Agenda and minutes

Apologies for absence were received from Councillors Brownridge and Roberts.

There were no public questions received.

Members considered the draft minutes of the Policy Overview and Scrutiny Committee held on 26th January 2023

It was reported that the Select Committee recommended to Council all the budget reduction proposals considered.

RESOLVED – That the deliberations and comments of the Policy Overview and Scrutiny Committee held on 26th January 2023 be noted.

Consideration was given to the Draft Minutes of the Policy Overview and Scrutiny Committee held on 7th February 2023 of the Opposition budgets, Liberal Democrat and Conservatives. The Policy Overview and Scrutiny committee had recommended that Cabinet review the Liberal Democrat proposals and reject the Conservative proposals.

Cabinet considered the proposals and summarised information in relation to the Liberal Democrat proposals.

RESOLVED – That

1. The deliberations and comments of the Policy Overview and Scrutiny Committee held on 7^th February 2023 be noted.
2. The alternative budget proposals presented by the Liberal Democrats and Conservatives Groups would not be accepted.

Consideration was given to a report of the Director of Finance which report Cabinet with an update on the Council’s 2022/23 forecast revenue budget position at Annex 1 and the financial position of the capital programme as at 30 November 2022 (Month 8) together with the revised capital programme 2022/23 to 2027/28, as outlined in section two of the report at Annex 2.

Revenue Position

The forecast outturn position for 2022/23 was a projected deficit variance of £2.233m after allowing for approved and pending transfers to and from reserves. An operational deficit of £3.233m reduced by £1.000m with the anticipated effect of management actions and strengthened restrictions in relation to expenditure and recruitment. Whilst improving, it was recognised that this remained a challenging position and every effort would be made to reduce the overall variance before the year end.

The position included additional costs and pressures that had been identified by the Authority in this financial year as a result of the lasting impact of the COVID-19 pandemic.

There were currently two areas which continued to endure significant pressures attributed to the on-going impact of the pandemic; Community Health and Adult Social Care was reporting an adverse variance of £5.717m and Children’s Social Care was recording £3.477m. These pressures were being offset against a corporate provision of £12.000m COVID-19 Legacy funding which was set aside during the 2022/23 budget setting process specifically to mitigate the on-going costs of the pandemic. The residual balance of £2.806m was being used to reduce the operational pressure. This would be monitored for the remainder of the financial

year with action taken to address variances and take mitigating action as detailed in the report.

An update on the major issues driving the projections was detailed within Annex 1, Section 2.

The forecast pressure of £2.233m at Month 8 was a £2.219m reduction in the adverse position of £4.452m reported at quarter 2 and forecasted the impact of, as previously reported, the management actions that had been strengthened across all service areas to review and challenge planned expenditure, control recruitment and to maximise income. It was therefore anticipated that by the year end, the outturn deficit position should reduce further and that this would be demonstrated in the final monitoring report which will be presented to Cabinet at month 9.

Information on the Month 8 position of the Dedicated Schools Grant (DSG), Housing Revenue Account (HRA) and Collection Fund was also outlined in the report.

Against a generally improving position, the DSG was now forecasting an in-year surplus of £3.287m (£3.215m at quarter 2), which had reversed the deficit brought forward leaving a forecast year end surplus of £0.514m (£0.442m at quarter 2). Action would continue to be taken with the aim of mitigating cost pressures and delivering and maintaining a surplus position. To assist, Oldham has been invited by the Government to take part in the Delivering Better Value in SEND (Special Educational Needs and Disabilities) Programme which will provide dedicated support for the SEND  ...  view the full minutes text for item 7.

Consideration was given to a report of the Director of Finance which provided Cabinet with the budget reduction requirement and the Administration’s budget proposals for 2023/24 and a forecast of the 2024/25 position having regard to the Provisional Local Government Finance Settlement (PLGFS) published on 19 December 2022. The report also presented the financial forecasts for the remainder of the Medium Term Financial Strategy (MTFS) period 2025/26, 2026/27 and 2027/28.

