Search decisions

Consideration was given to a report of the Director of Finance which presented a proposal to increase the Council’s proposed contribution to the pooled budget managed via a Section 75 Funding Agreement which operated between Oldham Council and Oldham Clinical Commissioning Group (CCG). In addition to transferring budgets for existing services into the pooled arrangement, it was proposed to increase the Council’s contribution by £5.9m in 2019/20. This would support the financial resilience plan of the CCG whilst it was undergoing transformation to achieve future efficiencies and in turn support the wider Oldham healthcare economy over the next four financial years. It was anticipated that the investment would be reversed and that the Council would then pay a reduced contribution into the pool between 2021/22 and 2023/24.

The report outlined the issues around the potential allocation of £5.9m of Oldham Council reserves to support the financial recovery plan of Oldham CCG in 2019/20 and support the wider Oldham healthcare economy benefiting all our residents.

The Cabinet were informed that, as the 2019/20 Section 75 Pooled Funding Agreement between the Council and the CCG was currently being reviewed, a revision to the phasing of previously anticipated contributions could be agreed. It was proposed that the use of reserves of £5.9m would increase the Council’s contribution to the pooled budget for the financial year 2019/20, with reduced contributions from 2021/22 to 2023/24. This would allow the Council to put investment into the CCG so that the CCG could initiate work that could

otherwise be delayed at this stage of the integration process. This would support the delivery of longer-term savings and efficiencies across the CCG, the Council and the wider Oldham healthcare economy.

Cabinet noted the CCG would subsequently contribute an additional £5.9m to the pool over the period 2021/22 to 2023/24, thereby enabling the Council to reverse the investments made and replenish reserves. The use of reserves in this way demonstrated the great progress made with regards to integration and how this was of benefit to the people of Oldham.

Options/Alternatives considered:

·       Option 1 – Do nothing.

·       Option 2 – Increase the Council contribution to the pooled fund in 2019/20 by £5.9m to support the CCG, recognising in doing so that the Council must be satisfied that there are clear and demonstrable benefits to the Council Taxpayers of Oldham.

RESOLVED – That the use of £5.9m of Council reserves to provide additional investment supporting transformation to Oldham CCG in 2019/20 be approved.

Consideration was given to a report of the Director of Economy which sought approval to allocate Basic Needs Funding previously identified to facilitate a one form entry (1FE) expansion at Mayfield Primary School of up to £3.3m.

This would enable the replacement of two car parking areas required for the significant increase in staff numbers, an all-weather pitch and the redesign of the Nursery WC, all of which were considered necessary to the scheme.

The Cabinet noted that Mayfield Primary School was located in the St James area of Oldham and was part of the Cranmer Trust. As part of the Basic Needs Programme of Work, Cabinet had given its approval (April 2019) for £2.5m of basic need funding towards a 1FE expansion at Mayfield primary school. This would facilitate the requirement for an increased number of

places in East Oldham to be available and sufficient surplus places would be provided to ensure that an element of parental choice was facilitated.

Initial early costings by the Cranmer Trust’s project design team estimated the work at £2.85m. Since then the design process for the expansion had made good progress. The pre-tender cost estimate was now £3.3m and the Trust had requested confirmation of additional funding to ensure works could continue and the school be able to open by September 2020.

The changes to the early estimate were due to the replacement of two car parking areas required for the significant increase in staff numbers, an all-weather pitch and a requirement to redesign the Nursery WC, all of which were considered necessary to the scheme. The preliminary estimates, risk allowance and design fees had also been adjusted upwards to reflect these additions.

Options/Alternatives considered:

·       Option 1: Approve the revised cost for a 1 FE expansion to Mayfield Primary School. The cost of this expansion circa £3.3 M and could be accommodated from the School’s Capital allocation.

·       Option 2: Do not approve the revised cost of expansion by 1 FE for Mayfield Primary School. This would not fulfil the Local Authority’s statutory obligation to provide the necessary additional places in East Oldham by 2020.

RESOLVED – That:

1.     A funding award of up to £3.3m from the Basic Needs Fund for a 1 FE expansion at Mayfield Academy be approved.

2.     Authority be delegated to the Director of Education and Early Years to develop, consult, procure and arrange for the execution by the Director of Legal Services of any relevant contracts and incidental and ancillary documentation in accordance with the agreed school expansions programme.

Consideration was given to a report of the Director of Finance which requested Cabinet to consider how the funding for Schools and Academies should be distributed in 2020/21, following the Government announcement in October 2019 regarding School Funding for 2020/21.

The report provided a breakdown of the Dedicated Schools Grant (DSG) for 2020/21 and provided information about the National Funding Formula (NFF) for the Schools and High Needs Blocks for Oldham. It also presented a recommended approach for the distribution of the Schools Funding Block of the DSG to Schools and Academies for 2020/21.

A preferred option (Model B) was presented, to move to the 2020/21 NFF cash values in full, except for the Area Cost adjustment where it was proposed that the factor applied in Oldhamwais reduced from 1.00535 to 1.00000. It was also proposed that there was a 0.5% movement of

funding from the Schools Block to the High Needs Block, in order to ensure that the DSG (which is currently in a deficit position) could be managed, so that there was a balanced position over a three-year timeframe (in accordance with the requirements of the Recovery Plan submitted to

the Department for Education (DfE)).

The report highlighted that the continued agreement of the Schools Forum to the proposed 0.5% movement of funds between the Schools and High Needs Blocks was essential. At its meeting of 27 November 2019, the Schools Forum voted to support the 0.5% transfer between blocks, in recognition of the challenging financial position in relation to the High Needs Block and to show a positive movement towards delivering a DSG Recovery Plan.

Options/Alternatives considered:

·         Option 1 – Adopt Model A;

·         Option 2 – Adopt Model B

RESOLVED – That Model B outlined in the report be approved, which was a move to the 2020/21 NFF cash values in full except for the Area Cost Adjustment factor which was reduced to 1.00000, together with a 0.5% transfer of DSG funding between the Schools and the High Needs

Funding Blocks.

The Cabinet considered a report of the Head of Corporate Governance that proposed a refreshed Risk Management Strategy and Framework. They noted that, under the Financial Procedure Rules, Cabinet was responsible for approving any revision in the corporate risk management arrangements of the Council.

The Cabinet was informed that the Council produced a Corporate Risk Management Strategy and Framework, which was subject to regular review.

It was proposed that the existing Risk Management Policy be replaced with two separate documents i.e. Risk Management Strategy and a Risk Management Framework. The proposed Risk Management Strategy was a high-level document that set out the Council’s strategic approach to risk management (Appendix 1). The proposed Risk Management Framework provided the detailed approach to risk management, including the risk matrix and risk appetite tables for measuring the level of risk and ensuring that risks were managed within the Council’s risk appetite (Appendix 2).

The refreshed Risk Management Strategy and Framework was presented for review. Members noted that the matrix was now simpler, with fewer options and clear parameters.

Options/Alternatives considered:

·         Option 1 – Consider and approve the revised Risk Management Strategy and Framework;

·         Option 2 – Consider but not approve the revised Risk Management Strategy and Framework.

RESOLVED – That the refreshed Risk Management Strategy and Framework be approved.

Consideration was given to a report of the Head of Public Protection which informed the Cabinet that a review of the Selective Licensing Scheme had been completed, in line with the legislative requirements. The existing

designation was in the 5th and final year. The report sought permission to carry out a statutory consultation exercise into the future use of Selective Licensing in Oldham, considering the results of the review into the Scheme and its impact.

The Cabinet noted that the Housing Act 2004 gave the power to introduce the licensing of the private rented sector with the aim of improving the management of those properties, to tackle low housing demand or antisocial

behaviour. In 2014 Oldham Council had designated a selective licensing scheme in 8 neighbourhoods which were seen to be exhibiting signs of low housing demand, following a statistical analysis of the whole borough. Low housing demand was where there was a high number of private rented properties, people were moving and only staying for short periods, house prices and rental prices were low, meaning owner occupiers were often in negative equity. This resulted in it being very difficult for a strong community to be developed and maintained in the area.

Members were informed that the current designation was due to expire from the 30th April 2020 and therefore another statistical analysis of the whole borough had recently taken place. This review had indicated some improvements in the neighbourhoods concerned and showed that other neighbourhoods were now exhibiting signs of low housing demand.

On the expiry of the scheme the Council could not just continue the scheme or introduce another, as it was required to carry out the designation process as dictated in the Housing Act. This included obtaining Cabinet approval to consult on the proposed licence conditions and fees, and this consultation needed to take place for a minimum period of 10 weeks. Once the

consultation had concluded, the analysis and findings would be reported back to Cabinet with any subsequent considerations. Approval was sought to commence the consultation exercise, to establish whether another designation of selective licensing of the private rented sector was

needed and in which neighbourhoods.

The Cabinet noted the approach as outlined in the report was part of the Council’s commitment to place-based working and a piece of work was ongoing to establish the preferred model for the deployment of resources, to

enable the strategic approach to wider private sector housing issues across the Borough.

Options/Alternatives considered:

·       Option 1: To note the findings of the review of the existing selective licensing scheme. To approve the consultation of the minimum 10-week statutory consultation required prior to designation of any new scheme. To report back to Cabinet on the outcome of the consultation and any further recommendations relating to any new designation of schemes.

·       Option 2: Not to carry out consultation and allow each of the Selective Licensing designations to close at the expiry date.

RESOLVED – That:

1.     The findings of the review of the existing selective licensing scheme be noted;

2.     The carrying out of the minimum 10-week statutory consultation required prior to any future designation of any new scheme in the neighbourhoods highlighted be approved;

3.     The Cabinet would receive a further report on the outcome of the consultation and any further recommendations relating for any new designation.

4.     The Cabinet would also receive a further report regarding the wider approach to private sector housing enforcement and use of available powers.

The Cabinet gave consideration to a report of the Deputy Chief Executive People and Place which requested approval to revise the level of planned expenditure and investment within the Council’s Capital Strategy and Programme, to support wider regeneration and investment ambitions. This would align to the emerging property strategy review ‘Creating a Better Place’ which aimed to deliver a balance between public sector projects, to meet the needs of the local community, and to support accelerated economic growth and thriving communities across the borough.

The Cabinet noted that Oldham Council was ambitious and bold, and it was on the cusp of an exciting programme of significant change, which was essential to achieve its wider objectives. Corporate land and property assets were critical to this agenda and therefore the previously approved Medium-Term Property Strategy (MTPS) had been reviewed as it needed to meet the scale of the change required.

Members were informed that this report set the framework for the Council’s regeneration ambitions and there was much more to follow in the New Year.

At a strategic level, the review had confirmed that the property portfolio could be a catalyst for building new homes, creating job opportunities, re-skilling residents through new apprenticeship opportunities, and re-engaging communities and partners through property/estate co-location and collaboration.

New core areas of focus had been identified for property services through the MTPS, which incorporated key priority projects: Investments (direct and indirectly into property), Housing, Regeneration (especially the Town Centre) and the Corporate Estate.

This required changes to be made to the governance arrangements, and service delivery structures to ensure the right resources were in place for effective and enhanced delivery across this programme.

Options/Alternatives considered:

·       Option 1 - Do not agree the proposals

·       Option 2 - Agree the proposals

RESOLVED – That the Cabinet would consider the commercially sensitive information contained at Item 19 of the agenda before making a decision.

Consideration was given to a report of the Director of Finance and Director of Economy, which sought approval for the updated Commercial Property Investment Strategy and to continue an Investment Fund to facilitate development of a robust, property and alternative investment portfolio in order to generate a sustainable future income stream to support the Council’s mainstream service delivery.

The Cabinet was informed that the Council continued to be faced with an unprecedented financial challenge, with uncertainty around funding arrangements. This proposal, to revise the Commercial Property Investment Strategy (CPIS) and continue the Investment Fund, presented an opportunity to reduce this pressure by increasing revenue income to support the Council’s budget, by way of additional income streams from the acquisition of new investment property assets and alternative investments.

Members noted that the Chartered Institute of Public Finance and Accountancy (CIPFA) had recognised that commercial investment was an option for Local Authorities for future financial sustainability and had revised their Prudential Code of Practice in 2018 to take into account these new initiatives.

CIPFA had also recently issued a document entitled “Prudential Property Investment” which provided guidance on the provisions in the Prudential Code that related to the acquisition of property intended to make investment returns. It clarified a range of issues including changes to statutory guidance. The CPIS had been prepared having regard to the revised Prudential Code and the most recent CIPFA guidance.

The Cabinet was informed that there were a number of ways in which the Council could deliver elements of the Commercial Property Investment Strategy, whether in-house, via a property vehicle company or through arm’s length investment in a property fund. Since the adoption of the CPIS in 2017, management of the property estate had remained in-house and this was planned to continue in the short term, although the strategy allowed for external professional advisors to be engaged.

It was recommended that specialist professional advice was secured as and when required. In addition, as it was possible that some of the acquisitions may be out of borough, geographically use of external resource including on-going property management, may be more appropriate. Any acquisition costs including specialist fees would be included within the business case.

Options/Alternatives considered:

·       Option 1 - Do not agree the Strategy and reallocate funds within the Capital Programme.

·       Option 2 - Agree the Strategy and continuation and increase of the fund.

RESOLVED – That the Cabinet would consider the commercially sensitive information contained at Item 18 of the agenda before making a decision.

Consideration was given to a report of the Director of Finance which presented to Cabinet the Council Tax Tax Base and provisional Non-

Domestic Rates (NDR) Tax Base forecast for 2020/21, which would underpin the forthcoming Council Budget and Medium-Term Financial Strategy scheduled for consideration at Budget Council on 26 February 2020.

The report also sought delegated authority to finalise the 2020/21 Non-Domestic Rates (Business Rates) forecast in order to reflect the information contained in the Local Government Finance Settlement for 2020/21 and up to date Non-Domestic Rates details, to be submitted to Central Government via the annual NNDR 1 return by the statutory deadline of 31 January 2020.

Additional approval was sought approval to delegate the final decision to join the pooling of Business Rates in 2020/21 with other Greater Manchester Districts, Cheshire East & Cheshire West and Chester Councils. Oldham had pooled Business Rates with neighbouring Authorities since 2015/16. The receipt of the Provisional Local Government Finance Settlement marked the start of a 28-day period for confirming Oldham’s membership within the 2020/21 Business Rates Pool and the timing might not align with future Cabinet meetings.

Members were asked to note that the General Election of 12 December 2019 had affected the timetable for budget setting and related activities across all billing and precepting authorities. Delays to the publication of information such as the Provisional Local Government Finance Settlement might impact on billing authorities’ ability to submit government returns (such as the NNDR 1) and notify preceptors of tax base information on or before normal statutory deadlines. This, in turn, might impact on the timetable for scrutinising and considering budget reports at Committees and meetings leading up to Budget Council planned for 26 February 2020.

Cabinet noted the report set out information on the Council Tax Tax Base for 2020/21 using the most up to date valuation list and all other information and estimates available.

The total number of chargeable properties included in the Council Tax Tax Base calculation in Oldham for 2020/21 was 95,071. This figure was reduced to 86,290.25 after allowing for discounts and exemptions and translated to the equivalent of 68,454 Band D properties. After applying adjustments for the Local Council Tax Support scheme offset by the additional charging for empty properties and an anticipated increase in the number of properties to be included in the valuation list over the forthcoming year, the number of Band D equivalent properties reduced to 59,446. The final Tax Base after the application of the anticipated collection rate of 97% was 57,663 which was an increase of 970 over the Council Tax Tax Base for 2019/20 of 56,693.

The 2020/21 Tax Bases for Saddleworth and Shaw and Crompton Parish Councils of 8,707 and 5,494 respectively, had been calculated using the same

methodology.

Members were reminded that statute required local billing authorities to prepare and submit to the Ministry of Housing, Communities and Local Government (MHCLG) a locally determined and approved Business Rates forecast through the NNDR 1 return by 31 January each year. This forecast would be used to determine the 2020/21 “demand” and payment schedule for Business Rates between Oldham Council and the Greater Manchester Combined Authority. Being a participant in the Greater Manchester 100% Rates Retention Pilot Scheme (now extended by at least a further year until 31 March 2021) meant the Council no longer paid a share of Business Rates to Central Government. Instead, Oldham currently retained 99% of the income with 1% being paid to the Greater Manchester Combined Authority for Fire and Rescue services.

The estimated rating income for 2020/21 attributable to Oldham Council was currently £50.547m. Delegation was sought to enable the Business Rates forecast to be updated to take account of the 2020/21 Local Government Finance Settlement and up to date Non-Domestic Rates information, enabling the submission to Central Government of the annual NNDR 1 return by the statutory deadline of 31 January 2020 to Central Government.

Members noted that Oldham had pooled Business Rates revenues with other

Greater Manchester districts and the two Cheshire Unitary Authorities since

2015/16 (Cheshire West & Chester joined the pool from 2016/17). The aim of

pooling was to retain the benefits of any Business Rates growth within Greater Manchester for the benefit of the region. This report sought approval to continue these arrangements into 2020/21 (subject to the notification of the 2020/21 Local Government Finance Settlement).

