Measures

320

1,471

0

0

0

0

Waste Contract

523

5,910

0

0

0

0

Blackley Crematorium Heat Exchanger

107

0

0

0

0

0

Christmas Market Electrical Equipment

137

0

0

0

0

0

Smart Litter Bins

258

0

0

0

0

0

Leisure Services Programme

 

 

 

 

 

 

Parks Programme

 

 

 

 

 

 

Hollyhedge Park Drainage IMPS

9

0

0

0

0

0

Heaton Park Pay & Display

464

0

0

0

0

0

PIP - Park Events Infrastructure

274

52

0

0

0

0

PIP - Unallocated

97

2,566

4,045

5,699

5,699

2,462

Smedley Lane Playing Fields S106

19

0

0

0

0

0

Somme 100 Year Memorial

130

0

0

0

0

0

Painswick Park Improvement

30

0

0

0

0

0

Heaton Park Southern Play Area

360

120

0

0

0

0

Didsbury Park Play Area S106

50

0

0

0

0

0

Wythenshawe Park Sport Facilities S106

152

0

0

0

0

0

Northenden Riverside Park

50

25

0

0

0

0

Age Friendly Benches

18

0

0

0

0

0

King George V Park

93

0

0

0

0

0

Leisure & Sports Facilities

 

 

 

 

 

 

Arcadia (Levenshulme) Leisure Centre

10

0

0

0

0

0

National Taekwondo Centre

7

0

0

0

0

0

Indoor Leisure - Abraham Moss

675

1,709

9,076

3,107

0

0

Indoor Leisure - Moss Side

5,597

25

0

0

0

0

FA Hubs

0

13,000

0

0

0

0

Boggart Hole Clough - Visitors Centre

535

0

0

0

0

0

Mount Road S106

12

0

0

0

0

0

Event Seating Basketball

18

0

0

0

0

0

Velodrome Track

713

0

0

0

0

0

Contact Theatre loan

200

0

0

0

0

0

MAC - Booth St Car Park

148

0

0

0

0

0

Libraries and Info Services Programme

 

 

 

 

 

 

Relocation of Manchester Visitor Info Centre (MVIC)

5

54

0

0

0

0

GM Archives Web Portal

10

118

0

0

0

0

Central Library Wolfson Award

37

0

0

0

0

0

Library Refresh

4

0

0

0

0

0

Roll Out of Central Library ICT

220

0

0

0

0

0

Refresh of Radio Frequency Identifier Equipment

12

0

0

0

0

0

Newton Heath Library

168

0

0

0

0

0

Withington Library Refurbishment

200

0

0

0

0

0

Open Libraries

42

450

0

0

0

0

 

 

 

 

 

 

 

Total Neighbourhoods Programme

11,704

25,500

13,121

8,806

5,699

2,462

 

 

 

 

 

 

 

Cultural Programme

 

 

 

 

 

 

First Street Cultural Facility

12

0

0

0

0

0

The Factory (Build)

24,365

55,253

38,078

4,725

0

0

The Factory (Public Realm)

2,344

0

2,106

0

0

0

Corporate Estates Programme

 

 

 

 

 

 

Asset Management Programme

9,026

11,840

9,551

7,385

0

0

Strategic Acquisitions Programme

8,731

4,331

3,000

3,000

0

0

Town Hall Complex Transformation Programme

67

0

0

0

0

0

Hammerstone Road Depot

932

7,083

6,940

7

0

0

Heron House

14,380

0

0

0

0

0

Registrars

1,400

0

0

0

0

0

Carbon Reduction Programme

100

8,500

1,290

0

0

0

Civic Quarter Heat Network

6,500

11,500

4,000

4,000

0

0

Lincoln Square

0

0

1,200

0

0

0

Brazennose House

678

0

0

0

0

0

Estates Transformation

0

215

0

585

0

0

Estates Transformation - Hulme District Office

4,680

234

0

0

0

0

Estates Transformation - Alexandra House

559

6,961

3,848

632

0

0

The Gallery Café

0

0

0

0

0

0

Ross Place Refurbishment

2,120

0

0

0

0

0

Development Programme

 

 

 

 

 

 

Development Programme - East Manchester

 

 

 

 

 

 

The Space Project - Phase 2

1,085

0

0

0

0

0

The Sharp Project

0

600

0

0

0

0

Digital Asset Base - One Central Park

9,443

620

0

0

0

0

Sustaining Key Initiatives

0

0

5,000

8,600

0

0

New Smithfield Market

32

468

0

0

0

0

Beswick Community Hub - Highway and Public Realm

2

0

0

0

0

0

Eastern Gateway - Central Retail Park

1,312

2,000

0

0

0

0

Eastern Gateway - New Islington Marina

1,800

3,332

0

0

0

0

Hall and Rogers

346

0

0

0

0

0

Development Programme - North Manchester

 

 

 

 

 

 

Collyhurst Police Station liabilities

844

0

0

0

0

0

Northern Gateway

3,875

2,300

6,675

7,275

4,875

0

Development Programme - City Centre

 

 

 

 

 

 

Hulme Hall Rd Lighting

39

0

0

0

0

0

ST Peters Square

602

400

0

0

0

0

Medieval Quarter Public Realm

488

1,500

0

0

0

0

City Labs 2

3,675

0

0

0

0

0

Manchester College

17,600

10,000

0

0

0

0

Development Programme - Enterprise Zone

 

 

 

 

 

 

Airport City Power Infrastructure (EZ)

2,440

0

0

0

0

0

Development Programme - Stand Alone Projects

 

 

 

 

 

 

Digital Business Incubators

3,500

0

0

0

0

0

 

 

 

 

 

 

 

Total Strategic Development Programme

122,977

127,137

81,688

36,209

4,875

0

 

 

 

 

 

 

 

Town Hall Refurbishment Programme

 

 

 

 

 

 

Our Town Hall refurbishment

11,060

24,386

67,743

103,251

65,914

29,039

 

 

 

 

 

 

 

Total Town Hall Refurbishment Programme

11,060

24,386

67,743

103,251

65,914

29,039

 

 

 

 

 

 

 

Private Sector Housing Programme

 

 

 

 

 

 

Brunswick PFI (PSH)

 

 

 

 

 

 

Brunswick PFI Land Assembly

2,460

1,726

737

0

0

0

Collyhurst (PSH)

 

 

 

 

 

 

Collyhurst Regeneration

10

173

3,700

0

0

0

Collyhurst Environmentals

65

62

0

0

0

0

Collyhurst Acquisition & Demolition (Overbrook & Needwood Close)

0

0

505

565

0

0

Collyhurst Land Assembly Ph1

20

63

0

0

0

0

Collyhurst Land Acquisitions Ph2

0

210

799

0

0

0

Eccleshall Street - 3 Sites

0

500

 

0

0

0

Housing Investment Model

 

0

 

 

 

 

Site Investigation and Early Works HIF Pilot Sites

286

141

155

0

0

0

Miles Platting PFI (PSH)

 

 

 

 

 

 

Miles Platting PFI Land Assembly

255

632

0

0

0

0

Private Housing Asist Citywide Programme

 

 

 

 

 

 

Disabled Facilities Grant

8,062

7,929

6,200

6,200

0

0

Toxteth St CPO & environmental works

73

141

0

0

0

0

Bell Crescent CPO

0

482

0

0

0

0

Private Sect Housing Standalone Projects

 

 

 

 

 

 

HCA Empty Homes Cluster Phase 2

90

801

891

0

0

0

Empty Homes Scheme (s22 properties)

0

2,000

0

0

0

0

Redrow Development Programme

 

 

 

 

 

 

Redrow Development Phase 2 onward

300

0

0

0

0

0

West Gorton (PSH)

 

 

 

 

 

 

West Gorton Compensation

0

4

0

0

0

0

West Gorton Ph 2A Demolition & Commercial Acquisitions

10

490

904

0

0

0

Armitage Nursery & Community Facility

1,215

2,160

0

0

0

0

Private Sector Housing - Stand Alone Projects

 

 

 

 

 

 

HMRF

56

50

40

0

0

0

Collyhurst Acquisition & Demolition (Overbrook & Needwood Close)

5

0

661

0

0

0

Extra Care

3,555

2,445

0

0

0

0

Moston Lane Acquisitions

0

0

0

0

0

7,500

Equity Loans

0

0

397

0

0

0

West Gorton Community Park

514

1,336

0

0

0

0

Ben St. Regeneration

5,574

556

6,877

0

0

0

Homelessness

5,000

0

0

0

0

0

Marginal Viability Fund - New Victoria

0

1,827

6,263

1,984

0

0

Marginal Viability Fund - Bowes Street

0

929

2,385

0

0

0

Rent to Purchase

203

0

0

0

0

0

 

 

 

 

 

 

 

Total Private Sector Housing Programme

27,753

24,657

30,514

8,749

0

7,500

 

 

 

 

 

 

 

Public Sector Housing

 

 

 

 

 

 

Northwards - External Work

 

 

 

 

 

 

Charlestown - Victoria Ave multistorey window replacement and ECW - Phase 1

0

8,000

7,190

0

0

0

External cyclical works phase 3a

10

0

22

0

0

0

Collyhurst Environmental programme

312

0

0

0

0

0

Ancoats Anita St and George Leigh external cyclical works ph 3b

28

0

0

0

0

0

Harpurhey Lathbury & 200 Estates external cyclical works ph 3b

-25

0

38

0

0

0

Environmental works

113

0

0

0

0

0

Harpurhey Shiredale Estate externals

0

0

15

0

0

0

Moston Miners Low Rise externals

16

0

4

0

0

0

Newton Heath Limeston Drive externals

0

0

6

0

0

0

Renewal of 4 automatic pedestrian gates at Victoria Square

0

45

0

0

0

0

External cyclical works ph 3b Harpurhey - Jolly Miller Estate ph 3b

54

0

32

0

0

0

External cyclical works ph 3b Moston Estates (Chauncy/Edith Cliff/Kenyon/Thorveton Sq)

