Agenda and draft minutes

An apology for absence was received from Councillor Barnes.

Councillor Harrison declared a personal interest in Minute no.10 (BRI 612 Young Peoples Substance Misuse and Sexual Health Service) insofar as she was involved with the work of a particular company.

There were no items of urgent business received.

To present an update on the Council’s 2022/23 forecast revenue budget position and the financial position of the capital programme as at 30^th November 2022 (Month 8), together with the revised capital programme 2022/23 to 2026/27.

Consideration was given to a report of the Director of Finance 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 2026/27, as outlined in section two of the report at Annex 2.

The Cabinet Member for Finance and Low Carbon and the Director of Finance presented the report and addressed enquiries of the Committee.

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

The position includes additional costs and pressures that have been identified by the Authority in this financial year as a result of the lasting impact of the COVID-19 pandemic. There are currently two areas which continue to endure significant pressures attributed to the on-going impact of the pandemic; Community Health and Adult Social Care is reporting an adverse variance of £5.717m and Children’s Social Care is recording £3.477m. These pressures are 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 is being used to reduce the operational pressure. This will 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 is detailed within Annex 1, Section 2.

The forecast pressure of £2.233m at Month 8 is a £2.219m reduction in the adverse position of £4.452m reported at quarter 2 and forecasts the impact of, as previously reported, the management actions that have been strengthened across all service areas to review and challenge planned expenditure, control recruitment and to maximise income. It is therefore anticipated that by the year end, the outturn deficit position should reduce further and that this will be demonstrated in the update 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 is also outlined in the report.

Against a generally improving position, the DSG is now forecasting an in-year surplus of £3.287m (£3.215m at quarter 2), which has reversed the deficit brought forward leaving a forecast year end surplus of £0.514m (£0.442m at quarter 2). Action will 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  ...  view the full minutes text for item 5.

To present 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.

Consideration was given to a report of the Director of Finance which sets 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 sets 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 is also taken to present the provisional strategic budgets for 2024/25 through to 2027/28. HRA activities are a key element of the Council’s Housing Strategy (approved by Council on 10 July 2019) which aims 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 2022/23 is 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 is 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 is projected to be £22.279m.

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

The 2023/24 position has 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.

In response to a question relating to the use of some of the Reserves to create more social housing. The Director of Finance informed Members that there is a contribution to the capital scheme which is included which is a little reduced from what was initially planned. The report does outline some initiatives which would include more social housing. One of these initiatives is to roll out the empty homes scheme where a pilot model scheme working with Homes England has been successful and the Council would be looking to expand that model with Homes England where matched funding would be required from the HRA reserves.

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 Price Index (CPI) rate at September of the preceding year plus 1%. The Department for Levelling Up, Communities and Housing (DLUHC) has 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  ...  view the full minutes text for item 6.

To present the Council’s Revenue Budget for 2023/24, the budget reduction requirement and the Administration’s budget proposals for 2023/24 including Council Tax intentions. The report also provides a forecast of the 2024/25 position and the financial forecasts for the remainder of the MTFS period, 2025/26, 2026/27 and 2027/28.

Consideration was given to a report of the Director of Finance which provide the Policy Overview and Scrutiny Committee 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 presents the financial forecasts for the remainder of the Medium Term Financial Strategy (MTFS) period 2025/26, 2026/27 and 2027/28.

This report presents the Council’s Revenue Budget for 2023/24 together with the budget reduction requirement and the Administration’s budget proposals for 2023/24 including Council Tax intentions. It also provides a forecast of the 2024/25 position and the financial forecasts for the remainder of the MTFS period, 2025/26, 2026/27 and 2027/28. This report updates the financial position presented to Cabinet on 12 December 2022 using information from the PLGFS published on 19 December 2022 and the month 8 financial monitoring forecasts.

Having regard to the proposed increase in Council Tax, Section 17 presents the Administration’s approach to balancing the budget for 2023/24 via the budget reduction process. There are a total of 45 proposals presented in accordance with Political Portfolios. These are expected to deliver savings totalling £16.313m and have an FTE impact of 7 in 2023/24. The proposals also have an impact on 2024/25 of £7.575m (and a further £1.135m in 2025/26). All the proposals are presented in summary at Appendix 5 and in detail at Appendix 6 to the report.

Assuming approval of the 2023/24 budget reduction proposals and taking into account the impact of one-off budget reduction proposals, the budget reduction requirement for 2023/24 reduces to £12.963m and 2024/25 to £10.670m.

The Committee examined the budget reduction proposals.

The Leader of the Council and Cabinet Member for Regeneration and Housing and The Director of Finance were in attendance to introduce the following proposals:

COR-BR1-610 Resource review of Research and Engagement

COR-BR1-611 Realignment of Executive Assistants

PEG-BR1-606 Capitalisation of Transport officers

PEG-BR1-607 Increase capitalisation of staff time on regeneration projects

The Leader and Cabinet Member for Finance and Low Carbon were in attendance to introduce the following proposals:

COR-BR1-629 Reprofiling of the Minimum Revenue Position

COR-BR1-630 Service Inflation

COR-BR1-631 Finance Service Restructure

COR-BR1-632 Implementation auto processing/artificial intelligence

COR-BR1-633 PFI Insurance rebate/reduction in professional fees

COR-BR1-644 Improvement in the approach to Council Tax administration

                        and Council Tax Collection

COR-BR1-634 Procurement – Reduction in non-pay budgets

With regard to a question for clarification on Council Tax outstanding as at end of 2023, Members were informed that there was an expectancy to collect 94 per cent with approximately £7m in arrears with every effort being made to collect the maximum income and external enforcement are utilised in this regard. Members noted that although collection agencies were much more professional in their work they are closely monitored where collection methods are concerned with any complaints being dealt with immediately.

