Agenda and draft minutes

There were no apologies for absence received.

There were no public questions for this meeting of the Cabinet ot consider.

The Minutes of the meeting of the Cabinet held on 22^nd January 2024 are attached for approval.

Resolved:

That the Minutes of the meeting of the Cabinet held on 22^nd January 2024, be approved as a correct record.

To be circulated

The Cabinet considered the draft minutes of the Governance, Strategy and Resources Scrutiny Board, held on 25^th January 2024. It was noted that the Scrutiny Board, in terms of the report relating to the Revenue Budget 2024/25 and 2025/26 and the Medium-Term Financial Strategy 2025/26 through to 2028/29, was asking that Council approve the recommendations contained in the Director of Finance’s report.

Resolved:

That the deliberations and comments of the Governance, Strategy and Resources Scrutiny Board, held on 25^th January 2024 be noted.

To be circulated

Consideration was given to the Draft Minutes of the Governance, Strategy and Resources Scrutiny Board’s meeting held on 8^th February 2024, of the proposed Opposition budgets as presented by the Liberal Democrat and Conservative groups.

The Governance, Strategy and Resources Scrutiny Board had recommended that the Cabinet review the following three budget reduction proposals that had been submitted by the Liberal Democrat Group and to reject the Conservative proposals:

a.    OPP-BR1-201 – Reconstruction of Council priorities with regards to the communications and Research Service (£0.365m).

b.    OPP-BR1-202 – Reduction in mileage budgets to reflect change in work practices (£0.055m)

c.    OPP-BR1-204 – review of car allowances to reduce the amount paid as a lump sum to staff doing zero or minimal mileage.

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

Resolved:

1. That the deliberations and comments of the Governance, Strategy and Resources Scrutiny Board’s meeting held on 8^th February 2024, be noted.
2. That the alternative budget proposals presented by the Liberal Democrats and Conservatives Groups be not accepted.

A report that provides an update on the Council’s 2023/24 forecast revenue budget position at Annex 1 and the financial position of the capital programme as at 30 November 2023 (Month 8) together with the revised capital programme 2023/24 to 2027/28.

The Cabinet considered a report of the Director of Finance which provided members with an update on the Council’s 2023/24 forecast revenue budget position, at Annex 1 and the financial position of the capital programme as at 30^th November 2023 (Month 8) together with the revised capital programme 2023/24 to 2027/28, as outlined in section two of the report at Annex 2.

The report advised that the forecast outturn position for 2023/24 was a projected adverse variance of £16.194m after allowing for approved and pending transfers to and from reserves. There are significant variances contained within the projected net overspend within three areas forecasting pressures:

• Children’s Services is forecasting a pressure of £13.386m;

• Place and Economic Growth is forecasting a pressure of £5.312m; and

• Community Health and Adult Social Care is forecasting a pressure of £0.815m.

These pressures will continue to be closely monitored for the remainder of the financial year with action taken to address variances and mitigating action to be taken as appropriate and as detailed in the submitted report. Favourable variances across the remaining portfolios totalling £3.318m were offsetting these pressures in these three areas.

The forecast pressure of £16.194m at Month 8 was an increase of £1.605m on the adverse position of £14.589m reported at quarter 2. Management actions that have been approved to review and challenge planned expenditure, control recruitment and to maximise income would hopefully have an impact on the anticipated the outturn deficit position. This should be demonstrated in the update report that 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 were also outlined in the submitted report.

As reported to previous Cabinet meetings, the position on the DSG continued to improve and as at month 8 it was forecasting an in-year surplus of £2.117m, with an estimate that the year-end position will be a surplus of £3.561m. Action will continue to be taken with the aim of mitigating cost pressures and delivering and maintaining a surplus position. To assist, Oldham is taking part in the Department for Education sponsored Delivering Better Value in SEND (Special Educational Needs and Disabilities) which will provide dedicated support for the SEND Review reforms to 55 Local Authorities with historical DSG deficit issues with the aim of putting the DSG of participating Authorities on a more financially sustainable footing There was currently no significant issues of concern in relation to the HRA. The Collection Fund was forecasting an in-year surplus of £0.805m. The Collection Fund was reported as being particularly volatile, whilst currently in surplus the position would continue to be closely monitored throughout the year as any surplus or deficit at the end of the financial year would have a direct budgetary impact in 2024/25.

The report outlined the most up to date capital spending position for 2023/24 to 2027/28 for approved schemes. The revised capital programme budget for 2023/24 is £78.633m  ...  view the full minutes text for item 8.

A report that provides details of the budget reduction requirement and the Administration’s budget proposals for 2024/25 and a forecast of the 2025/26 position having regard to the Provisional Local Government Finance Settlement. The report also presents the financial forecasts for the remainder of the Medium-Term Financial Strategy period 2025/26 to 2028/29.