7

0

2

0

0

0

External cyclical works ph 3b Ancoats Smithfields estate

262

10

0

0

0

0

External cyclical works ph 4b Charlestown Chain Bar low rise

178

0

36

0

0

0

External cyclical works ph 4b Charlestown Chain Bar Hillingdon Drive maisonettes

1

0

4

0

0

0

External cyclical works ph 4b Crumpsall Blackley Village

131

0

0

0

0

0

External cyclical works ph 4b Higher Blackley South

281

0

31

0

0

0

External cyclical works ph 4b Newton Heath Assheton estate

93

0

16

0

0

0

External cyclical works Ph 4b Newton Heath Troydale Estate

792

0

74

0

0

0

External cyclical works Ph 5 New Moston (excl corrolites)

66

0

31

0

0

0

Environmental improvements Moston corrolites

267

0

0

0

0

0

Charlestown - Victoria Ave multistorey replacement door entry systems

0

0

18

0

0

0

ENW distribution network phase 4 (various)

0

219

0

0

0

0

Dam Head - Walk up flates communal door renewal

212

172

0

0

0

0

Delivery Costs

955

909

827

0

0

0

Northwards - Internal Work

 

 

 

 

 

 

2/4 Blocks Heating replacement with Individual Boilers

24

0

122

0

0

0

Lift replacement / refurbishment programme

75

0

0

0

0

0

Fire precaution works - installation of fire seal box to electric cupboards on communal corridors in retirement blocks

6

0

0

0

0

0

Decent Homes mop ups ph 9 and decent homes work required to voids

212

0

0

0

0

0

One offs such as rewires, boilers, doors, insulation

377

0

0

0

0

0

Whitemoss Road and Cheetham Hill Road Local Offices - Improvements

202

0

0

0

0

0

Ancoats - Victoria Square lift replacement

0

265

0

0

0

0

Aldbourne Court/George Halstead Court/Duncan Edwards Court works

274

81

0

0

0

0

Boiler replacement programme

786

25

261

0

0

0

Kitchen and Bathrooms programme

0

1,788

94

0

0

0

Harpurhey - Monsall Multis Internal Works

0

2,385

85

0

0

0

Various - Bradford/Clifford Lamb/Kingsbridge/Sandyhill Court Internal Works

0

2,471

108

0

0

0

Collyhurst - Mossbrook/Roach/Vauxhall/Humphries Court Internal Works

0

2,791

106

0

0

0

Decent Homes mop ups phase 10 and voids

583

500

219

0

0

0

One off work - rewires, boilers, doors

100

200

0

0

0

0

Fire precautions multi storey blocks

0

1,078

1,000

0

0

0

Installations of sprinkler systems - multi storey blocks

0

2,380

221

0

0

0

Replacement of Prepayment Meters in High Rise Blocks

0

0

20

0

0

0

Delivery Costs

1,352

1,502

246

0

0

0

Northwards - Off Debits/Conversions

 

 

 

 

 

 

Bringing Studio Apartments back in use

40

0

0

0

0

0

Delivery Costs

13

0

0

0

0

0

Homeless Accommodation

 

 

 

 

 

 

Improvements to Homeless accommodation city wide

54

0

201

0

0

0

Plymouth Grove Women's Direct Access Centre

22

0

0

0

0

0

Improvements to Homeless Accommodation Phase 2

280

723

210

0

0

0

Delivery Costs

136

78

45

0

0

0

Northwards - Acquisitions

 

 

 

 

 

 

Northwards Acquisitions

134

0

0

0

0

0

Stock Acquisitions

32

0

0

0

0

0

Delivery Costs

29

0

0

0

0

0

Northwards - Adaptations

 

 

 

 

 

 

Adaptations

1,000

720

0

0

0

0

Northwards - Unallocated

 

 

 

 

 

 

Northwards Housing Programme unallocated

0

1,033

17,697

21,988

0

0

Retained Housing Programme

 

 

 

 

 

 

Collyhurst Maisonette Compensation & Dem

0

89

0

0

935

0

West Gorton Regeneration Programme

 

 

 

 

 

 

West Gorton PH2A Low & High Rise Demolition

10

16

0

0

0

0

Future Years Housing Programme

 

 

 

 

 

 

Collyhurst Estate Regeneration

0

700

8,695

10,235

1,841

0

Collyhurst Regen - Highways Phase 1

-97

0

190

97

1,394

0

Collyhurst Regen - Churnett Street

0

0

0

0

790

0

Collyhurst Regen - Needwood & Overbrook acquisition / demolition

3

0

124

0

0

0

Willert Street Park Improvements

36

0

0

0

0

0

North Manchester New Builds

6,358

163

0

0

0

0

North Manchester New Builds 2

75

500

10,700

0

0

0

North Manchester New Builds 3

250

0

0

0

0

0

Parkhill Land Assembly

0

0

0

4,270

0

0

Fire precautions multi storey blocks

0

1,200

0

0

0

0

 

 

 

 

 

 

 

 Brunswick PFI HRA

30

0

0

0

0

0

 

 

 

 

 

 

 

Total Public Sector Housing (HRA) Programme

16,149

30,043

48,690

36,590

4,960

0

 

 

 

 

 

 

 

Children's Services Programme

 

 

 

 

 

 

Basic Need Programme

 

 

 

 

 

 

Cheetham Academy

-14

0

0

0

0

0

Briscoe Lane Academy

127

0

0

0

0

0

Stanley Grove - contribution to PFI

13

0

0

0

0

0

Dean Trust Ardwick

15

0

0

0

0

0

Ardwick PRU

40

0

0

0

0

0

ULT William Hulme

47

0

0

0

0

0

Lytham Rd

0

200

0

0

0

0

Manchester Health Academy expansion

3,242

0

0

0

0

0

Co-op Academy expansion

3,741

0

0

0

0

0

St Margaret's C of E

54

0

0

0

0

0

St Matthews RC

20

0

0

0

0

0

Plymouth Grove Refurbishment

4,574

427

0

0

0

0

Beaver Rd Primary Expansion

4,547

115

0

0

0

0

Lily Lane Primary

3,331

136

0

0

0

0

St. James Primary Academy

2,848

112

0

0

0

0

Crossacres Primary School

1,902

111

0

0

0

0

Ringway Primary School

1,337

60

0

0

0

0

Webster Primary Schools

1,859

111

0

0

0

0

St. Chrysostom's

160

0

0

0

0

0

Camberwell Park Specialist School

65

0

0

0

0

0

Piper Hill Special School

224

0

0

0

0

0

SEND Programme

101

8,264

15,150

0

0

0

Basic need - unallocated funds

235

20,032

44,007

1,138

0

0

Universal Infant Free School Meals (UIFSM) - Unallocated

335

0

0

0

0

0

Schools Maintenance Programme

 

 

 

 

 

 

Abraham Moss - Hall Heating

-4

0

0

0

0

0

Chorlton CofE Primary Rewire

16

0

0

0

0

0

Moston Lane Primary

8

0

0

0

0

0

Wilbraham Primary Roof

59

0

0

0

0

0

Abbott Primary School Fencing

94

0

0

0

0

0

Crowcroft Park PS-Rewire

531

0

0

0

0

0

Pike Fold Community Primary - Ground Stabilisation - Survey artificial play area

17

0

0

0

0

0

Charlestown Primary Defects

31

0

0

0

0

0

All Saints PS

-1

0

0

0

0

0

Collyhurst Nursery School

2

0

0

0

0

0

Armitage CE Primary

135

0

0

0

0

0

Higher Openshaw Comm School - Renew Boiler

101

0

0

0

0

0

Crowcroft Park PS - Roof Repairs

53

0

0

0

0

0

Northenden Primary School - Part Reroof

42

0

0

0

0

0

Abbot Community Primary - Ext Joinery Repair

248

0

0

0

0

0

St Mary's PS - Joinery Repairs

98

0

0

0

0

0

Sandilands PS - Joinery Repairs

181

0

0

0

0

0

Lancasterian ID Secure Lobby

38

0

0

0

0

0

Cheetwood PS - Rewire

499

0

0

0

0

0

Pike Fold Community Sch - Repairs to air handling units

53

0

0

0

0

0

Button Lane PS - Boiler Installation

60

0

0

0

0

0

Schools Capital Maintenance -unallocated

0

5,338

3,000

3,000

0

0

Education Standalone Projects

 

 

 

 

 

 

Paintpots

31

0

0

0

0

0

Community Minded Ltd

28

0

0

0

0

0

Tiny Tigers Ltd-Cheetham Children Centre

79

0

0

0

0

0

Early Education for Two Year Olds - Unallocated

57

0

0

0

0

0

Gorton Youth Zone

538

962

0

0

0

0

Greenheys Toilets

67

0

0

0

0

0

Healthy Pupil Capital Funding

0

263

0

0

0

0

Special Educational Needs grant

38

2,871

164

0

0

0

 

 

 

 

 

 

 

Total Children's Services Programme

31,902

39,002

62,321

4,138

0

0

 

 

 

 

 

 

 

ICT Capital Programme

 

 

 

 

 

 

ICT

 

 

 

 

 

 

Solaris

11

0

0

0

0

0

ICT Infrastructure & Mobile Working Programme

 

 

 

 

 

 