The Leader of the Council and Cabinet Member for Culture and Leisure were in attendance to introduce the following  ...  view the full minutes text for item 7.

To present the proposed Council Tax Reduction Scheme for 2023/24 for scrutiny prior to its consideration by Cabinet and recommendation to full Council on 1^st March 2023

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

Members will recall that 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 requires 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 is set by the Government and cannot be changed. The Committee will need to consider whether it is appropriate to change the CTR scheme and as a consequence undertake a major consultation, which would be very time constrained. 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 expects LocalAuthorities 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 will 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.

A major consultation exercise undertaken at this point would risk deflecting attention from the successful delivery of other initiatives. Furthermore, the full roll out of Universal Credit (UC) is not yet completed and this adds further uncertainty when assessing the likely impact of changes to CTR relief. The Government has recently delayed the full UC roll out to 2028, but as Oldham was a pilot Authority for the scheme, the movement to the new regime within the borough is more advanced than many other areas.

 Options considered in this report are leaving the scheme unchanged, increasing the maximum relief by 2.5% and reducing maximum relief by 2.5%. A 2.5% change in the relief impacts the overall Council tax collected by some £0.356m but has a marginal impact upon CTR claimants (increasing/reducing the benefit per resident by £0.68 per week).

 In view of the continued  ...  view the full minutes text for item 8.

To 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.

Consideration was given to a report of the Director of Finance which sets 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 are set over a five year timeframe. The proposed Capital Strategy and programme for 2023/24 to 2027/28 takes the essential elements of the 2022/23 to 2026/27 and previous years’ strategies and programmes and moves them forward in the context of the financial and political environment for 2023/24. The Strategy does however include a longer-term vision, a forward look at those projects that are likely to run beyond the five year strategy and programme period or be initiated subsequently. This covers a timeframe for the 10 years from 2028/29 to 2037/38. The format of the Capital Strategy reflects the requirements of the latest Prudential and Treasury Management Codes issued by the Chartered Institute of Public Finance and Accountancy (CIPFA). The strategy therefore presents:

• 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 is presented at Appendix 1. It is prepared in 15 sections and ensures that Members are presented with the overall long-term capital investment policy objectives and resulting Capital Strategy requirements, governance procedures and risk appetite. The sections are:

1. 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. Supporting Greater Manchester Devolution and Accessing Levelling Up,

    UK Shared Prosperity Fund (UKSPF) and Decarbonisation Resources

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

 6. Knowledge and Skills

 7. Treasury Management

 8.  Long Term Loans

 9.  Other Non-Treasury Investments

10. Capital Resources to Support Capital Expenditure

11. Capital Investment and Disposal Appraisal

12. The Prioritisation of Capital Requirements

13. The Procurement of Capital Projects

14. The Measurement of the Performance of the Capital Programme

15. The Capital Investment Programme Board (CIPB)

The Strategy is aligned with the Creating a Better Place programme which is 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 incorporates the Medium-Term Property Strategy and Housing Strategy and aims 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 highlights the aims of the Capital Strategy and its links to  ...  view the full minutes text for item 9.

Including the Minimum Revenue Provision Policy Statement, Annual Investment Strategy and Prudential Indicators

Consideration was given to a report of the Director of Finance which present to Policy Overview and Scrutiny Committee, 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 outlines 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 is 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 are affordable, prudent and sustainable. It is 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 requires 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 outlines the implications and key factors in relation to each of the above Capital and Treasury Management issues and makes recommendations with regard to the Treasury Management Strategy for 2023/24.

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

The Treasury Management Strategy was considered by the Audit Committee on 16 January 2023 as it is the body charged with reviewing Treasury Management reports and making recommendations to the responsible body (i.e., Council). The Audit Committee was content to recommend the report to Cabinet and Council for approval.

The proposed Treasury Management Strategy is presented to the Policy Overview and Scrutiny Committee to enable scrutiny of the report so that any comments may be incorporated into the report before it is considered by Cabinet on 13 February 2023 and Council on 1 March 2023.

RESOLVED that the following be accepted and commended to Cabinet

1. Capital Expenditure Estimates as per paragraph 2.1.2;

2. MRP policy and method of calculation as per Appendix 1;

3. Capital Financing Requirement (CFR) Projections as per paragraph 2.2.3; 4. Projected treasury position as at 31 March 2023 as per paragraph 2.4.3;

5. Treasury Limits as per section 2.5;

6. Borrowing Strategy for 2023/24 as per section 2.7;

7. Annual Investment Strategy as per section 2.11  ...  view the full minutes text for item 10.