Report of the Chief Executive and the Deputy Chief Executive and City Treasurer attached

 

This report provides an update on the Council’s overall financial position and sets out the next steps in the budget process, including scrutiny of the draft Budget proposals and Budget report by this Committee.  Each Scrutiny Committee will receive a budget report aligned to its remit.  The report also outlines the officer proposals for how the Council could deliver a balanced budget for 2020/21, the details of which will be discussed at the relevant scrutiny committees.

 

 

The Committee considered a report of the Chief Executive and the Deputy Chief Executive and City Treasurer, which provided an update on the Council’s overall financial position and set out the next steps in the budget process.  In doing so, the report outlined Officer proposals for how the Council could deliver a balanced budget for 2020/21.

 

In conjunction with the above, the Committee also received and considered the draft Council Business Plan for 2020/21 and the Corporate Core medium term financial plan (MTFP) and budget proposals for 2020/21, which included those areas of service which were in the remit of Resources and Governance Scrutiny Committee but not within the Corporate Core (namely operational property, facilities management and the investment estate from within the Growth and Development directorate).

 

Officers highlighted that the 2020/21 budget would be a one year roll over budget.  It would reflect the fact the Council had declared a climate emergency and would also continue to reflect the priorities identified in the previous three-year budget strategy.

 

Taken together, the reports and the MTFP illustrated how the directorate would work to deliver the Our Corporate Plan and progress towards the vision set out in the Our Manchester Strategy.

 

In relation to the Council’s update Financial Strategy and Budget 2020/21, some of the key points that arose from the Committees discussions were:-

 

·                What was the potential impact on the Council’s income with the anticipated review by Government on Business rates and what plans had the Council in place to address any impact;

·                Clarification was sought on the forecasted in-year overspend of £4.2m for 2019/20 and whether this was against the original or revised budget and connected to this what were the overspends within Children’s Services and Adult Social Care against their original budgets;

·                How did the Council intend to meet the cost of the estimated overspend of £4.2m;

·                What was the intended use of the GMCA return/refund relating to Business Rates and Waste Disposal of £7.2m and why was it to be spread equally across 2020-2022;

·                What was the source(s) of the additional commercial income of £8m;

·                Clarification was sought on what was the total amount of additional income from Government the Council would receive for 2020/21;

·                It was commented that savings targets within Adults Services either needed to be achievable, as this service area had never achieved previous targets that it had been set, or accept that what was being asked of the service was not achievable and cease asking this of the service; and

·                Clarification was sought what the £46.9m capital financing cost was in relation to and what were the expected interest payment figure for 2020/21.

 

The Deputy Chief Executive and City Treasurer advised that the proposals outlined within the Queens Speech was that changes would be compensated through Section 31 grants to mitigate any immediate impact should there be changes to Business Rate retention levels.  She commented that there would need to be a longer term policy debate by Government on the role of Business Rates and Local Government funding.

 

The Deputy City Treasurer clarified that the entire in-year overspend for the Council stood at £4.2m, with overspends mainly in Children’s Services and Adult Social Care, which were offset with underspends from other areas.  She advised that this forecasted overspend was against the most recent revised budget (which included amounts that had been set aside in the original budget for later in the year, and subsequently allocated into specific areas) and not the original budget for 2019/20.  The Deputy City Treasurer advised that she did not have the detail of the overspends within Children’s Services and Adult Social Care against their original budgets but agreed to provide this to the Committee after the meeting.  The Committee was informed that the Council would use its general fund reserves if the overspend remained at £4.2m at the end of the financial year.

 

The Committee was advised that the £7.2m GMCA return would form part of the general resources income into the budget and as such it would used as required to help underpin the budget.  The reason it was spread across 2020 to 2022 was to ensure longer term funding availability for some investment priorities.

 

The Deputy Chief Executive and City Treasurer advised that the additional commercial income of £8m was an aggregate view of all of the dividends and income due to the Council.

 

The Deputy City Treasurer clarified that the Social Care Grant equated to an extra £13m for the Council which was the most significant growth in funding.  There was also additional funding of circa £1.4m for Public Health.  The Deputy Chief Executive and City Treasurer commented that Directorate budgets had increased to incorporate the additional Social Care Funding as well as the proposed Council Tax and precept increases.

 

The Deputy Chief Executive and City Treasurer commented that the capital financing cost was a combination of the minimum revenue provision the Council was required to make, interest repayment costs and any revenue contributions to capital.  The Deputy City Treasurer advised that she would provide the Committee with details on the expected interest payment figure for 2020/21 after the meeting.

 

In relation to the Council’s Business Plan 2020/21, some of the key points that arose from the Committees discussions were:-

 

·                It was commented that within the Council Business Plan 2020/21, there was little reference to keeping the basics on track insomuch as the everyday services that residents relied on, which was an element of achieving the Our Manchester vision by 2025;

·                In relation to the Zero Carbon Manchester corporate priority, what was the funding for this and how would scrutiny review whether this priority was being achieved;

·                Was there any budget for the retrofitting of existing properties to improve their energy efficiencies and for embedding climate change commitments into Manchester’s next Local Plan;

·                Had there been any costed Invest to Save initiatives within the Capital Strategy to address the increasing use of private temporary accommodation by the Council;

·                Of the number of affordable homes that had been built to date, how much of this had been facilitated through the release of council land;

·                What was meant by the term ‘target hardening’ solutions for fly-tipping hotspots;

·                It was requested that more granular data be provided on the number of people killed or seriously injured on Manchester's roads and was asked why there did not appear to be any road safety money beyond the next financial year;

·                What steps were being taken to bridge the gap between resident and workplace wages;

·                More detail was request in relation to the number of residents with no formal qualifications; and

·                Was there any resource allocation for improving equality and diversity within the Council.

 

The Deputy Chief Executive and City Treasurer advised that the Zero Carbon Action Plan was going through a scrutiny process and part of this would include reviewing investment priorities.  The Corporate Core Business Plan had some limited additional revenue funding to strengthen capacity in this area and the Capital Strategy would require decisions to be made to enable the Council to achieve its zero carbon commitments.

 

The Deputy Chief Executive and City Treasurer confirmed that there were additional resources going into the Local Plan work to embed the Council’s climate change commitments, but acknowledged that the Council had limited resources available and over the next five years would face some challenging decisions.

 

The Deputy City Treasurer commented that the Council Business Plan was an overarching plan and the detail in relation to scrutinising the homelessness business plan, including the use of temporary accommodation would be considered by the Neighbourhood and Environment Scrutiny Committee.  The Chair suggested that the Committee received a future report on what financial steps the Council was taking within its capital budget to improve the provision of good quality temporary accommodation within the broad geographical boundaries of the city.

 

The Deputy Chief Executive and City Treasurer advised that she would provide the detail on the number of affordable home built to date which had been facilitated through the release of council land to Members following the meeting.

 

The Director of Commercial and Operations advised that ‘target hardening’ solutions referred to the physical steps that would be taken to prevent fly tipping and provided an example of what this might entail.

 

The Director of Policy, Performance and Reform explained that the Our Manchester Local Industrial Strategy was intended to address the gap between resident and workplace wages to make for a more inclusive economy.

 

The Deputy Chief Executive and City Treasurer advised that there was resource allocated within the revenue budget specifically for equality and diversity.  The underlying financial level of resource remained the same but there was an increase in the level of focus and capacity into this area.

 

In relation to the Corporate Core Budget Report 2020/21, some of the key points that arose from the Committees discussions were:-

 

·                Could an example be given of how the Council intended to develop a more diversive workforce;

·                Why was it proposed to delete 12 posts within Revenue and Benefits service which had not been filled;

·                There was concern that posts within services were being held vacant for long periods of time only to then be deleted;

·                It was suggested that the Council investigated the feasibility of further investment in additional public conveniences within and across the city;

·                Further clarification was requested in relation to the proposal that the Council granted a lease for the non-core investment assets at Manchester Airport for a term of 275 years.

 

The Interim Director HROD advised that a range of activities would be looked at in relation to improving the diversity of the workforce, which would be informed by the Council’s existing BAME and disabled workforce and then sent out for consultation.  An external review on the Council’s processes in terms of race had also been undertaken and it was anticipated that the outcome of this review would be available for Members in spring 2020.

 

The Deputy Chief Executive and City Treasurer explained that there had been a number of vacant posts within the Revenue and Benefits Service which had been vacant for some time and there had been a shift of work with the roll out of Universal Credit which had reduced the workload of part of this service and due to this change the Council had taken the decision to delete these vacancies, whilst investing in the areas of the service that provided support to residents in terms of the collection of Council Tax and Business Rates.

 

The Strategic Director (Growth and Development) advised that the lease agreement for the non-core assets at Manchester Airport was complex and agreed to provide a detailed briefing note to the Committee.

 

Decision

 

The Committee:-

 

(1)       Recommends that their comments be submitted for consideration by the Executive at their meeting on 15 January 2020;

(2)       Requests that Officers provide additional information to the Committee on the following areas in a timely manner:-

·                detail of the overspends within Children’s Services and Adult Social Care against their original budgets

·                the expected interest payment figure for 2020/21 in relation to the capital financing cost

·                detail on the number of affordable home built to date which had been facilitated through the release of council land

·                detail of the lease agreement for the non-core assets at Manchester Airport.

(3)       Requests a future report on what financial steps the Council is taking within its capital budget to improve the provision of good quality temporary accommodation within the broad geographical boundaries of the city, including invest to save proposals for temporary accommodation units for both homeless families and supported and semi-supported housing options to address the needs of homeless people, and young people at risk of homelessness.

(4)       Requests that Officers and the Executive Member for Finance and Human Resources investigate the feasibility of further investment in additional public conveniences within and across the city and provide a response back to the Committee or the Neighbourhoods Scrutiny Committee, in due course.