Citrix 7.6 Migration

3

0

0

0

0

0

Mobile Device Refresh

52

0

0

0

0

0

PSN Windows 2003

88

26

0

0

0

0

Data Centre UPS Installation

0

10

0

0

0

0

Core Switch Firmware

28

0

0

0

0

0

New Social Care System

2,039

509

0

0

0

0

End User Computing

796

90

0

0

0

0

Core Infrastructure Refresh

533

0

0

0

0

0

Income Management

1

0

0

0

0

0

Customer & Bus. Relationship Management System

1

0

0

0

0

0

Corporate Reporting Tool (Business Objects)

14

0

0

0

0

0

Internet Resilience

104

50

0

0

0

0

New Rent Collection System

70

14

0

0

0

0

Communications Room Replacement Phase 2

100

500

3,929

500

0

0

Care Leavers Service

91

0

0

0

0

0

Microsoft Enterprise Agreement Licensing renewal

227

0

0

0

0

0

Data Centre Network Design and Implementation

1,949

1,289

0

0

0

0

ICT Investment Plan

0

8,836

10,673

9,600

5,482

0

Infrastructure

 

 

 

 

 

 

Wider Area Network Redesign

26

0

0

0

0

0

 

 

 

 

 

 

 

Total ICT Programme

6,133

11,324

14,602

10,100

5,482

0

 

 

 

 

 

 

 

Corporate Capital Programme

 

 

 

 

 

 

ONE System Developments

23

25

0

0

0

0

Phase 1 Implementation - Locality Plan Programme Office

602

272

0

0

0

0

Integrated Working - Gorton Health Hub

1,400

10,150

8,627

2,619

0

0

Airport Strategic Investment

125,000

0

0

0

0

0

BioMedical Investment

7,000

5,500

6,100

2,700

0

0

Band on the Wall

0

200

0

0

0

0

Manchester Airport Car Park Investment

0

3,700

1,900

0

0

0

 

 

 

 

 

 

 

Total Corporate Capital Programme

134,025

19,847

16,627

5,319

0

0

 

 

 

 

 

 

 

Total Manchester City Council Capital Programme

399,505

359,063

381,086

243,965

86,930

39,001

 

 

 

 

 

 

 

Projects carried out on behalf of Greater Manchester

 

 

 

 

 

 

Housing Investment Fund

95,805

146,522

37,951

0

0

0

 

 

 

 

 

 

 

Total GM projects

95,805

146,522

37,951

0

0

0

 

 

 

 

 

 

 

Total CAPITAL PROGRAMME

495,310

505,585

419,037

243,965

86,930

39,001

 

 

 


Appendix 3

 

Treasury Limits and Prudential Indicators for approval

 

Please note last years approved figures are shown in brackets.

 

Treasury Management Indicators

2019-20

2020-21

2021-22

 

£m

£m

£m

 Authorised Limit - external debt

 

 

 

 

 

 Borrowing

1,351.4

(1,672.7)

1,412.7

(1,684.5)

1,412.9

 Other long term liabilities

170.0

(216.0)

170.0

(216.0)

170.0

 TOTAL

1,521.4

(1,888.7)

1,582.7

(1,900.5)

1,582.9

 

 

 

 

 

 

 Operational Boundary - external debt

 

 

 

 

 

 Borrowing

940.8

(1,381.4)

1,151.7

(1,435.0)

1,275.0

 Other long term liabilities

170.0

(216.0)

170.0

(216.0)

170.0

 TOTAL

1,110.8

(1,597.4)

1,321.7

(1,651.0)

1,445.0

 

 

 

 

 

 

Actual external debt

716.5

(1,192.0)

977.4

(1,259.6)

1,141.5

 

 

 

 

 

 

Upper limit for total principal sums invested for over 364 days

0

(0)

0

(0)

0

 

Capital Expenditure

 

 

 

 

 

 Non - HRA

475.5

(455.5)

370.3

(160.1)

207.4

 HRA

30.1

(41.9)

48.7

(44.3)

36.6

 TOTAL

505.6

(497.4)

419.0

(204.4)

244.0

 

 

 

 

 

 

Capital Financing Requirement

(as at 31 March)

 

 

 

 

 

 Non – HRA

1,331.9

(1,664.4)

1,477.1

(1,730.5)

1,611.1

 HRA

298.1

(298.1)

299.2

(299.3)

300.0

 TOTAL

1,630.0

(1,962.5)

1,776.3

(2,029.8)

1,911.1

 

Maturity structure of borrowing during 2019-20

Upper Limit

Lower limit

 

 

 

 

 

 under 12 months

80%

(70%)

0%

(0%)

 12 months and within 24 months

70%

(100%)

0%

(0%)

 24 months and within 5 years

50%

(80%)

0%

(0%)

 5 years and within 10 years

50%

(70%)

0%

(0%)

 10 years and above

80%

(80%)

40%

(0%)

 

 

 

 

 

Has the Authority adopted the CIPFA Treasury Management Code?

Yes

The status of the indicators will be included in Treasury Management reporting during 2019/20. They will also be included in the Council’s Global Revenue Budget monitoring.

Definitions and Purpose of the Treasury Management Indicators noted above (Indicators are as recommended by the CIPFA Prudential Code last revised in 2017)

 

Authorised Limit - external debt

 

The local authority will set for the forthcoming financial year and the following two financial years an authorised limit for its total external debt, excluding investments, separately identifying borrowing from other long-term liabilities. This prudential indicator is referred to as the Authorised Limit.

 

Operational Boundary - external debt


The local authority will also set for the forthcoming financial year and the following two financial years an operational boundary for its total external debt, excluding investments, separately identifying borrowing from other long-term liabilities. This prudential indicator is referred to as the Operational Boundary.

 

Both the Authorised Limit and the Operational Boundary need to be consistent with the authority’s plans for capital expenditure and financing; and with its treasury management policy statement and practices. The Operational Boundary should be based on the authority’s estimate of most likely, i.e. prudent, but not worst case scenario. Risk analysis and risk management strategies should be taken into account.

 

The Operational Boundary should equate to the maximum level of external debt projected by this estimate. Thus, the Operational Boundary links directly to the Authority’s plans for capital expenditure; its estimates of capital financing requirement; and its estimate of cash flow requirements for the year for all purposes. The Operational Boundary is a key management tool for in-year monitoring.

 

It will probably not be significant if the Operational Boundary is breached temporarily on occasions due to variations in cash flow. However, a sustained or regular trend above the Operational Boundary would be significant and should lead to further investigation and action as appropriate. Thus, both the Operational Boundary and the Authorised Limit will be based on the authority’s plans. The authority will need to assure itself that these plans are affordable and prudent. The Authorised Limit will in addition need to provide headroom over and above the Operational Boundary sufficient for example for unusual cash movements.

 

Actual external debt

 

After the year end, the closing balance for actual gross borrowing plus (separately), other long-term liabilities is obtained directly from the local authority’s Balance Sheet.

The prudential indicator for Actual External Debt considers a single point in time and hence is only directly comparable to the Authorised Limit and Operational Boundary at that point in time. Actual debt during the year can be compared.

Upper limit for total principal sums invested for over 364 days

 

The authority will set an upper limit for each forward financial year period for the maturing of investments made for a period longer than 364 days. This indicator is referred to as the prudential limit for Principal Sums Invested for periods longer than 364 days.

 

The purpose of this indicator is so the authority can contain its exposure to the possibility of loss that might arise as a result of its having to seek early repayment or redemption of principal sums invested.

 

Maturity structure of new borrowing

 

The authority will set for the forthcoming financial year both upper and lower limits with respect to the maturity structure of its borrowing. These indicators are referred to as the Upper and Lower limits respectively for the Maturity Structure of Borrowing.

Local Prudential Indicators

 

The Council has not yet introduced Local Prudential Indicators to reflect local circumstances, but will review on a regular basis the need for these in the future.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendix 4

 

Minimum Revenue Provision Strategy

 

The Council implemented the new Minimum Revenue Provision (MRP) guidance in 2011/12 and has assessed its MRP for 2019/20 in accordance with the main recommendations contained within the guidance issued by the Secretary of State under section 21(1A) of the Local Government Act 2003.

The Council is required to make provision for repayment of an element of the accumulated General Fund capital spend each year through a revenue charge (the Minimum Revenue Provision - MRP).

 

MHCLG Regulations require full Council to approve an MRP Statement, in advance of each year. If the Council wishes to amend its policy during the year this would need to be approved by full Council. A variety of options are available to councils to replace the previous Regulations, so long as there is a prudent provision. The options are:

?         Option 1: Regulatory Method – can only be applied to capital expenditure incurred prior to April 2008 or Supported Capital Expenditure. This is calculated as 4% of the non-housing CFR at the end of the preceding financial year, less some transitional factors relating to the movement to the new Prudential Code in 2003.

 

?         Option 2: CFR Method – a provision equal to 4% of the non-housing CFR at the end of the preceding financial year.

 

?         Option 3: Asset Life Method – MRP is calculated based on the life of the asset, on either an equal instalment or an annuity basis.

 

?         Option 4: Depreciation Method – MRP is calculated in accordance with the depreciation accounting required for the asset.

 

Options 1 and 2 may be used only for supported expenditure, which is capital expenditure for which the Council has been notified by Government that the costs of that expenditure will be taken into account in the calculation of Government funding due to the Council.

 

It is important to note that the Council can deviate from these options provided that the approach taken ensures that there is a prudent provision. The Council has historically followed option 1 for supported expenditure based on the level of support provided by Government through Revenue Support Grant (RSG).

The assets created or acquired under Supported Capital Expenditure predominantly had long asset lives of c. 50 years, such as land or buildings, and an MRP of 4% suggests a significantly shorter asset life. As the level of notional RSG the Council receives has reduced in recent years, it was considered prudent to review the approach to MRP on supported borrowing to reflect the Government support received.