A version of the Revenue Budget 2023/24 and 2024/25 and Medium Term Financial Strategy 2023/24 to 2027/28 was presented to the Policy Overview and Scrutiny Committee (POSC) on 26 January 2023. The Committee scrutinised the report and the other reports on the agenda that form a core part of the Council’s strategic financial planning framework.

This report included the latest financial information and updates the financial position presented to and approved by Cabinet on 12 December 2022 using information from the PLGFS published on 19 December 2022 and the month 8 financial monitoring forecasts. It also provides a commentary on the changes from the position presented to the POSC on 26 January 2023.

The changes compared to the POSC report relate primarily to the recalculation of the Business Rates Tax Base and Grant in Lieu of Business Rates as a result of the submission to Government of a statutory return, the NNDR1.

Section 1 presented an introduction to the report and explained the report format.

Section 2 set out the key Council Policies and Strategies including the Co-operative Council Values, Corporate Plan, Constitution and Rules of Procedure, as the framework within which the Budget has been prepared.

Section 3 presented the Local Government Finance developments which had an impact on 2023/24 and future years budgets. It also highlighted the Chartered Institute of Public Finance and Accountancy (CIPFA) Financial Resilience Index, the CIPFA Financial Management Code and a commentary on financial resilience, all of which were of importance when considering the Council’s financial standing in the context of budget setting for 2023/24 and future years.

Section 4 presented the Local Government Finance Policy Statement 2023/24 and 2024/25 which set out the Government’s intentions to assist financial planning for Councils. It confirmed the PLGFS for both 2023/24 and 2024/25 would be single year Settlements and that reforms to redistribute funds such as the Review of Relative Needs and Resources (Fair Funding Review) would not progress until 2025/26 at the earliest.

Section 5 detailed the impact of the 2023/24 PLGFS which was the fifth consecutive one-year Settlement. This included key information in relation to overall funding levels, Council Tax referendum limits and grants for 2023/24.

Section 6 presented the 2022/23 revised budget and year end forecasts. The starting point for preparing the 2023/24 revenue budget estimates was the underlying base budget of £250.517m. The 2022/23 revenue budget forecast outturn position highlighted a current unfavourable projected variance for 2022/23 of £2.233m but the commentary advised that this may be improved by the continuation of management action to control expenditure in year. The month 6  ...  view the full minutes text for item 8.

Consideration was given to a report of the Director of Finance which presented to Cabinet the proposed Council Tax Reduction Scheme for 2023/24 prior to its consideration by full Council on 1 March 2023.

There is a requirement to have a local Council Tax Reduction (CTR) scheme to support residents of working age on a low income who qualify for assistance in paying Council Tax. The Local Government Finance Act 2012 places a requirement that each year a Billing Authority must consider whether to revise its Council Tax Reduction scheme or to replace it with another scheme. Any change to the 2023/24 scheme must be agreed by full Council in line with budget setting and no later than 10 March 2023. For Oldham, this required the Council to agree a revised 2023/24 scheme at the 1 March 2023 Council meeting. Any proposed change must be subject to prior consultation with the major preceptors (for Oldham this is the Greater Manchester Combined Authority), and with the public.

The scheme for those of pensionable age was set by the Government and cannot be changed.

A major consultation exercise has not been undertaken regarding changes to the CTR scheme and the Greater Manchester Combined Authority has been provisionally advised that no change to the scheme was proposed.

In this regard, the proposal that the CTR scheme for 2023/24 remained the same as that operating in 2022/23 was presented to the Policy Overview and Scrutiny Committee on 26 January 2023 as part of the suite of documents that presented the proposed revenue, capital and Housing Revenue Account budgets for 2023/24. After scrutinising the proposal, the Select

Committee was content to accept the proposed approach to the 2023/24 CTR scheme and commend this to Cabinet.