The Cabinet considered a report of the Director of Finance which provided members with the budget reduction requirement and the Administration’s budget proposals for 2024/25 and a forecast of the 2025/26 position having regard to the Provisional Local Government Finance Settlement (PLGFS) published on 18 December 2023. The report also presents the financial forecasts for the remainder of the Medium-Term Financial Strategy (MTFS) period 2025/26 to 2028/29.

The submitted presented the Council’s Revenue Budget for 2024/25 together with the budget reduction requirement and the Administration’s budget proposals for 2024/25 including Council Tax intentions. It also provides a forecast of the 2025/26 position and the financial forecasts for the remainder of the MTFS period, 2026/27 to 2028/29. A version of the Revenue Budget 2024/25 and 2025/26 and Medium Term Financial Strategy 2024/25 to 2028/29 had been presented to the Governance, Strategy and Resources Scrutiny Board’s meeting on 25^th January 2024. The Board scrutinised the report and the other reports on the agenda that formed a core part of the Council’s strategic financial planning framework.

Section 1 presented an introduction to the report and explained the report format. Section 2 sets out 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 of the report presented Local Government Finance developments which have an impact on 2024/25 and future years budgets. It also highlighted the Chartered Institute of Public Finance and Accountancy (CIPFA) Financial Resilience Index, the CIPFA Financial Management Code.

Section 4 presented the Local Government Finance Policy Statement 2024 to 2025 which set out the Government’s intentions to assist financial planning for Councils. It also detailed the impact of the 2024/25 PLGFS which had been the sixth consecutive one-year Settlement. This included key information in relation to overall funding levels, Council Tax referendum limits and grants for 2024/25.

Section 5 presented the 2023/24 revised budget and year end forecasts. The 2023/24 revenue budget forecast outturn position (detailed at Table 5 in the report) highlighted a current unfavourable projected variance of £16.2m; which would need to be financed from reserves. This represented an addition to the general contribution from reserves of £9.5m approved by Council in March 2023, plus contributions from other earmarked reserves for specific projects/initiatives of some £7m. This meant that the total contribution from reserves in 2023/24 would be in the order of £34m: a situation that was not sustainable and which had significantly reduced the financial resilience of the council.

Section 6 of the report presented a range of expenditure pressures that contributed to the budget gap. In total they contribute £28.7m, an increase of £13.9m compared to the forecast presented to Full Council on 1st March 2023. The expenditure pressures for 2025/26 were projected at a further £23m. The main pressures arise from pay, expenditure on Council buildings, increased demand and prices for Children’s Social Care service provision and an increased demand for temporary accommodation.

Section 7  ...  view the full minutes text for item 9.

A report that sets out the Capital Strategy for 2024/25 to 2028/29 and thereby the proposed 2024/25 capital programme, including identified capital investment priorities, together with the indicative capital programme for 2025/26 to 2028/29.

The Cabinet considered a report of the Director of Finance which set out the Capital Strategy for 2024/25 to 2028/29 and thereby the proposed 2024/25 capital programme, including identified capital investment priorities, together with the indicative capital programme for 2025/26 to 2028/29, having regard to the resources available over the life of the programme.

The report set out the Council’s Capital Strategy and capital programme over a five-year timeframe. The proposed Capital Strategy and programme for 2024/25 to 2028/29 took the essential elements of the 2023/24 to 2027/28 and previous years’ strategies and programmes and moved them forward in the context of the financial and political environment for 2024/25. The Strategy did include 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 2029/30 to 2038/39.

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

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

b.    An overview of how the associated risk is managed.

c.    The implications for future financial sustainability.

The Capital Strategy was presented at Appendix 1, to the report. It was prepared in 14 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 sections were:

1. The aims of the Capital Strategy and its links to the Council’s Corporate Plan and the Oldham Plan (Our Future Oldham), Creating a Better Place (CaBP) Programme, Medium Term Property Strategy (MTPS), Housing Strategy (HS) and Budget and Policy Framework

2. The Principles of the Capital Strategy

3. Priority Areas for Investment

4. Affordability, Delivery and Risk Associated with the Capital Strategy

5. Knowledge and Skills

6. Treasury Management

7. Long Term Loans

8. Other Non-Treasury Investments

9. Capital Resources to Support Capital Expenditure

10. Capital Investment and Disposal Appraisal

11. The Prioritisation of Capital Requirements

12. The Procurement of Capital Projects

13. The Measurement of the Performance of the Capital Programme

14. The Capital Investment Programme Board (CIPB).

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 and ensuring Oldham is a great place to visit with lots of family friendly and accessible places to go. This also incorporated the Medium-Term Property Strategy and Housing Strategy, aiming 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  ...  view the full minutes text for item 10.

A report that outlines the Treasury Management Strategy for 2024/25, the Annual Investment Strategy, Borrowing Strategy and Prudential Indicators.