It was therefore agreed that from 2017/18 a provision of 2% of the non-housing CFR as at the end of the preceding financial year is to be made. This is in line with many other local authorities who have reviewed the basis for their MRP and have applied similarly revised policies.

 

It is the Council’s policy that MRP relating to an asset will start to be incurred in the year after the capital expenditure on the asset is incurred or, in the case of new assets, in the year following the asset coming into use, in accordance with MHCLG’s guidance.

 

The Council recognises that there are different categories of capital expenditure, for which it will incur MRP as follows:

?         For non HRA Supported Capital Expenditure: MRP policy will be charged at a rate of 2% on a similar basis to option 1 of the guidance (the regulatory method) but at a lower rate, better reflecting the asset lives of the assets funded through Supported Borrowing.

?         For non HRA unsupported capital expenditure incurred the MRP policy will be:

?         Asset Life Method – MRP will be based on a straight line basis or annuity method so linking the MRP to the future flow of benefits from the asset, dependant on the nature of the capital expenditure, in accordance with option 3 of the guidance.

?         If the expenditure is capital by virtue of a Ministerial direction, has been capitalised under a Capitalisation Directive, or does not create a council asset, MRP will be provided in accordance with option 3 of the guidance with asset lives calculated as per the table below:

 

Expenditure type

Maximum period over which MRP to be made

Expenditure capitalised by virtue of a direction under s16 (2) (b).

20 years.

Regulation 25(1) (a). Expenditure on computer programs.

Same period as for computer hardware.

Regulation 25(1) (b). Loans and grants towards capital expenditure by third parties.

The estimated life of the assets in relation to which the third party expenditure is incurred.

Regulation 25(1) (c). Repayment of grants and loans for capital expenditure.

25 years or the period of the loan if longer.

Regulation 25(1) (d). Acquisition of share or loan capital.

20 years, or the estimated life of the asset acquired.

Regulation 25(1) (e). Expenditure on works to assets not owned by the authority.

The estimated life of the assets.

Regulation 25(1) (ea). Expenditure on assets for use by others.

The estimated life of the assets.

Regulation 25(1) (f). Payment of levy on Large Scale Voluntary Transfers (LSVTs) of dwellings.

25 years.

 

?         For PFI service concessions and some lessee interests: Following the move to International Accounting Standards arrangements under private finance initiatives (PFIs) service concessions and some lessee interests (including embedded leases) are accounted for on the Council’s Balance Sheet. Where this occurs, a part of the contract charge or rent payable will be taken to reduce the Balance Sheet liability rather than being charged as revenue expenditure. The MRP element of these schemes will be the amount of contract charge or rental payment charged against the Balance Sheet liability. This approach will produce an MRP charge comparable to that under option 3 in that it will run over the life of the lease or PFI scheme.

 

In some exceptional cases, the Council will deviate from the policy laid out above provided such exceptions remain prudent. Any exceptions are listed below:

 

?         Where capital expenditure is incurred through providing loans to organisations, and where those loans are indemnified or have financial guarantees protecting against loss, no MRP will be charged in relation to the capital expenditure. Similarly, loans given by the Council where any losses incurred on the investment will impact solely on a third party, such as those provided under the City Deal arrangement with the HCA, will not require an MRP charge.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendix 5

 

Treasury Management Policy Statement

 

  1. This organisation defines its treasury management activities as:

The management of the organisation’s investments and cash flows, its banking, money market and capital market transactions; the effective control of the risks associated with those activities; and the pursuit of optimum performance consistent with those risks.

 

  1. This organisation regards the successful identification, monitoring and control of risk to be the prime criteria by which the effectiveness of its treasury management activities will be measured. Accordingly, the analysis and reporting of treasury management activities will focus on their risk implications for the organisation, and any financial instruments entered into to manage these risks.

 

  1. This organisation acknowledges that effective treasury management will provide support towards the achievement of its business and service objectives. It is therefore committed to the principles of achieving value for money in treasury management, and to employing suitable comprehensive performance measurement techniques, within the context of effective risk management.

 

The Council will invest its monies prudently, considering security first, liquidity second, and yield last, carefully considering its investment counterparties. It will similarly borrow monies prudently and consistent with the Council’s service objectives.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendix 6

 

Treasury Management Scheme of Delegation

 

i           Full Council

?         receiving and reviewing reports on treasury management policies, practices and activities;

?         approval of annual strategy.

 

ii          Responsible body – Audit Committee

?         approval of/amendments to the organisation’s adopted clauses, treasury management policy statement and treasury management practices;

?         budget consideration and approval;

?         approval of the division of responsibilities;

?         receiving and reviewing regular monitoring reports and acting on recommendations;

?         approving the selection of external service providers and agreeing terms of appointment.

 

iii        Body with responsibility for scrutiny - Resource and Governance Scrutiny Committee

?         reviewing the treasury management policy and procedures and making recommendations to the responsible body.

 

iv         City Treasurer

?         delivery of the function.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendix 7

 

Borrowing Requirement

 

The potential long-term borrowing requirements over the next three years are:

 

Table 2

2019/20

2020/21

2021/22

 

£’m

£’m

£’m

 

estimate

estimate

estimate

Planned Capital Expenditure funded by Borrowing

153.1

179.7

174.5

 

 

 

 

Change in Grants & Contributions

-5.1

48.8

2.6

Change in Capital Receipts

3.3

28.8

-0.7

Change in Reserves

16.1

32.7

19.6

MRP Provision

-24.8

-31.3

-37.0

Refinancing of maturing debt (GF)

2.8

2.2

4.7

Refinancing of maturing debt (HRA)

0.2

0

0.5

 

 

 

 

Estimated Borrowing Requirement

145.6

260.9

164.2

Funded by:

 

 

 

GF

145.4

260.9

163.7

HRA

0.2

0

0.5

 

The borrowing detailed in Table 2 maintains the Council within the revised Government Debt Deal limit. The current Debt Deal expires in 2019/20 and it is not clear what will happen for the next Spending Review Period.


Appendix 8

 

Borrowing Strategy

 

General Fund

 

The proposed Capital Budget, submitted to Executive in February and Council in March contains significant capital investment across the city. The scale of the investment means the Council will need to undertake external borrowing in the future and will not be able on to rely on internal borrowing alone. The first tranche of external borrowing was taken from the PWLB in quarter 4 of 2018/19. Where possible, internal borrowing will remain the first option due to the interest savings generated.

 

The Council’s borrowing strategy must utilise the annual provision it is required to make to reduce debt, in the form of its Minimum Revenue Provision (MRP). If MRP is not used to reduce external debt it is held as cash so the most efficient arrangement is for MRP to be used to reduce the new long term debt expected to be required. This ensures that MRP is utilised and does not accumulate as cash on the Balance Sheet. Alternatively, MRP could be used to repay existing debt but this would be at considerable cost in the current interest rate environment.

 

In previous years this has not been an issue as the Council has had significant borrowing requirements year on year which have allowed it to utilise the MRP. However, the borrowing requirement may fall in the long term so a prudent strategy is to seek to borrow in the medium term with maturities to match the estimated MRP that is generated in that period. This avoids an accumulation of cash on the Balance Sheet that would need to be invested at a potential net cost and investment risk to the Council.

 

Following the HRA debt settlement the Council’s debt position is one of significant internal borrowing meaning cash backed reserves and provisions in the HRA are being used in lieu of external debt. The external debt held is predominantly long term in nature.

 

The Council will continue to use its reserves and provisions to maximise internal borrowing whilst seeking to rebalance the portfolio with more medium term debt when there is a need to externally borrow. This must be done with a strong focus on achieving value for money on interest costs and balancing the risks to the overall debt portfolio.

HRA

 

The Council’s proposed capital budget for 2019/20 and beyond does not contain any requirement for the HRA to borrow. It is expected that proposals will be brought forward to build new homes that require funding via borrowing so it is likely the HRA will have a borrowing requirement in 2019/20. Further details can be found in the HRA Business Plan report elsewhere on the agenda. The level of borrowing affordable is restrained by the statutory requirement for the HRA Business Plan to avoid going into a deficit.

The impact of any required further long term borrowing on the Business Plan will be reviewed which will inform the borrowing options pursued. Any temporary borrowing required will be sought from the General Fund. This is discussed further in Appendix 1.

 

Note, in the event that some of the current debt is required to be repaid, for example if one of the LOBO loans was called, the refinancing arrangements would need to be considered.

 

Borrowing Options

 

As stated above the Council’s borrowing strategy will firstly utilise internal borrowing. However, as the overall forecast is for long term borrowing rates to increase the short term advantage of internal and short term borrowing will be weighed against the potential cost if long term borrowing is delayed as rates for longer term loans are expected to increase.

 

New borrowing will be considered in the forms noted below. All options will be evaluated alongside their availability and which provides best value for money. The options below are not presented in a hierarchical order.

Public Works Loan Board (PWLB)

 

PWLB borrowing is available for between 1 and 50 year maturities on various bases. This offers a range of options for new borrowing which could spread debt maturities away from a concentration in longer dated debt and allow the Council to align maturities to MRP.

In the March 2012 Budget the Chancellor announced the availability of a PWLB ‘Certainty Rate’ for local authorities which could be accessed upon the submission of data around annual borrowing plans for individual authorities. The Council submitted its return in April 2018. The Certainty Rate allows a local authority to borrow from the PWLB at 0.20% below their published rates.

The Government has also introduced a PWLB Infrastructure Rate to be borrowed at 0.40% below their published standard rates. There is a bidding process to access this rate and preference given to projects displaying high value for money. There are two bidding rounds each year, one runs from 1st May to 31st July 2018 and the second is from 1st January to 31st March 2019.

These reductions, alongside the flexibility the PWLB provides in terms of loan structures and maturity dates together with the current lack of availability of market debt options, suggest that should long term borrowing be required PWLB borrowing might provide the best value for money.

 

 

 

 

 

 

The Link forecast for the PWLB Certainty Rate is as follows:

 

Table 3

Mar 19

Jun 19

Sep 19

Dec 19

Mar 20

Mar 21

Bank Rate

0.75%

1.00%

1.00%

1.00%

1.25%

1.50%

5 yr PWLB rate

2.10%

2.20%

2.20%

2.30%

2.30%

2.60%

10 yr PWLB rate

2.50%

2.60%

2.60%

2.70%

2.80%

3.00%

25 yr PWLB rate

2.90%

3.00%

3.10%

3.10%

3.20%

3.40%

50 yr PWLB rate

2.70%

2.80%

2.90%

2.90%

3.00%

3.20%

 

A more detailed Link forecast is included in Appendix G to this report.

European Investment Bank (EIB)

 

The EIB’s rates for borrowing are generally favourable compared to PWLB although the margin of benefit has now reduced. Rates can be forward fixed for borrowing from the EIB and this option will be considered if the conditions can be met and it offers better value for money.

The EIB appraises its funding plans against individual schemes, particularly around growth and employment and energy efficiency, and any monies borrowed are part of the Council’s overall pooled borrowing.     

 

Third Party Loans

 

These are loans from third parties that are offered at lower than market rates, for example Salix Finance Ltd is offering loans to the public sector at 0% to be used specifically to improve their energy efficiency and reduce carbon emissions.

Housing Investment Funding and the Homes and Communities Agency

 

Both HIF and HCA are MHCLG funding and only used in specific circumstances, see paragraphs 9.12-16 for further details.

Inter-Local Authority advances

 

Both short and medium term loans are often available in the inter Local Authority market.
 

Market Loans

 

There are usually various offers available from the general market including LOBOs or forward starting loans. The Council will give consideration to forward fixing debt, whereby it agrees to borrow at a point in the future at a rate based on current implied market interest rate forecasts.

Local Authority Bond Agency

 

The UK Municipal Bonds Agency was established in June 2014 with the primary purpose of reducing local authority financing costs by:

 

?         Issuing bonds in the capital markets and on-lending to councils.

?         Lending between councils.

?         Sourcing funding from 3rd party sources, and on-lending to councils.

 

Although the Agency’s aim is to raise finance for Local Authorities by issuing municipal bonds to capital markets, at the time of writing the first bond has yet to be issued. The Council will continue to monitor the Agency’s development and whether it can offer a competitive option for future borrowing.

 

These types of borrowing will need to be evaluated alongside their availability particularly whilst there is a very limited availability of traditional market loans. The traditional market loans available tend to be Lender Option Borrower Option (LOBO) loans and they are not currently offered at competitive rates of interest. LOBOs provide the lender with future options to increase the interest rate whilst the local authority has the option to repay if the increase in the rate is unacceptable to them.

 

Following HRA reform the vast majority of the Council’s existing debt portfolio consists of LOBOs and the Authority needs to consider diversifying its loan book to reduce the impact of any volatility that may cause these loans to be called. It should be noted that the Council’s current LOBO loans are unlikely to be called in the medium term at current interest rates.

Homes and Communities Agency Funding

The Homes and Communities Agency (HCA) has made £31.8m funding available to the City Council and this was received during the three years 2015/16 to 2017/18. The funding is, in effect, a ‘loan’ of the HCA’s receipts from the disposal of its land and property within Greater Manchester (GM) as agreed in the GM City Deal. The funds can be used to invest in any project which supports GM City Deal objectives. Some of the funds are passed on to other GM authorities for projects within their areas.

 

The funding from the HCA is held as an interest free loan until an investment approval is made. At this point the approved element of the loan becomes risk-based with the return to the HCA based on the performance of that investment. The location of the project depends on where the receipts originate from and whether the receipt is due to the sale of residential or commercial property. Proceeds from commercial property are not borough-specific, whereas proceeds from residential property are.

 

The funds received are to be repaid to the HCA in March 2022. No interest will be charged to MCC for the receipt of the funds. Should an investment made not be recovered, the loss is deducted from the amount due to the HCA. Conversely, should any profit be made by an investment these will be added to the amount due to the HCA.

 

Housing Investment Funding (HIF)

 

The Council has arranged with the Homes and Communities Agency to receive housing investment funding on behalf of Greater Manchester. The funds are treated as a loan to the Council in a similar manner to HCA funds as detailed in paragraphs 9.12-14. These monies are then be invested in housing related projects with any losses met by Government (up to 20%) or by guarantee from the ten Greater Manchester Local Authorities (including Manchester). All the Housing Investment Fund schemes are approved by the GMCA and the Council’s role is to act as a host for the financial arrangements.

Total HIF funding of £300m has been agreed with the MHCLG of which £197.7m has been received to date. The majority of HCA and HIF funds are expected to transfer to the GMCA in quarter 4 2018/19 following the Authority being granted the statutory borrowing powers required. The element of the investment which was already committed at the time of the transfer is being retained by the Council until the investment completes.

Sensitivity of the forecast

 

In normal circumstances the main sensitivities are likely to be the two scenarios noted below. Council officers in conjunction with the treasury advisors will continually monitor the prevailing interest rates and the market forecast, adopting the following responses to a change of sentiment:

 

?         If it were felt that there was a significant risk of a sharp FALL in long and short term rates, e.g. due to a marked increase of risks around relapse into recession or of risks of deflation then long term borrowings will be postponed.

?         If it were felt that there was a significant risk of a much sharper RISE in long and short term rates than that current forecast, perhaps arising from a greater than expected increase in world economic activity or a sudden increase in inflation risks, the portfolio position will be re-appraised. The likely action will be that fixed rate funding will be drawn whilst interest rates remain relatively cheap.

External v. Internal borrowing

 

The current borrowing position reflects the historic strong Balance Sheet of the Council as highlighted in Section 5. The policy remains to keep cash as low as possible and minimise temporary investments.

The next financial year is again expected to be one of historically low Bank Rate. This provides a continuation of the opportunity for local authorities to review their strategy of undertaking new external borrowing. At Appendix F there is an in depth analysis of economic conditions provided by Link Asset Services, the Council’s independent treasury advisors.

 

Over the next three years, investment rates are expected to be significantly below long term borrowing rates. This would indicate that value could best be obtained by limiting new external borrowing and by using internal cash balances to finance new capital expenditure or to replace maturing external debt.

This will be weighed against the potential for incurring additional long term costs by delaying new external borrowing until later years when longer term rates are forecast to be significantly higher. Consideration will also be given to forward fixing rates whilst rates are favourable.

Against this background caution will be adopted within 2019/20 treasury operations. The City Treasurer will monitor the interest rate market and adopt a pragmatic approach to changing circumstances, reporting any decisions to the appropriate decision making body at the next available opportunity.

Policy on borrowing in advance of need

 

From a statutory point of view a Local Authority has the power to invest for ’any purpose relevant to its functions under any enactment, or for the purposes of the prudent management of its financial affairs.’ The MHCLG takes an informal view that local authorities should not borrow purely to invest at a profit. This does not prevent the Council temporarily investing funds borrowed for the purpose of expenditure in the reasonable near future.

 

This Council will not borrow in advance of need to on lend. Any decision to borrow in advance in support of strategic and service delivery objectives will be in the context of achieving the best overall value for money, for example to minimise the risk of borrowing costs increasing in the future and that the Council can ensure the security of such funds. In determining whether borrowing is undertaken in advance of need the Council will:

 

?      ensure that there is a clear link between the capital programme and maturity profile of the existing debt profile which supports the need to take funding in advance of need;

?      ensure the ongoing revenue liabilities created and implications for future plans and budget have been considered;

?      evaluate the economic and market factors that might influence the manner and timing of any decision to borrow;

?      consider the merits and demerits of alternative forms of funding;

?      consider the alternative interest rate bases available, the most appropriate periods to fund and repayment profiles to use; and

?      consider the impact of borrowing in advance temporarily (until required to finance capital expenditure) increasing investment cash balances and the consequent increase in exposure to counterparty risk, and other risks, and the level of such risks given the controls in place to minimise them.

Forward Fixing

 

The Council will give consideration to forward fixing debt, whereby the Council agrees to borrow at a point in the future at a rate based on current implied market interest rate forecasts. There is a risk that the interest rates proposed would be higher than current rates it can be beneficial as it avoids the need to borrow in advance of need and suffer cost of carry. It may also represent a saving if rates were to rise in the future. Any decision to forward fix will be reviewed for value for money and will be reported to Members as part of the standard treasury management reporting.

 

Debt Rescheduling

 

It is likely that opportunities to reschedule debt in the 2019/20 financial year will be limited particularly as the Council has no existing PWLB loans other than those expected to be taken in the last quarter of 2018/19.

As short term borrowing rates will be considerably cheaper than longer term rates, there may be some opportunity to generate savings by switching from long term debt to short term debt. These savings will need to be considered in the light of the premiums incurred and the likely cost of refinancing those short term loans once they mature compared to the current rates of longer term debt in the existing portfolio.

The debt portfolio following HRA reform consists mainly of LOBOs, and the premia for rescheduling these make it unlikely there will be a cost effective opportunity to reschedule. The premia relates to the future interest payments associated with the loan and compensation for the lender for the buy-back of the interest rate options the loan has embedded in it.

The Council will continue to monitor the LOBO market and opportunities to reschedule, redeem or alter the profile of existing LOBO debt. The reasons for any rescheduling to take place will include:

 

?      the generation of cash savings and / or discounted cash flow savings;

?      helping to fulfil the strategy outlined above in this section;

?      enhancing the balance of the portfolio (amending the maturity profile and/or the balance of volatility)

Any restructuring of LOBOs will only be progressed if it provides value for money and reduces the overall treasury risk the Council faces. The Council’s Constitution delegates to the City Treasurer the authority to pursue any restructuring, rescheduling or redemption opportunities available.

Consideration will also be given to the potential for making savings by running down investment balances to repay debt prematurely. It is likely short term rates on investments will be lower than rates paid on current debt.

All rescheduling will be reported to the Executive as part of the normal treasury management activity. If rescheduling requires amendments to the Treasury Management Strategy the City Treasurer will be asked to approve them in accordance with her delegated powers and the changes will be reported to Members.

 

 

 

 

 

 

 

 

 

 

Appendix 9

 

Annual Investment Strategy

General Fund

 

Introduction

 

The Council will have regard to the MHCLG’s Guidance on Local Government Investments (the Guidance) and the 2011 and 2017 revised CIPFA Treasury Management in Public Services Code of Practice and Cross Sectoral Guidance Notes (the CIPFA TM Code). The Council’s investment priorities are:

 

?   the security of capital; and

?   the liquidity of its investments.

The risk appetite of the Council is low in order to give priority to the security of its investments. The Council will also aim to achieve the optimum return on its investments commensurate with desired levels of security and liquidity.

The borrowing of monies by an Authority purely to invest or on-lend and make a return is unlawful and this Council will not engage in such activity. However the Council may provide loan finance funded from borrowing if this supports the achievement of the Council’s strategies and service objectives.

The Icelandic banks crisis and the financial difficulties faced by UK and international banks that followed have placed security of investments at the forefront of Treasury Management investment policy. Similarly the move in the local authority sector to commercial investment had led to a reinforcement of these principles under the revised Prudential Code.

 

The Council’s TMSS focusses solely on treasury management investments. CIPFA has revised the Prudential Code to strengthen disclosure requirements for investments which are commercial in nature, in that they are neither treasury or strategic capital investments. The Council does not hold any commercial investments and details of strategic capital investments can be found in the Capital Strategy and Budget Report to the Executive.

Changes to Credit Rating Methodology

 

Through much of the financial crisis the main rating agencies provided some institutions with a ratings ‘uplift’ due to implied levels of government backing should an institution fail. In response to the evolving regulatory regime and the declining probability of government support the rating agencies are removing these ‘uplifts’.

The changes do not reflect any changes in the underlying status of            the institution or credit environment, merely the removal of the implied levels of sovereign support built into ratings during the financial crisis. The regulatory and economic environments now mean that financial institutions are much stronger and less prone to failure in a financial crisis.

The key change to the regulatory framework in respect of banks was introduction of the European Union's Banking Recovery and Resolution Directive (BRRD). In response to the banking crisis some governments used taxpayer funds to support banks. BRRD now requires ‘bail-in’ to be applied in such a scenario. In the UK this requires that after shareholders’ equity, depositors’ funds over c.£85k (linked to the Euro) will be used to support a bank at risk. The £85k threshold is not available to local authorities and all bank deposits are at risk of bail-in. This increases the risk to the Council of holding unsecured cash deposits with banks and building societies.

 

Investment Policy

 

As previously, the Council will not just utilise ratings as the sole determinant of the quality of an institution. It is important to continually assess and monitor the financial sector on both a micro and macro basis and in relation to the economic and political environments in which institutions operate. The assessment will also take account of information that reflects the opinion of the markets. The Council will engage with its advisors to maintain a monitor on market pricing such as ‘credit default swaps’[1] and overlay that information on top of the credit ratings.

Investment in banks and building societies are now exposed to bail-in risk as described above and lower operational limits for these investments were adopted in 2016/17. This is apart from the limit with Barclays bank; Barclays is the Council’s main banker and is the investment destination of last resort for the close of daily trading. These revised limits are operational changes and to preserve flexibility should circumstances change the overall investment limits approved for banks and building societies for 2018/19 will be maintained in 2019/20.

The investment constraint brought by bail-in risk means the Council has sought to identify ways that it can broaden and diversify its basis for lending. During 2018/19 the Council decided to reduce its exposure by maintaining a lower level of bank deposits. This strategy saw a significant proportion of the Council’s investments placed with the Government (via the DMO) or with other Local Authorities.

 

From October 2018, in line with the 2018/19 TMS, the Council has started to deposit in Money Market Funds (MMFs) to further diversify the basis for lending, using four MMFs which meet the Council’s TMSS criteria. Although MMFs are not directly exposed to bail-in risk there could be a secondary exposure related to the extent that the individual Fund includes bank deposits within its portfolio of investments. Application of bail-in in this scenario would impact on the overall status of the Fund and it is likely that the Council would be able to withdraw from participation in the Fund in such a situation.

 

To December 2018 the majority of the investment portfolio was with the DMO and other Local Authorities. For liquidity purposes an average of £15m has been held in Bank Deposits and from October 2018 Money Market Funds deposits have averaged £20m. This highlights the relatively low credit risk that the Council takes when investing.

For 2019/20 investment the Council will continue to consider trading in Treasury Bills, Certificates of Deposit and Covered Bonds. In addition to diversification each of these options offer the Council benefits which are noted in paragraphs 10.32-36 below. Treasury Bills, Certificates of Deposit and Covered Bonds require the Council to have specific custodian and broker facilities which have been opened. Officers are working to monitor these markets to prompt participation in the instruments when rates are favourable. Work is continuing to open further access points to markets and to identify opportunities for benefit which are new to the Council.

 

It should be noted that, whilst seeking to broaden the investment base officers will seek to limit the level of risk taken. It is not expected that the measures considered above will have a significant impact on the rates of return the Council currently achieves.

HRA

 

In order to maintain efficient, effective and economic treasury management for the Council as a whole, the HRA will only be able to invest with the General Fund. This is discussed further in Appendix I.

Specified and Non-Specified Investments

 

Investment instruments identified for use in the financial year are listed below and are all specified investments. Any proposals to use other non-specified investments will be reported to Members for approval.

Specified investments are sterling denominated, with maturities up to a maximum of one year and meet the minimum ‘high’ rating criteria where applicable. Further details about some of the specified investments below can be found in later paragraphs in this Section.

Table 4

Minimum ‘High’ Credit Criteria

Use

Term deposits – banks and building societies*

See Para 10.9.

In-house

Term deposits – other Local Authorities

High security. Only one or two local authorities credit-rated

In-house

Debt Management Agency Deposit Facility

UK Government backed

In-house

Certificates of deposit issued by banks and building societies covered by UK Government guarantees

UK Government explicit guarantee

In-house

Money Market Funds (MMFs)

AAAM

In-house

Treasury Bills

UK Government backed

In-house

Covered Bonds

AAA

In-house

* Banks & Building Societies

 

The Council will keep the investment balance below or at the maximum limit based on the institutions credit rating as detailed in paragraph 10.23. If this limit is breached, for example due to significant late receipts, the City Treasurer will be notified as soon as possible after the breach, along with the reasons for it. Please note this relates to specific investments and not balances held within the Council’s bank accounts, including the general bank account.

 

Creditworthiness policy

 

The Council applies the creditworthiness service provided by Link Asset Services. This service employs a sophisticated modelling approach utilising credit ratings from the three main credit rating agencies; Fitch, Moody’s and Standard & Poor’s. Link supplement the credit ratings of counterparties with the following overlays:

 

?  credit watches and credit outlooks from credit rating agencies

?  Credit Default Swap spreads to provide early warning of likely changes in credit ratings

?  sovereign ratings to select counterparties from only the most creditworthy countries

 

The above are combined in a weighted scoring system which is then combined with an overlay of CDS spreads. The end product is a series of colour coded bands which indicate the relative creditworthiness of counterparties. This classification is called durational banding.

The Council has regard to Link’s approach to assessing creditworthiness when selecting counterparties as it uses a wider array of information than just primary ratings and by using a risk weighted scoring system does not give undue preponderance to just one agency’s ratings.

In summary the Council will approach assessment of creditworthiness by using the Link counterparty list and then applying its own counterparty limits and durations. All credit ratings will be monitored on a daily basis and re-assessed weekly. The Council is alerted to changes to ratings of all three agencies through its use of the Link creditworthiness service.

 

?   If a downgrade results in the counterparty/investment scheme no longer meeting the Council’s minimum criteria, its further use as a new investment will be withdrawn immediately.

?  In addition to the use of Credit Ratings, the Council will be advised of information in Credit Default Swap against the iTraxx benchmark[2] and other market data on a weekly basis. Extreme market movements may result in the downgrade of an institution or removal from the Council’s lending list.

Sole reliance will not be placed on the use of this external service. In addition, the Council will also use market data and market information, information on government support for banks and the credit ratings of that government support.

 

Investment Limits

 

In applying the creditworthiness policy the Council holds the security of investments as the key consideration and will only seek to make treasury investments with counterparties of high credit quality.

The financial investment limits of financial institutions will be linked to their short and long-term ratings (Fitch or equivalent) as follows:

 

                        Long Term     Amount

            Fitch AA+ and above                                  £20 million

            Fitch AA/AA-                                                 £15 million

            Fitch A+/A                                                     £15 million

            Fitch A-                                                          £10 million

            Fitch BBB+                                                    £10 million


The Council will only utilise those institutions that have a short term rating of F2 or higher, (Fitch or equivalent).