In taking this decision, the Select Committee was aware that the Council has provided further relief to CTR claimants via the Household Support Fund, its response to the Cost of Living Crisis, together with other initiatives funded from Council resources. In addition, announced within the Provisional Local Government Finance Settlement on 19 December 2022 was a new Council Tax Support Fund of £100m nationally for 2023/24. The Government expected Local Authorities to use the majority of their funding allocations to reduce bills for current working age and pension age Local Council Tax Support (LCTS) claimants by up to £25. Councils can use their remaining allocation as they see fit to support vulnerable households with Council Tax bills and a local scheme would be prepared to ensure the maximum benefit to Oldham residents. On 23 December 2022 it was announced that Oldham’s allocation for this ringfenced grant is £0.573m.

Another important factor when considering a change to the CTR scheme was that the full roll out of Universal Credit (UC) was not yet completed and this added further uncertainty when assessing the likely impact of changes to CTR relief.

The Government had recently delayed the full UC roll out to 2028, but as Oldham was a pilot Authority for the scheme,  ...  view the full minutes text for item 9.

Consideration was given to report of the Director of Finance which set out the Capital Strategy for 2023/24 to 2027/28 and thereby the proposed 2023/24 capital programme, including identified capital investment priorities, together with the indicative capital programme for 2024/25 to 2027/28, having regard to the resources available over the life of the programme.

The Council’s Capital Strategy and capital programme were set over a five year timeframe. The proposed Capital Strategy and programme for 2023/24 to 2027/28 took the essential elements of the 2022/23 to 2026/27 and previous years’ strategies and programmes and moved them forward in the context of the financial and political environment for 2023/24.

The Strategy included a longer-term vision, a forward look at those projects that were likely to run beyond the five year strategy and programme period or be initiated subsequently. This covered a timeframe for the 10 years from 2028/29 to 2037/38.

The format of the Capital Strategy reflected the requirements of the latest Prudential and Treasury Management Codes issued by the Chartered Institute of Public Finance and Accountancy (CIPFA). The strategy therefore presented:

• A high-level long-term overview of how capital expenditure, capital financing and treasury management activity contribute to the provision of services;

• An overview of how the associated risk is managed; and

• The implications for future financial sustainability.

The Capital Strategy was presented at Appendix  to the report. It was prepared in 15 sections and ensured that Members were presented with the overall long-term capital investment policy objectives and resulting Capital Strategy requirements, governance procedures and risk appetite

The Strategy was aligned with the Creating a Better Place programme which was focused on building more homes for the borough’s residents, creating new jobs through regeneration. This also incorporated the Medium-Term Property Strategy and Housing Strategy and aimed to deliver its ambition in ways that contribute to a reduction in carbon emissions in support of the Council’s Green New Deal strategy.

Section 1 of the Capital Strategy highlighted the aims of the Capital Strategy and its links to the Council’s Corporate Plan and the Oldham Plan (Our Future Oldham). This section of the report also describes more fully the Creating a Better Place programme (encompassing the Medium-Term Property Strategy and Housing Strategy) which is a significant element of the Council’s planned Capital Expenditure over the five-year period 2023/24 to 2027/28.

Annex C of Appendix 1 sets out the proposed capital expenditure and financing for the period covered by the Capital Strategy, 2023/24 to 2027/28.

The Strategy also advises that the Council is proposing to continue the use the flexibility provided by the Government to use capital receipts to fund the revenue cost of transformation. The 2023/24 revenue budget would rely on up to £2.600m of such funding from capital receipts.

The 2022/23 month 8 capital monitoring position presented alongside this report included expenditure projections that were a key determinant of the 2023/24 programme. As many schemes span more than one year, the anticipated level of reprofiling between years sets  ...  view the full minutes text for item 10.

Consideration was given to a report of the Director of Finance which sought to present to Cabinet, the strategy for 2023/24 Treasury Management activities including the Minimum Revenue Provision Policy Statement, the Annual Investment Strategy and Prudential Indicators together with linkages to the Capital Strategy.

The report outlined the Treasury Management Strategy for 2023/24 including the Minimum Revenue Provision Policy Statement, Annual Investment Strategy and Prudential Indicators together with linkages to the Capital Strategy.