Cabinet noted that traditionally, the Chancellor of the Exchequer delivered an autumn budget statement, which had been used to announce policy changes

to the business rates system and Members had been provided with updates on those changes within previous tax base reports. However, due to the calling of the General Election for 12^th December 2019, the Chancellor cancelled his autumn budget statement, meaning no national policy changes to the business rates system for 2020/21 had been proposed.

Significant changes were proposed for the Retained Business Rates system from 1 April 2021. Changes included:

•       A move to 75% rates retention nationally (increased from 50%) and the likely ending of the Greater Manchester 100% rates retention pilot scheme;

•       The resetting of business rates baselines which could see locally retained growth fully or partially taken away from individual local authorities and redistributed through the funding formula;

•       The implementation of recommendations from the fair funding review which could also impact on business rates baselines and the calculation of tariff payments and top up grants (designed to equalise the difference between an authority’s need for business rates revenue compared to what could be generated from local ratepayers);

•       The revaluation of Business Rates leading to the national adjustment of rateable values and multipliers.

Options/Alternatives considered:

·       Option 1 - The Council had little discretion in the calculation of the number of properties incorporated into the Council Tax Tax Base given the legislative framework that was in place. However, there was some discretion over-estimating the number of new properties that would be included on the Council Tax register during 2020/21. A prudent view had been taken in this regard. The main area for an alternative approach was over the level of assumed collection rate. An increase in the collection rate would boost the anticipated Council Tax income and a decrease in the rate would decrease income. The Council had chosen to maintain its 2019/20 collection rate at 97%. This decision had been influenced by a continuing and targeted focus on Council Tax collection rates.

·       Option 2 - The NNDR1 return generated the figures upon which the Business Rates Tax Base was prepared. It was not therefore appropriate to consider an alternative approach. However, as the figures included on the NNDR1 return on 31 January 2020 may vary from the estimated level, delegation was sought to allow the opportunity to revise the Business Rates forecast and approve a revised and more accurate position for budget setting.

RESOLVED – That:

1.     the following be approved:

a)    The Council Tax Tax Base for 2020/21 at 57,663 Band D equivalent properties.

b)    The latest estimate for 2020/21 Business Rates revenue that is

attributable to Oldham Council as being £50.547m.

2.     Cabinet noted the Tax Bases for Saddleworth and Shaw and Crompton

Parish Councils of 8,707 and 5,494 respectively.

3.     The decision to vary the final Business Rates forecast and hence the Business Rates Tax Base, be delegated if required, to the Deputy Leader and Cabinet Member for Finance and Corporate Services, in consultation with the Director of Finance.

4.     The final decision of the Council’s membership of the proposed Greater Manchester, Cheshire East & Cheshire West and Chester Councils Business Rates Pool or 2020/21 (subject to the information contained in the 2020/21 Local Government Finance Settlement) be delegated to the Deputy Leader and Cabinet Member for Finance and Corporate Services in consultation with the Director of Finance.

The Cabinet gave consideration to a report of the Director of Finance which set out the Council’s strategy for income generation for the next medium-term financial planning period (2020/21 to 2024/25).

The Cabinet were informed that the proposed Income Strategy set out in Appendix 1 of the report covered all material sources of revenue that financed day to day service provision including:

•         Government Grants;

•         Council Tax;

•         Business Rates;

•         Fees, charges and other contributions.

The Strategy also considered:

•     Investment opportunities;

•     Opportunities relating to traded services and other chargeable activities;

•     The process for setting charges and collection efficiency.

Members noted that the Council’s current Income Strategy covering the period 2018/19 to 2021/22 was approved by Cabinet on 18 September 2017. The impact of the recently published one-year spending round by HM Treasury together with the approval of key strategies covering housing, capital investment, property and commercial investment meant it had been

necessary to refresh the Strategy. The Strategy had been developed with regard to the latest Chartered Institute of Public Finance and Accountancy (CIPFA) guidance covering income generation and had also been rolled forward to cover the next financial planning period of 2020/21 to 2024/25.

Options/Alternatives considered:

·         Option 1 – Approve the Income Strategy for Oldham Council for the period 2020/21 to 2024/25;

·         Option 2 – Do not approve the Income Strategy for Oldham Council for the period 2020/21 to 2024/25 and suggest an alternative approach

RESOLVED – That the Income Strategy included at Appendix 1 of the report be approved.