UK Government (including the Debt Management Office)      £200 million

Greater Manchester Combined Authority                                                £200 million

Other Local Authorities                                                                   £20 million

In seeking to diversify he Council will utilise other investment types which are described in more detail below and ensure that the investment portfolio is mixed to help mitigate credit risk. The following limits will apply to each asset type:

Total Deposit                                               Amount

Local Authorities                                          £250 million

UK Government                                           £200 million

-       Debt Management Office          

-       Treasury Bills

Money Market Funds                                  £60 million

Certificates of Deposit                                 £25 million

Covered Bonds                                            £25 million

 

It may be prudent to temporarily increase the limits shown above, as in the current economic environment it is increasingly difficult for officers to place funds. If this is the case officers will seek approval from the City Treasurer and any increase in the limits will be reported to Members through the normal treasury management reporting process. Any HCA funds invested with other local authorities will form part of the £20m limit noted above.

            Country Limits

 

The introduction of bail-in arrangements means that the Council’s exposure to bank and building society deposits should be limited and these deposits will only form part of a diversified investment portfolio to help mitigate the risk.

 

            Previously the Council’s treasury management strategies included investment limits to specific countries, such as those rated AAA. The introduction of bail-in arrangements suggests that less reliance can be placed on sovereign support for individual institutions and the country limits have been removed. The focus of credit rating evaluations will be on the individual banks, building societies and organisations.

 

Money Market Funds

 

            The removal of the implied levels of sovereign support that were built into ratings throughout the financial crisis has impacted on bank and building society ratings across the world. Rating downgrades can limit the number of counterparties available and to provide flexibility the Council will use MMFs when appropriate as an alternative specified investment.

            MMFs are investment instruments that invest in a variety of institutions therefore diversifying the investment risk. The funds are managed by a fund manager and have objectives to preserve capital, provide daily liquidity and a competitive yield. The majority of money market funds invest both inside and outside the UK. MMFs also provide flexibility as investments and withdrawals can be made on a daily basis.

MMFs are rated through a separate process to bank deposits. This looks at the average maturity of the underlying investments in the Fund as well as the credit quality of those investments. The Council will only use MMFs where the institutions hold the highest AAA credit rating and those which are UK based.

As with all investments there is some risk with MMFs in terms of the capital value of the investment. European legislation has required existing and new MMFs to convert to a Low Volatility Net Asset Value (LVNAV) basis by January 2019. This basis allows movements in capital value, but there is a restriction that the deviation cannot be more than 20 basis points, e.g. on a deposit of £100 the Fund must ensure withdrawal proceeds are no greater than +/- 20p.

 

For international investments the Council requires that the countries concerned must possess AAA status if there is a direct investment in a sovereign state. This is not applicable to MMFs. Whilst MMFs invest outside the UK their investment risk is identified on the basis of the total Fund rather than the ratings of the individual components within it. Should a country (or institution) become a higher risk in a MMF portfolio the Fund’s management will seek to realign the investment portfolio to maintain the MMF’s overall credit rating.

            Treasury Bills

 

Treasury Bills are marketable securities issued by the UK Government and counterparty and liquidity risk is relatively low although there is potential risk to value arising from an adverse movement in interest rates unless they are held to maturity.

Weekly tenders are held for Treasury Bills so the Council could invest funds on a regular basis. This would provide a spread of maturity dates and reduce the volume of investments maturing at the same time.

            There is a large secondary market for Treasury Bills so it is possible to trade them in earlier than the maturity date if required and to purchase them in the secondary market. In the majority of cases the Council will hold to maturity to avoid any potential capital loss from selling before maturity and will only sell the Treasury Bills early if it can demonstrate value for money in doing so.

 

Certificates of Deposit

 

Certificates of Deposit are short dated marketable securities issued by financial institutions so the counterparty risk is low. The instruments have flexible maturity dates so it is possible to trade them in early although there is a potential risk to capital if they are traded ahead of maturity and there is an adverse movement in interest rates. Certificates of Deposit are subject to bail-in risk as they are given the same priority as fixed deposits if a bank was to default. The Council will only deal with Certificates of Deposit that are issued by banks and meet the credit criteria.

 

Covered Bonds

 

Covered Bonds are debt instruments secured by assets such as mortgage loans. They are issued by banks and other non-financial institutions. The loans remain on the issuing institutions’ Balance Sheet and investors have a preferential claim in the event of the issuing institution defaulting. All issuing institutions are required to hold sufficient assets to cover the claims of all covered bondholders. The Council would only deal with bonds that are issued by banks which meet the credit criteria, or AAA rated institutions, (e.g. insurance companies).

 

Liquidity

 

Based on cash flow forecasts, the level of cash balances in 2019/20 is estimated to range between £0m and £230m. The higher level can arise where for instance large Government grants are received or long term borrowing has recently been undertaken.

Investment Strategy to be followed in-house

 

Link’s view of forecast Bank Rate is noted at Section 8. The current economic
outlook is that the structure of market interest rates and government debt yields have several key treasury management implications:

  • The Bank of England has adopted a more aggressive tone in its provision of guidance to financial markets. The Bank has indicated there will be a need to gradually raise the Bank Rate to 1.5% over the next three years to keep inflation under control.
     
  • Link’s view is that Bank Rate will continue at its current rate of 0.75% until June 2019 when a rise to 1.00% is predicted. Thereafter rises to 1.25% in March 2020, 1.50% in December 2020 and to 1.75% in June 2021 are forecast.

  • Forecasting as far ahead as 2021 is difficult as there are many potential economic factors which could impact on the UK economy. There are also political developments in the UK, (especially over the terms of Brexit), EU, US and beyond which could have a major impact on forecasts;

  • Investment returns are likely to remain relatively low during 2019/20 and beyond;

  • Growth in the Eurozone after several years of depression following the financial crisis started to improve from 2016 and now has substantial strength. However, the European Central Bank is struggling to achieve its 2% inflation target and therefore rates will possibly not start to rise until 2019.

There will remain a cost of carry to any new borrowing which causes an increase in investments as this will incur a revenue loss between borrowing costs and investment returns.

 

The Council will avoid locking into longer term deals while investment rates are at historically low levels unless attractive rates are available with counterparties of particularly high creditworthiness which make longer term deals worthwhile and within the risk parameters set by the Council.

 

For 2019/20 it is suggested the Council should target an investment return of 0.50% on investments placed during the financial year. For cash flow generated balances the Council will seek to utilise its business reserve accounts and short-dated deposits (overnight to three months) in order to benefit from the compounding of interest.

End of year Investment Report

 

At the end of the financial year, the Council will receive a report on investment activity as part of the Annual Treasury Report.

Policy on the use of External Service Providers

 

The Council uses Link Asset Services as external treasury management advisors and has access to another provider who is an approved supplier should a second opinion or additional work be required. The Council recognises that responsibility for treasury management decisions remains with the organisation at all times and will ensure that undue reliance is not placed upon its external service providers.

The Council recognises there is value in employing external providers of treasury management services to acquire access to specialist skills and resources. It will ensure the terms of the Advisor’s appointment and the methods by which their value is assessed are properly agreed and documented, and subjected to regular review.


Appendix 10

 

Proposed Use of Reserves

 

Reserve

 

Closing Balance 31/03/2019

£000

Withdrawals

£000

Additions

£000

Closing Balance 31/03/2020

£000

Closing Balance 31/03/2021

£000

Closing Balance 31/03/2022

£000

Closing Balance 31/03/2023

£000

Purpose

 

Schools Reserve

20,000

(259)

0

19,741

19,482

19,223

18,964

 

 

 

 

 

 

 

 

 

 

General Fund Reserves

 

 

 

 

 

 

 

 

Statutory Reserves

19,133

(10,000)

11,352

20,485

21,945

22,486

22,012

 

Earmarked Reserves

240,923

(99,086)

99,732

241,569

224,180

202,735

188,807

 

General Fund Reserve

21,279

0

165

21,444

21,444

21,444

21,444

 

Total General Fund

281,335

(109,086)

111,249

283,498

267,569

246,665

232,263

 

 

 

 

 

 

 

 

 

 

Housing Revenue Account Reserves:

 

 

 

 

 

 

 

 

Housing Revenue Account General Reserve

67,335

(10,353)

0

56,982

35,471

27,308

27,048

 

HRA PFI reserve

10,000

0

0

10,000

10,000

10,000

10,000

 

HRA Residual liabilities fund

24,000

0

0

24,000

24,000

24,000

24,000

 

Housing Insurance reserve

1,570

0

200

1,770

1,970

2,170

2,370

 

Total HRA

102,905

(10,353)

200

92,752

71,441

63,478

63,418

 

 

 

 

 

 

 

 

 

 

TOTAL RESERVES

404,240

(119,698)

111,449

395,991

358,492

329,366

314,645

 

 

 

 

 

 

 

 

 

 

SCHOOLS RESERVE

 

 

 

 

 

 

 

 

LMS Reserve

20,000

(259)

0

19,741

19,482

19,223

18,964

School balances - These are not MCC resource and so cannot be used by MCC

Sub Total Schools

20,000

(259)

0

19,741

19,482

19,223

18,964

 

STATUTORY RESERVES

 

 

 

 

 

 

 

 

Bus Lane Enforcement Reserve

11,636

(4,242)

5,000

12,394

12,902

12,910

12,418

Ringfenced reserve which can only be applied to specific transport and highways related activity.

On Street Parking

2,863

(5,611)

5,049

2,301

3,615

5,024

6,433

Ringfenced reserve which can only be applied to specific transport and highways related activity.

Ancoats Square Reserve

1,878

(118)

0

1,760

1,642

1,524

1,406

Received from the HCA to cover the revenue costs of maintaining Ancoats Square for a period of at least 25 years.

Spinningfields Commuted Sum

969

(9)

0

960

951

942

933

Funds received as part of an agreement to cover maintenance costs.