The Council was required through regulations supporting the Local Government Act 2003 to ‘have regard to’ the Prudential Code and to set Prudential Indicators for the next three years to ensure that the Council’s capital investment plans were affordable, prudent and sustainable. It was also required to produce an annual Treasury Strategy for borrowing and to prepare an Annual Investment Strategy setting out the Council’s policies for managing its investments and for giving priority to security and liquidity of those investments.

The Chartered Institute of Public Finance and Accountancy (CIPFA) Code of Practice on Treasury Management 2021 (the Code) also required the receipt by full Council of a Treasury Management Strategy Statement.

The Strategy for 2023/24 covers two main areas.

1) Capital Issues:

• The Capital expenditure plans and the associated Prudential Indicators

• The Minimum Revenue Provision (MRP) Policy Statement

2) Treasury Management Issues:

• The Current Treasury Position

• Treasury Indicators which limit the treasury risk and activities of the Council

• Prospects for Interest Rates

• The Borrowing Strategy

• The Policy on Borrowing in Advance of Need

• Debt Rescheduling

• The Investment Strategy

• The Creditworthiness Policy

• The Policy regarding the use of external service providers.

The report therefore outlined the implications and key factors in relation to each of the above Capital and Treasury Management issues and made recommendations with regard to the Treasury Management Strategy for 2023/24.

The report included the most recently available economic background commentary which reflected the position at 22 December 2022.

The Audit Committee, the body charged with reviewing Treasury Management activities and considered the proposed 2023/24 Treasury Management Strategy report at its meeting on 16 January 2023. It was also presented to the Policy Overview and Scrutiny Committee on 26 January 2023. Both the Audit Committee and the Policy Overview and Scrutiny Committee were content to commend the report to Cabinet and Council.

Options/alternatives considered

In order to comply with the CIPFA Code of Practice on Treasury Management, Cabinet has no option other than to consider and approve the content of this report. Therefore, no options/alternatives have been presented.

RESOLVED – That:

1.    Capital Expenditure Estimates as per paragraph 2.1.2; of the report are approved and commended to Council.

2.    The MRP policy and method of calculation as per Appendix 1 of the report are approved and commended to Council.

3.    The Capital Financing Requirement (CFR) Projections as per paragraph 2.2.3 of the report are approved and commended to Council.

4.    The Projected treasury position as at 31 March 2023 as per paragraph  ...  view the full minutes text for item 11.

Consideration was given to a report of the Director of Finance which set out for the Housing Revenue Account (HRA), the detailed budget estimates for 2023/24, the strategic estimates for the four years 2024/25 through to 2027/28 and outturn estimate for 2022/23. The report also set out the recommended dwelling, non-dwelling rents and service and concierge charges to be applied from April 2023.

The report sets out the HRA 2023/24 proposed original budget and the forecast outturn for 2022/23. The opportunity was also taken to present the provisional strategic budgets for 2024/25 through to 2027/28.

HRA activities were a key element of the Council’s Housing Strategy (approved by Council on 10 July 2019) which aimed to provide a diverse Oldham housing offer that was attractive and met the needs of different sections of the population at different stages of their lives.

After taking all relevant issues into account, the projected financial position for 2022/23 was estimated to be a £1.796m positive variance when compared to the original budget forecast for 2022/23 approved at the Budget Council meeting, 2 March 2022.

Of this variance,£0.570m was attributable to a lower than anticipated brought forward balance from 2021/22 with this being offset by £2.366m owing to the cessation of previously planned HRA funded capital schemes. The estimated balance at the end of 2022/23 was projected to be £22.279m.

The closing financial position for 2023/24 showed an estimated HRA closing balance of £20.852m which was sufficient to meet future operational commitments and the potential financial pressures identified in the risk assessment.

The 2023/24 position had been presented after allowing for an increase in dwelling rents of 5%, an increase in non-dwelling rents in line with individual contracts, a nominal increase of 2% on service charges and the setting of Extra Care Housing concierge charges to fully recover costs.

As part of the Autumn Statement, the Government announced plans to cap social housing rents at 7% for 2022/23. Previous policy guidance for the period 2020-2025 was that all rents were to be calculated based on a maximum of the Consumer Prices Index (CPI) rate at September of the preceding year plus 1%. The Department for Levelling Up, Communities

and Housing (DLUHC) had since confirmed that due to the majority of Oldham’s HRA estate being contained within two Private Finance Initiative (PFI) schemes the Council is exempt from the social housing rent cap. Despite this, Oldham Council recognised the impact on tenants that a rent increase of 11.1% would bring. Therefore, Oldham’s projections for the

2023/24 budget had been set assuming rental increases of just 5% which was 6.1% lower than if it were to follow the maximum uplift (September 2021 CPI rate being 10.1% plus 1%).

The Council had opted to propose this reduced rate given the current healthy levels of HRA balances and the on-going pressures, including inflation, on household incomes.

The financial projections for the HRA over the period 2022/23 to 2027/28 showed an overall reduction in the level of balances from  ...  view the full minutes text for item 12.

Consideration was given to a report of the Executive Director, Place and Economic Growth which sought approval of refurbishment works, increased costs and appointment of contractors in relation to the Royton Town Hall and Library buildings.

Royton Town Hall and library were important community buildings with historic value, which had been prioritised for investment to support better use of the space for community use.

Following engagement with the local community, ward members, and local organisations including the Royton Historic Society, this project would ensure the building can be refurbished:

•           to protect and enhance the original features and architecture,

•           to improve accessibility for all users (especially those with physical disabilities),

•           to ensure it is a friendly and welcoming building, and

•           to accommodate more community activities, including a refurbished library and a new customer service area for easier access to council services (place-based service delivery hub).

This report provided an update on the project and the associated costs following the completion of the procurement process within a difficult construction market and ongoing inflationary pressures.

This decision is urgent is due to the preferred bidder holding a fixed price for acceptance until 24th February 2023. Following standard tender review and due diligence procedures, this report sought approval to enter into contract with the preferred bidder and draw down funds from the capital programme to deliver the works.

Options/alternatives considered

Option 1 – Do Nothing: Whilst the project had already started on site with the demolition of the extension buildings, further works would be required to secure the building and make good the rear of the building. These works would still need costing and delivering, but the outcome would be a continued derelict Town Hall building and limited community use in the Library building. The opportunity to renovate both buildings for enhanced community use would be lost.

Option 2 – Approve the appointment of a contractor to proceed with the refurbishment of the buildings, and approve the additional funds required to complete the works as originally intended.  This would strengthen the library offer, provide a new customer service offer in the Library building and would bring the Town Hall building back into community use with enhanced, and disability friendly public facilities.

RESOLVED- That the Cabinet would consider the commercially sensitive information contained at Item 15 of the agenda before making a decision.

That, in accordance with Section 100A(4) of the Local Government Act 1972, the press and public be excluded from the meeting for the following items of business on the grounds that they contain exempt information under paragraph(s) 3 of Part 1 of Schedule 12A of the Act, and it would not, on balance, be in the public interest to disclose the reports.

RESOLVED – That, in accordance with Section 100A(4) of the Local Government Act 1972, the press and public be excluded from the meeting for the following items of business on the grounds that they contain exempt information under paragraphs 3 of Part 1 of Schedule 12A of the Act, and it would not, on balance, be in the public interest to disclose the reports.

Consideration was given to the commercially sensitive information in relation to Item 13 Royton Town Hall.

RESOLVED – That:

1.    The refurbishment works as set out in this report approved.

2.    The increased project cost caused by the national impact of inflation on materials and construction services be noted.

3.    The additional funding needed to deliver the project be approved.

4.    The appointment of the successful contractor following the completion of the tender process be approved.

5.    Approval be given for the contractual, financial and project delivery to be delegated to the Executive Director of Place and Growth in consultation with the Cabinet Member for Finance and Low Carbon.