The Cabinet considered a report of the Director of Finance that presented the Treasury Management Strategy for 2024/25.

The report outlined the Treasury Management Strategy for 2024/25, the Annual Investment Strategy, Borrowing Strategy and Prudential Indicators. The Council was required through regulations supporting the Local Government Act 2003 to ‘have regard to’ the Prudential Code. It is 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 2024/25 Treasury Management Strategy for 2024/25 covered:

a.    Economic Update.

b.    Prospects for Interest Rates.

c.    The Current Balance Sheet and Treasury Position.

d.    Liability Benchmark.

e.    The Borrowing Strategy.

f.     Debt Rescheduling.

g.    The Borrowing Strategy.

h.    The Investment Strategy.

i.      Approved Counterparties, risk management and Investment Limits.

j.      Treasury Indicators which limit the treasury risk and activities of the Council

The submitted report outlined the implications and key factors in relation to each of the above Capital and Treasury Management issues and makes recommendations regarding the Treasury Management Strategy for 2024/25.

The report included the most recently available economic background commentary which reflected the position in December 2023. The proposed Treasury Management Strategy had previously been presented to the Audit Committee on 15^th January 2024 and to the Governance, Strategy and Resources Scrutiny Board on 25^th January 2024, to enable scrutiny of the report before it’s further consideration, by this Cabinet meeting as part of the budget setting cycle. Any comments from Cabinet Members would be incorporated into the report that will be presented to Council on 28^th February 2024.

Options/Alternatives considered:

In order to comply with the CIPFA Code of Practice on Treasury Management, the Council had no option other than to consider and approve the content of the report. Therefore, no options/alternatives were presented.

Resolved:

The Cabinet commends the following to Council:

1.    The Capital Financing Requirement (CFR) Projections, as detailed at paragraph 2.4.1 of the submitted report.

2.    The Projected Balance Sheet position, as at 31^st March 2024 and future years, as detailed at paragraph 2.4.1 of the report.

3.    The Liability Benchmark, as detailed at Section 2.5 4, of the submitted report.

4.    The Borrowing Strategy for 2024/25, as detailed at Section 2.6 of the submitted report.

5.    The Annual Investment Strategy, as detailed at Section 2.7, of the report (including counterparties and treasury limits).

6.    The Treasury Management Prudential Indicators, as detailed at Section 2.8, of the submitted report.

A report which sets out for the Housing Revenue Account (HRA), the detailed budget estimates for 2024/25, the strategic estimates for the four years 2025/26 through to 2028/29 and outturn estimate for 2023/24.

The Cabinet considered a report of the Director of Finance that set out, for the Housing Revenue Account (HRA), the detailed budget estimates for 2024/25, the strategic estimates for the four years 2025/26 through to 2028/29 and the outturn estimate for 2023/24. The report also sets out the recommended dwelling, non-dwelling rents and service and concierge charges to be applied from April 2024.

The Director of Finance’s report set out the HRA 2024/25, the proposed original budget and the forecast outturn for 2023/24. The opportunity was also taken to present the provisional strategic budgets for 2025/26 through to 2028/29. 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 is attractive and meets 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 2023/24 was estimated to be a £0.032m favourable variance when compared to the original budget forecast for 2023/24 approved at the Budget Council meeting on 1^st March 2023. Of this variance, £0.273m is due to higher utility costs and increased unitary charges. This adverse variance is offset by £0.305m higher than anticipated brought forward balances from 2022/23.

The estimated balance at the end of 2023/24 was projected to be £20.884m. The closing financial position for 2024/25 shows an estimated HRA closing balance of £19.571m which is sufficient to meet future operational commitments and the potential financial pressures identified in the risk assessment.

The 2024/25 position has been presented after allowing for a proposed increase in dwelling rents of 7.7%, 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.

The majority of HRA tenants are either the recipient of Housing Benefit or Universal Credit, meaning that part or all of the increase will be covered by tenant’s benefits. Coupled with the recent increase in the Local Housing Allowance, it is assumed that the proposed increase in rents will not represent an unmanageable additional financial burden to tenants. For the Council to finance the construction of any new build social housing through the HRA, it is essential that increased costs are covered by rent increases so that the HRA can remain financially sustainable.

The financial projections for the HRA over the period 2023/24 to 2028/29 show an overall reduction in the level of balances from £22.584m at the start of 2023/24 to £16.872m at the end of 2028/29. The HRA detailed budget for 2024/25 and strategic estimates for the four years 2025/26 to 2028/29 and the outturn estimate for 2023/24 were presented to the Governance, Strategy and Resources Scrutiny Board on 26 January 2024. The Committee was content to commend the report to Cabinet without amendment.

Options/alternatives considered:

The report advised that for the Council to comply with legislative requirements, it must  ...  view the full minutes text for item 12.