New Smithfield Market

349

0

20

369

369

369

369

To contribute towards funding the development plans for the market

Great Northern Square Maintenance Fund

303

(20)

0

283

263

243

223

Set up in accordance with the agreement with the developers of the site. It will be used for upgrading of the square.

Education Endowments

17

0

0

17

17

17

17

Kept as part of future payments for school prizes

Landlord Licensing Reserve

319

0

1,283

1,602

1,387

658

(586)

Smoothing reserve

Art Fund Reserve

35

0

0

35

35

35

35

For art purchases

St Johns Gardens Contingency

764

0

0

764

764

764

764

Contribution from St Johns Gardens tenants for maintenance works

Sub Total Statutory

19,133

(10,000)

11,352

20,485

21,945

22,486

22,012

 

EARMARKED RESERVES

 

 

 

 

 

 

 

 

BALANCES HELD FOR PFI'S

 

 

 

 

 

 

 

 

Street Lighting PFI

567

(37)

0

530

425

255

15

Established to fund the requirements over 25 years re: the PFI contract for Street Lighting service via external contractors

Temple PFI

665

0

12

677

564

441

295

Established to fund the requirements of the PFI scheme over 25 years

Wright Robinson PFI Reserve

1,312

0

40

1,352

1,392

1,432

1,472

PFI Scheme 25 year contract drawdown will be in future years as expenditure exceeds grant.

Total held for PFI's

2,544

(37)

52

2,559

2,381

2,128

1,782

 

?Reserves directly supporting the revenue budget

 

 

 

 

 

 

 

 

Adult Social Care

3,060

(3,643)

4,493

3,910

1,760

0

0

To support Adult and Social Care Improvement Plan

Social Care Reserve

16,597

(7,677)

2,904

11,824

5,609

31

31

To address pressures in social care, in particular the need to invest in early help and prevention in Children's Services and continued pressures on LAC budgets

Crime and Disorder

1,500

(420)

0

1,080

540

0

0

To fund Anti-Social Behaviour Team

Budget smoothing reserve

2,500

(2,500)

0

0

0

0

0

To address pressures in social care, in particular the need to invest in early help and prevention in Children's Services and continued pressures on LAC budgets

Total held to support the revenue budget

23,657

(14,240)

7,397

16,814

7,909

31

31

 

 

 

 

 

 

 

 

 

 

RESERVES HELD TO SMOOTH RISK / ASSURANCE

 

 

 

 

 

 

 

 

Risks

 

 

 

 

 

 

 

 

Historic Abuse Claims Reserve

600

0

0

600

600

600

600

For potential future legal cases

Planning Reserve

1,975

(300)

0

1,675

1,375

1,075

775

Reserve to be used to fund costs of staff and studies required to meet our statutory obligations to bring forward a Local Plan

Transformation Reserve

8,953

0

0

8,953

8,953

8,953

8,953

To support costs of future service change.

Airport Dividend reserve

45,413

(45,413)

45,413

45,413

45,413

45,413

45,413

The additional airport dividend will be used to support future years budget

Land Charges Fees Reserve

373

0

0

373

373

373

373

To mitigate risk across financial years

Pension Risk Fund - MWL

514

0

10

524

0

0

0

To fund wind up costs in 2020/21

Manchester International Festival

1,508

(500)

0

1,008

508

0

0

To fund the additional costs of the Manchester International Festival Fund and Factory.

Highways reserve

702

(28)

0

674

646

618

590

Commuted sums received that will be utilised for highways schemes in future years

Insurance Fund

12,124

(500)

0

11,624

11,124

10,624

10,124

The insurance fund has been established to fund risks that are self-insured.

Fleet Maintenance Reserve

21

(21)

0

0

0

0

0

Reserve created for smoothing the impact of vehicle repair and maintenance costs.

Children's Services Reserve

15

(15)

0

0

0

0

0

The reserve is being held for any unexpected issues arising from Academy transfers given the level of uncertainty around any costs falling to the LA within a short timescale.

Taxi Licensing Reserve

280

0

266

546

546

546

546

This is a smoothing reserve to equalise the income and expenditure of running the function over financial years. Income ringfenced by statute.

Newton Heath Market Reserve

22

0

0

22

22

22

22

To fund future markets expenditure

Rogue Landlord reserve

0

0

100

100

100

100

100

This reserve holds the funding for investigation into poor property conditions in the private rented sector in Manchester with the purpose of improving housing conditions for tenants by enforcing compliance with statutory regulations and standards.

Selective Licensing reserve

300

0

235

535

535

535

535

Costs for administering the reputable landlord initiative and ensure compliance

Investment Estate smoothing reserve

1,000

(700)

0

300

300

300

300

To manage budget pressures due to the volatility in investment income.

Business Rates Reserve

18,416

(2,490)

9,403

25,329

22,839

20,349

19,859

To mitigate Business Rates income risk

TOTAL Risk/Smooth

92,216

(49,967)

55,427

97,676

93,334

89,508

88,190

 

RESERVES HELD TO FUND CAPITAL SCHEMES AND OTHER SPECIFIC PROJECT RELATED COSTS

 

 

 

 

 

 

 

 

Regeneration reserve

13,521

(2,325)

0

11,196

8,871

7,296

6,096

To deliver regeneration projects.

Enterprise zone reserve

893

(75)

563

1,381

1,313

0

0

To fund the borrowing costs of projects

Capital Fund Reserve

48,008

(13,435)

22,405

56,978

56,805

48,178

34,115

Contribution to schemes which are being brought forward to support employment and growth as part of the Council’s Capital Programme. Used to fund high priority strategic development opportunities in the city for those that do not attract external funding. This can also be used for revenue.

Capital Financing Reserve

29,730

0

5,000

34,730

39,730

44,730

49,730

To reflect increase in borrowing costs due to the Council’s capital investment

Eastlands Reserve

4,218

(6,463)

5,118

2,873

2,309

2,179

2,380

English Institute of Sport - Sport England MCFC income

Total to fund capital scheme and other specific relates costs

96,370

(22,298)

33,086

107,158

109,028

102,383

92,321

 

RESERVES TO SUPPORT GROWTH AND REFORM

 

 

 

 

 

 

 

 

Better Care

3,303

(1,955)

0

1,348

75

75

75

Contributions received from CCG's

Town Hall Reserve

10,820

(2,889)

2,400

10,331

7,943

5,732

3,504

To fund revenue expenditure on the Town Hall Complex Programme

Clean City

412

(412)

0

0

0

0

0

To support green initiatives

NW Construction Hub Reserve

11

(11)

0

0

0

0

0

The capital programme section manages the NWCH, other LA’s pay a fee to use the service and the income is used to cover the cost of retendering every three years.

Our Manchester reserve

5,092

(4,685)

1,100

1,507

7

7

7

Additional investment made available as part of the 2017-2020 budget process to drive forward the delivery of Our Manchester

TOTAL

19,638

(9,952)

3,500

13,186

8,025

5,814

3,586

 

GRANTS USED OVER ONE YEAR

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

English Partnership (HCA)

1,562

(500)

0

1,062

562

0

0

HCA approval required to Fund Development appraisal and Eastlands Project team

Other Grants and Contributions

443

(451)

90

82

82

82

82

Various local Environment scheme and initiatives i.e. 'clean up campaigns'

Contributions Other Local Authorities

358

(71)

35

322

322

322

322

Relates to various ongoing Civil Contingencies schemes.

Other Grants and Contributions Regeneration

116

(26)

0

90

90

90

90

Unspent grant received in previous year

Fraud Fund

136

(70)

0

66

0

0

0

Unspent grant received in previous year

Supporting People

418

(418)

0

0

0

0

0

Unspent grant received in previous year

Asylum Seekers

358

0

0

358

287

191

191

£482k will be drawn down from the Asylum Seekers reserve that was originally set aside from The Target Asylum Contracts, earned by the NW consortium team. This will fund the Local Authority Asylum Support Officer (LAASLO) project. Remaining balance is to fund residual costs to be incurred by the local authority

Collection Initiatives Reserve

839

(197)

0

642

580

580

580

Small reserves on Corporate Core

Flood management reserve

74

0

0

74

74

74

74

Unspent grant received in previous year

TOTAL

4,304

(1,733)

125

2,696

1,997

1,339

1,339

 

SMALL SPECIFIC RESERVES

 

 

 

 

 

 

 

 

Investment Reserve from Surpluses

151

(151)

0

0

0

0

0

Funding belonging to schools which the Council holds on their behalf. The purpose is to fund repairs and improvements to school kitchens.

Nuclear Free Zone

51

0

0

51

51

51

51

General reserve

Highways Commuted Sum

599

(14)

0

585

571

557

543

Funds received as part of developer agreements

NSM - Car Boot

263

(45)

0

218

228

238

248

Used to fund repairs and maintenance of facilities for traders.

Cemeteries Replacement

401

0

40

441

481

521

561

To purchase land for burials

Primary School Catering Reserve

127

(127)

0

0

0

0

0

Reserve established to support the Service's competiveness by smoothing school meal prices during the 3 year price planning period.

Catering R & M Insurance Account

166

(166)

0

0

0

0

0

Reserve established to meet refurbishment cost of school kitchens.

Brexit Reserve

241

(346)

105

0

0

0

0

To fund BREXIT related costs that fall across more than one year

Councils with ALMOs Group (CWAG) Reserve

70

(10)

0

60

50

40

30

Held in relation to the running costs of CWAG which is administered by MCC

Graves And Memorials

97

0

0

97

97

97

97

Money held in trust for repair and development costs for gravestones

Other Small Specific reserves

28

0

0

28

28

28

28

Small specific reserves

Total Small Specific Reserves<

Supporting documents: