Agenda and minutes

Agenda and minutes

Speaking at a Council or Committee meeting

Venue: Plowman Room - Oxford Town Hall. View directions

Contact: Andrew Brown, Scrutiny Officer 

Items
No. Item

57.

Apologies

Substitutes are not allowed.

Minutes:

None.

58.

Declarations of interest

Minutes:

None.

59.

The implications of Brexit pdf icon PDF 930 KB

 

Background Information

The Finance Panel has asked to monitor the impacts of Brexit on the Council’s finances and the wider economy.  Previous reports were considered by the Panel in September 2016 and March 2017.

Why is it on the agenda?

For the Panel to consider the impacts of the UK’s decision to leave the European Union by monitoring a set of financial indicators on the Council’s finances and the wider city economy.

Who has been invited to comment?

·         Nigel Kennedy, Head of Financial Services

 

 

Minutes:

The Head of Financial Services introduced the report.   He said that national shifts in inflation, which was rising, and general economic growth, which had slowed in the first half of 2017, were yet to feed through to the Oxford economy in a tangible way.  Business Rates income was holding up, units in the new Westgate Shopping Centre were being let and there had been no significant increase in bankruptcies.  BMW had recently announced that the next generation Mini would be produced in Cowley, which was good news for the local economy.

 

The London School of Economics (LSE) has assessed the expected impacts of a ‘hard’ and ‘soft’ Brexit on the Gross Value Added (GVA) of UK cities over the next ten years.  The LSE predicted that there will be a negative impact across the board but Oxford was expected to be among the least adversely affected UK cities in the South of England, with GVA impacted by -1% (soft Brexit) to -2% (hard Brexit) over the period.  This analysis was based on assumptions about increases in trade costs and did not factor in the effects of Brexit on innovation, foreign investment and migration flows, or how cities would respond to changes linked to Brexit.   The LSE therefore expected that their analysis would underestimate the economic impacts of Brexit.

 

In terms of interest rates, the Bank of England’s base rate remained at a historic low of 0.25% and was not expected to be increased until 2019.  This had the effect of supressing investment returns.   It also meant that borrowing rates available through the Public Works Loan Board were very low.  The Council was likely to benefit from the low borrowing rates at some stage when borrowing to finance the Housing Company’s development programme.

 

The Panel heard that Brexit was having an effect on the employment market, with a number of EU nationals reported to be leaving or planning to leave the

 

UK.  Direct Services were having difficulties recruiting to some posts and these issues may start to bite over time.

 

The Panel noted that seven council employees who were EU nationals had applied  to  be  reimbursed  the  £65  cost  of  applying  for  a  UK  Registration Certificate or Permanent Residence Card.  The Panel suggested that the Council should continue to offer this to staff, either through further communications to all staff or more targeted communications.

 

The Panel questioned the extent to which the Westgate Shopping Centre was attracting new retail business to the city or causing existing businesses to relocate.  The Major Projects and Development Manager said that the Westgate would provide a different offer to other parts of the city centre, including a number of new London-based operators who were opening flagship stores outside the capital.  Some existing city centre businesses had been turned down for plots in the new Westgate.  It was expected that there would be a period of flux for 1-3 years during which time there may be a number of empty units in the city centre  ...  view the full minutes text for item 59.

60.

Budget monitoring - quarter 1 pdf icon PDF 107 KB

 

 

Background Information

The Panel has a role in scrutinising the Council’s financial performance and monitoring spend against budgets. The integrated performance report for quarter 1 2017/18 sets out the Council’s financial position at 30 June 2017.  The City Executive Board on 19 September will be asked to note the report.

Why is it on the agenda?

For the Panel to note and comment on the Council’s financial outturn at the end of quarter 1 2017/18 before the report is presented to the City Executive Board and Council.

Who has been invited to comment?

·         Nigel Kennedy, Head of Financial Services.

 

 

Additional documents:

Minutes:

The Management Accountancy Manager introduced the report and highlighted the main variances.

 

In discussion the Panel noted that:

·    There  is  one  red  risk  on  the  corporate  risk  register  which  related  to governancearrangements for thenew CouncilCompanies.  Auditand Governance would be considering a report from the Council’s internal auditors on company governance.

·    Arecent Councildecision tocommit £1mof fundingto replacethe rain screencladding ontwo towerblocks wouldshow inthe Q2report.  This expenditurewas beingfunded fromthe reserveset up tomitigate the impacts ofthe higher value council homes levy, which has been delayed.

·    ThePanel wouldbe ableto considerhow theCapital Gatewayprocess is working when considering the Capital Strategyfor 2018/19.

·    Officersaimed toprovide clarityin reportswhere decisionswould be takento recommit anyunderspends, andopposition groupshad the opportunity challenge or support those decisions.

·    The  Direction  of  Travel  indicators  didn’t  clearly  relate  to  specific performancemeasures andas somemeasures werenew for thisyear there was no comparison.

·    Trainingand monitoringwas takingplace totry toensure thatthe Council would not breach the Housing Benefit subsidy threshold this year.

 

61.

Treasury Management Performance: Annual Report and Performance 2016/17 pdf icon PDF 213 KB

 

Background Information

The report sets out the Council’s treasury management activity and performance for the financial year 2016/2017.  The City Executive Board on 19 September will be asked to note the report.

Why is it on the agenda?

For the Panel to note and comment on treasury management performance.  The Panel may also wish to make one or more recommendations to the City Executive Board.

Who has been invited to comment?

·         Nigel Kennedy, Head of Financial Services;

·         Bill Lewis, Financial Accounting Manager.

 

Minutes:

The Head of Financial Services said that the Council’s investments totalled in the region of £90m-£100m at any one time.  Returns had reduced slightly to 1.05% but  had  remained  above  the  target  for  the  year.    Council  borrowing  had remained within limits and the Capital Financing Requirement showed that the Council had used internal borrowing rather than market borrowing to finance capital expenditure.  The Council had external borrowing from the PWLB at fixed rates totalling £198.5mm, which had enabled the Council to retain ownership of its social housing stock.   Interest paid on this external debt totalled £6.5m in

2016/17.

 

The Panel noted in discussion that the HRA financing costs ratio (Table 7) had improved as a result of additional income from temporary accommodation and fewer than expected Right to Buy sales.

 

62.

Additional funding for feasibility studies for investment property development opportunities pdf icon PDF 130 KB

 

Background Information

The report provides an update on the progress of a number of identified opportunities to maintain or improve the income stream from the Council’s property investment portfolio and seeks approval for an increased budget requirement.  The Scrutiny Committee asked for this item to be included on the agenda for pre-decision scrutiny.

Why is it on the agenda?

The City Executive Board on 19 September will be asked to:

1. Note the progress on the various schemes that had been identified and had budget approval to the value of £10,300,000. 

2.  Recommend to Council an increase of £4,635,000 to the allocated budget to deliver specific development opportunities.

3. Authorise entering into exclusive negotiations to seek financially viable agreements to lease with two identified commercial tenants, subject to Council budgetary approval.

4. Enter into agreements for lease at rental levels above the threshold of £125,000 per annum in line with the constitution.

5. Delegate to the Interim Assistant Chief Executive – Regeneration and Economy, in consultation with the Head of Financial Services, the authority to alter the terms of the agreements to lease on the basis that they continue to represent best value during negotiations.

Who has been invited to comment?

·         Fiona Piercy, Assistant Chief Executive – Regeneration & Economy;

·         Nick Twigg, Major Projects and Development Manager.

 

 

Additional documents:

Minutes:

The Major Projects and Development Manager introduced the report.  He said that  the  existing  projects  had  grown  significantly  in  size  and  cost  but  that densities and projected rental income had also increased.   It was recommended that some new projects would be added where vacant premises required capital expenditure.

 

The Panel questioned the implications of the Council not being able to let properties on assured shorthold tenancies (paragraph 30) and whether the margin was beneficial to the Council or not.  The Head of Financial Services Advised that he would seek clarity from Legal Services on this point.

 

A minority of the Panel thought that it would make more sense for the site in Cave Street to be used for housing and for the new housing planned on the East Oxford  Community  Centre  site  to  be  substituted  for  business  units.    This proposal would maximise housing and maintain the integrity of the East Oxford Community Centre site.

63.

Work plan pdf icon PDF 40 KB

For the Panel to note and agree its work plan, which can be adjusted to reflect the wishes of the Panel.

Minutes:

The Panel agreed to consider the IR35 item and a further report on Brexit at the March 2018 meeting.

64.

Notes of previous meeting pdf icon PDF 78 KB

For the Panel to approve the record of the meeting held on 6 July 2017.

Minutes:

The Panel approved the notes with corrections to typos on page 85.

65.

Future Meeting Dates

Meetings are scheduled as follows:

 

5 December 2017

31 January 2018

14 March 2018

 

All meetings start at 6.00pm.

Minutes:

Noted.

66.

Exempt appendices for item 6

Exempt appendices 5, 7, 8 & 9 for item 6: Additional funding for feasibility studies for investment property development opportunities

Minutes:

Not considered.