Agenda item

Agenda item

Capital Support for Developments and Regeneration

Report of the Deputy Chief Executive and City Treasurer

 

This report is to inform Members of the approaches the Council may use to support regeneration across the city, alongside case studies of how such approaches have been used. It also provides details of the recent and expected changes to the local authority capital financing framework.

Minutes:

The Committee considered the report of the Deputy Chief Executive and City Treasurer, which discussed the range of approaches the Council may take to support regeneration across the city. The report included a selection of case studies setting out how such approaches had successfully been used. A summary of recent and expected changes to the local authority capital financing framework was also included.

 

Key points and themes in the report included:

 

  • An overview of key milestones in driving growth, regeneration and the development of robust public - private partnerships to create opportunities for those who live and work in Manchester, and the Council’s role in convening the necessary interventions to deliver long term growth.
  • An analysis of the Council’s economic base, as determined by a number of official sources.
  • An overview of the Council’s Capital Strategy 2020/21 priority areas and explanation of its role and purpose; and
  • Case studies of successful partnership arrangements with Victoria North and the Manchester College Estate Development and Rationalisation Programme

 

Some of the key points that arose from the Committee’s discussions were:

 

  • Manchester’s current position in terms of its current economic productivity, in light of impact of the COVID pandemic on the local economy.
  • The impact of population growth and the associated financial support that provided by central government
  • The impact of the COVID pandemic on investment income, with particular reference to Manchester Airport Group
  • The anticipated financial impact of the cessation of the furlough scheme on Council Tax and Business Rates revenue, as well as the impact on residents.
  • The capital Strategy’s decision making function and how effectively the Council communicates capital spend to residents.

 

In considering information concerning Manchester’s economic position, a member noted that the GVA figures set out in the report were from 2017 and asked whether more recent information about the city’s economic position was available. The Deputy Chief Executive and City Treasurer explained that the most recent, publicly circulated GVA figures were used in the report’s comparison. More up-to-date figures were available and could be circulated to committee members, however it was important that members note that those figures would not present a fully consolidated economic picture. 

 

Noting the level of investment income that was predominantly generated from Manchester Airport in the 2019/20 financial year, members asked whether more was understood about the level of dividend that the Council could anticipate, in view of the economic impact of significantly reduced international travel. Mindful of the commercial sensitivities associated with financial matters for a publicly listed company, the Deputy Chief Executive and City Treasurer said that prudent assumptions had been made in the budget strategy, where support for key council services and specific projects could be affected. She added that whilst the amount received through the dividend was significantly lower in 2020/21, due to the financial impact of the pandemic, some recovery was anticipated but this would not be to previous levels and the budget strategy is not reliant on the airport dividend.

 

The Committee discussed the upcoming cessation of the furlough scheme and the anticipated impact on Council Tax and Business Rates income. The Deputy Chief Executive and City Treasurer said that whilst it was difficult to be precise about the expected drop in both income streams, particularly for Business Rates, support was being developed where possible to mitigate the impact on affected residents. The Deputy Leader (Finance) added that information would be circulated to members, setting out the available support to affected residents. She also highlighted the current buoyancy in the local jobs market which could mitigate the impact. The Chair highlighted that the Committee’s future Work Programme included a piece of work with the Revenue and Benefits team on Collections and Family Poverty for the Committee to consider in greater depth.

 

There was a discussion about the decision-making process for new capital projects and how they are assessed against other strategic priorities. TheDeputy Chief Executive and City Treasurer explained that projects are assessed against a number of criteria including contributions to social value, the carbon reduction agenda, and funding regime as well as other city priorities. She explained that whilst the report had been drafted with a particular focus on the capital investment perspective of regeneration, it did not reflect the work undertaken by officers in the Growth and Development team to ensure that wider corporate priorities are upheld and coordinated to best meet the needs of the Manchester population and ensure all possible benefits have been leveraged. Discussions then moved to how well capital spend is explained to Manchester’s communities. The Committee was informed that a wider piece of work was planned to provide communities with a clearer understanding of the purpose and function of the capital programme and how such expenditure greatly benefits the city.

 

There was a discussion about the impact of the city’s continued growth and increase in population and the support offered to growing cities by central government. The Deputy Chief Executive and City Treasurer said that one of the challenges for a local authority with a high number of properties in lower Council Tax bands and a rapidly growing population is keeping pace with the delivery of services as the amount raised is limited. She added that this point was regularly raised with central government through Spending Review submissions as part of processes. The Deputy Leader (Finance) also spoke about the discrepancies between the Council’s projections of growth in the city when compared with central government’s projection. She added that lots of work had been undertaken by the Council in respective of population modelling to provide an analysis of the economic benefits alongside calls on services.

 

A member asked whether there had been any response to the Council’s request to be included in the levelling up agenda. The Deputy Leader (Finance) said that the Council had made a positive case to Government within the context of the levelling up fund in terms of where the Council believes it should get investment development opportunities across the city, for the benefit of Manchester residents, however, to date no feedback had been received.

 

Decision

 

To note the report.

 

Supporting documents: