Report of the Head of Financial Services on the soundness of the financial proposals before Council (to follow in the briefing note)

The Head of Financial Services will present the report and recommendations.

Recommendations: Council is recommended to note the report and its implications.

Council considered a report from the Head of Financial Services on the soundness of the financial proposals before Council. The Head of Financial Services drew attention to the key points and to the levels of the Council’s reserves and balances.

Council resolved to note the report and its implications.

The Head of Financial Services submitted a report to the City Executive Board on 9 February which presents the outcome of the budget consultation and the Council’s Medium Term Financial Strategy for 2017-21 and 2017-18 Budget for recommendation to Council.

The minutes of that meeting are available.

The Deputy Leader will move the City Executive Board’s recommendations.

Opposition Group amendments to the budget will be circulated with the briefing note.

The procedure for this item is at Agenda Item 4.

Recommendations:  Council is recommended to:

a.    note that the City Executive Board agreed to recommend to Council the budget  published as part of the agenda for their meeting on 9 February with amendments as set out below;

b.    note the implications (contained in this budget) of the City Executive Board’s decision on 15 December 2016 to make an investment to expand the commercial waste fleet collection capacity by adding an additional refuse collection vehicle (RCV) to the vehicle replacement programme and place an order for this vehicle now and creating two permanent posts, one driver and one loader, to crew the additional RCV;

c.    consider the recommendations of the City Executive Board including the amendments below;

d.    consider the substantive amendments proposed by the opposition groups; and published with the briefing note;

e.    consider individual amendments; and

f.     agree the recommendations from the City Executive Board to Council or with further amendments:

The City Executive Board recommends that Council:

1.    approve the 2017-18 General Fund and Housing Revenue Account budgets and the General Fund and Housing Revenue Account Medium Term Financial Plan as set out in Appendices 1-10, noting:

a)    the Council’s General Fund Budget Requirement of £21.055 million for 2017/18 and an increase in the Band D Council Tax of 1.99% or £5.67 per annum representing a Band D Council Tax of £290.19 per annum;

b)    the Housing Revenue Account budget for 2017/18 of £44.285 million and a reduction of 1% (£1.06/wk) in social dwelling rents from April 2017 giving a revised weekly average social rent of £105.65 as set out in Appendix 4;

c)    the General Fund and Housing Revenue Account Capital Programme as shown in Appendix 6;

2.    agree not to implement the voluntary ‘Pay to Stay’ policy for Council house tenants (para 28 of the report refers);

3.    agree the fees and charges shown in Appendix 7 with the amendment to waive the fees for:

•      Interment of a child – who at the time of death was less than 1 month (Resident); and

•      Interment of a child - who at time of death was prior to 12th birthday (Resident).

4.    delegate authority to the Section 151 Officer in consultation with the Board Member for Finance, Asset Management and Public Health the decision to determine whether it is financially advantageous for the Council to enter into a Business Rates Distribution Agreement as referred to in paragraphs 16-17 of the report;

5.    agree an additional loan of up to £75,000 for working capital to  ...  view the full agenda text for item 85

Councillor Goddard arrived shortly after the start of this item and Councillor Clarkson arrived during the second amendment debate.

Council had before it and considered:

• The budget submitted to the City Executive Board for consideration on 9 February 2017;
• The recommendations from the City Executive Board from that meeting;
• The Liberal Democrat group’s submitted amendments published with the briefing note;
• The Green group’s submitted amendments published with the briefing note;
• The Deputy Leader’s submitted amendment on behalf of the Executive Board published with the briefing note;
• Two amendments from the Liberal Democrat group submitted at the meeting;
• Two amendments from the Green group submitted at the meeting.

Councillor Turner, seconded by Councillor Price, moved the City Executive Board recommendations and an amendment to these. This was agreed and included at (9) in the decision below.

a)    Alternative budget proposals

Councillor Fooks, seconded by Councillor Gant, moved and seconded the Liberal Democrat group amendments circulated before the meeting.

After debate these were put to the vote.

With more councillors voting against than for, the Liberal Democrat amendments were not carried.

Councillor Simmons, seconded by Councillor Thomas, moved and seconded the Green group amendments circulated before the meeting.

After debate these were put to the vote.

With more councillors voting against than for, the Green group amendments were not carried.

b)   Further amendments to the City Executive Board budget as proposed and amended

1.    Councillor Thomas, seconded by Councillor Simmons, moved and seconded an amendment: each year from 2017/18 to 2020/21 to use £50,000 of the vacancy factor identified in LibDem substantive budget amendment to provide additional transitional support to Children’s Centres within the city.  

Councillor Turner proposed a further amendment: each year from 2017/18 to 2020/21 to use £30,000 and provide support through the small grants budget to allow flexibility. This was accepted by the proposer.

The S151 officer confirmed this was feasible but there were risks in using the vacancy factor this way. After debate this was put to the vote.

With more councillors voting for than against, the amendment was carried:

to use £30,000 of the vacancy factor identified in LibDem substantive budget amendment to provide additional transitional support to Children’s Centres within the city, provided through the small grants budget.

2.    Councillor Simmons, seconded by Councillor Gant, moved and seconded an amendment: reduce the size of the communications team from 6 to 4, draw down the disabled transport reserve and invest in a new fraud officer to generate sufficient on-going revenue to fund a range of small initiatives in opposition budget amendments.  

The S151 officer confirmed this was feasible. After debate this was put to the vote.

With more councillors voting against than for, the amendment was not carried.

3.    Councillor Gant, seconded by Councillor Fooks, moved and seconded an amendment: from 2017/18 onwards to use £20,000 of the vacancy factor identified to fund additional ESOL teaching.

The Leader stated that while he would not support this he would be open to providing additional  ...  view the full minutes text for item 85

The report and recommendations of the Finance Panel of the Scrutiny Committee to the City Executive Board meeting on 9 February and the Board’s response are attached.

The Chair of the Finance Panel will present the report and the recommendations.

Recommendation: Council is asked to note the report and the City Executive Board’s response set out in the attached document and in the minutes of the meeting of 9 February.

Council considered the report and recommendations of the Finance Panel of the Scrutiny Committee to the City Executive Board meeting on 9 February and the Board’s response.

Council resolved to note the report and the response.

The Licensing and Gambling Acts and General Purposes Licensing Committees considered reports on fees and charges for the licensing functions dealt with at their meetings on 23 January.

The draft minutes of the Committees and the reports accompanying the three sets of fees and charges are attached.

These fees and charges are included in the papers for Item 9 at Appendix 7.

The Committee Chairs may wish to present the recommendations.

Recommendations: Council is recommended to:

1.    agree the recommendations of the Licensing and Gambling Acts Committee (Appendix 7, relevant Community Services Fees and Charges); and

2.    agree the recommendations of the General Purposes Licensing Committee in respect of fees for other licensable activities (Appendix 7, relevant Community Services Fees and Charges);

3.    agree the recommendations of the General Purposes Licensing Committee in respect of fees for miscellaneous activities (Appendix 7, relevant Planning and Regulatory Fees and Charges).

Councillors Abbasi and Malik, having declared this related to their disclosable pecuniary interests, withdrew from the council chamber for the duration of this item.

Council considered the recommendations of the Licensing and Gambling Acts and General Purposes Licensing Committees on fees and charges included in the budget before Council as part of appendix 7.

Council resolved to:

1. agree the recommendations of the Licensing and Gambling Acts Committee (Appendix 7, relevant Community Services Fees and Charges); and
2. agree the recommendations of the General Purposes Licensing Committee in respect of fees for other licensable activities (Appendix 7, relevant Community Services Fees and Charges); and
3. agree the recommendations of the General Purposes Licensing Committee in respect of fees for miscellaneous activities (Appendix 7, relevant Planning and Regulatory Fees and Charges).

Cllr Simmons, Chair of the Scrutiny Finance Panel presented the report. He said there was a huge amount of external uncertainties at the moment so the focus of the Finance Panel had been testing the robustness of the assumptions made.

He made the following comments:

·         The Budget balances over 4 years but he was cautious about the Council’s approach in year 4 to transferring £800k from the general fund to balance the budget.

·         The Council is maximising revenue through trading services which the Panel support.

·         We would like to see which fees and charges (rec 2) we have discretion to raise and which we do not.

·         Reducing licensing fees (rec 4) might create more revenue from street trading for areas outside the city centre.

·         Revenue from car parking fees may be affected by proposed new rail routes and should be labelled high risk (rec 6)

·         Invest to save initiatives are happening in the capital programme but not in the revenue budget. There is £750k in the Invest to Save fund which has not being used. The Panel believe officers should be encouraged to suggest more high risk schemes.

·         Given that contingencies on high risk efficiency saving projects have not been drawn on. Council could consider releasing more contingency.

·         The Panel supported the Audit and Governance Committee looking at the governance of the companies and whether the council has the in-house expertise to run them.

·         He queried some of the political priorities in the budget and asked whether the money allocated to the Council tax support scheme (rec 12) was the best way to get people out of poverty. Likewise the apprentices’ scheme (rec 14) has a significant cost to it.   What assessments are done to prove the value of such schemes?

·         He mentioned the archive project and the need to fund the completion of it. As items might cost us more in the future if we don’t fund them properly now.

Cllr Turner, Board Member for Finance, Asset Management and Public Health made the following comments:

·         The Finance Panel report was thoughtful, useful and productive and was a good example of scrutiny working well.

·         It is prudent to leave the contingencies as they are, and not spend one off contingency in service delivery. We encourage managers to suggest efficiency savings. Suggestions will not always be successful and will get harder and harder every year. So it is important we retain the contingencies in case projects don’t work out.

·         Invest to save – correct most are capital but we are keen for revenue suggestions as well.

·         Note the big challenge in year 5, we don’t know what is going to happen.

·         Challenge of creating a trading company. The market is changing, and we recognise we already have a significant market share in some areas (trade waste for example). There is also the challenge of experienced officers retiring in the next few years which will have an impact.

·         The Council tax support grant is not a massive expense. We will review it  ...  view the full minutes text for item 127

The Head of Financial Services has submitted a report which presents the outcome of the budget consultation and the Council’s Medium Term Financial Strategy for 2017-21 and 2017-18 Budget, for recommendation to Council

Recommendations: That the City Executive Board resolves to:

1.    Agree the amendments to the Consultation Budget, in light of the outcomes of the public consultation.

2.    Recommend that Council approve the 2017-18 General Fund and Housing Revenue Account budgets and the General Fund and  Housing Revenue Account Medium Term Financial Plan as set out in  Appendices 1-10, noting:

a)    the Council’s General Fund Budget Requirement of £21.055 million for   2017/18 and an increase in the Band D Council Tax of 1.99% or £5.67 per annum representing a Band D Council Tax of £290.19 per annum

b)    the Housing Revenue Account budget for 2017/18 of £44.285 million and a reduction of 1% (£1.06/wk) in social dwelling rents from April 2017 giving a revised weekly average social rent of £105.65 as set out in Appendix 4

c)    the General Fund and Housing Revenue Account Capital Programme as shown in Appendix 6.

3.    Recommend that Council agree not to implement the voluntary ‘Pay to Stay’ policy for Council house tenants (para 28 refers)

4.    Recommend that Council agree the fees and charges shown in Appendix 7

5.    Recommend that Council delegate authority to the Section 151 Officer in consultation with the Board Member for Finance and Assets the decision to determine whether it is financially advantageous for the Council to enter into a Business Rates Distribution Agreement as referred to in paragraphs 16-17 below.

6.    Recommend that Council agree an additional loan of up to £75k for working capital to Oxwed as highlighted in paragraph 41

7.    Recommend that Council agree provision of a loan facility to Oxford City Housing Ltd of up to £61 million (paras 39-40) an extra £48.75 million over the next four years, subject to the provision of; and agreement to a business plan by the Company.

The Head of Financial Services submitted a report which presented the outcome of the budget consultation and the Council’s Medium Term Financial Strategy for 2017-21 and 2017-18 Budget, for recommendation to Council

Cllr Turner, Board Member for Finance, Asset Management and Public Health said that the government grant will be zero by 2020. There are no frontline service cuts, we are investing in service improvements and are creating a trading company so we can increase the trading we do.

Highlights include:

·         the housing company being established;

·         we’re investing in new properties for homeless families and building new council housing, and

·         Retaining in full our homelessness prevention budget and our budget for the third sector.

Financial pressures include changes to the New Homes Bonus (NHB) which caused a grant reduction and pressure in year 4.  A reduction in funding from business rates as part of the fairer funding process will give us less money than we would have wished.

Additional budget items include money for low emission taxi vehicles, designer costs at Cowley Marsh pavilion and additional funding to assist children centres run stay and play for one year only.

In terms of the Housing Revenue Account, the government had delayed introducing the Right to Buy Scheme to housing associations so the Council will not be forced to sell high value empty council houses to reimburse the government in 2017/18.

Council agreed two budgetary motions at its meeting on 6 February –

·         To retain the additional £200,000 pension provision,  which will cover potential increased liability to the Council arising from TUPE transfer of staff to a Local Authority wholly owned company for Direct Services; and

·         To waive internment fees for stillborn babies and children under 12 years old for Oxford residents. Changing the Council’s fees and charges with immediate effect is estimated to reduce income by a small amount in 2016-17 and around £5100 in a full year for 2017-18. This pressure can be accommodated within the Council’s overall budget in 2016-17 and 2017-18, and the budget may be rebased if appropriate in future years.

Cllr Hollingsworth asked about the gap in the budget from the loss in  new homes bonus in years 3 and 4

The Director for Organisational Development and Corporate Services explained that the NHB figures are based on current information. However there is a fixed pot for NHB so it depends on the number of new homes other councils are able to generate which will determine the proportion of the NHB we receive.

Recommendations: That the City Executive Board resolves to:

1.    Agree the amendments to the Consultation Budget, in light of the outcomes of the public consultation.

2.    Recommend that Council approve the 2017-18 General Fund and Housing Revenue Account budgets and the General Fund and Housing Revenue Account Medium Term Financial Plan as set out in Appendices 1-10, noting:

a)    the Council’s General Fund Budget Requirement of £21.055 million for 2017/18 and an increase in the Band D Council Tax of 1.99% or £5.67 per  ...  view the full minutes text for item 127

The Head of Financial Services has submitted a report which proposes a Medium Term Financial Strategy and the 2017/18 Budget for consultation

Recommendations: That the City Executive Board resolves to:

1.    Approve the 2017-18 General Fund and Housing Revenue Account budgets for consultation and the General Fund and  Housing Revenue Account Medium Term Financial Plan as set out in  Appendices 1-9, noting :

a.    the Council’s General Fund Budget Requirement of £21.256 million for   2017/18 and an increase in the Band D Council Tax of 1.99% or £5.67 per annum representing a Band D Council Tax of £290.19 per annum

b.    the Housing Revenue Account budget for 2017/18 of £44.285 million and a reduction of 1% (£1.06/wk) in social dwelling rents from April 2017 giving a revised weekly average social rent of £105.65 as set out in Appendix 4

c.    the General Fund and Housing Revenue Account Capital Programme as shown in Appendix 6.

2.    Agree not to implement the voluntary ‘Pay to Stay’ policy for Council house tenants (para 9)

3.    Agree the fees and charges shown in Appendix 7

4.    Delegate authority to the Section 151 Officer in consultation with the Board Member for Finance and Assets the decision to determine whether it is financially advantageous for the Council to enter into a Business Rates Distribution Agreement as referred to in paragraphs 20-21 below.

5.    Recommend to Council an additional loan of up to £50,000 for working capital to Oxwed as highlighted in paragraph 50

6.    Recommend to Council provision of a loan facility to Oxford City Housing Ltd of up to £60.850 million (para 48) subject to the provision of; and agreement to a business case by the Company. This replaces all previous recommendations agreed by City Executive Board.

Cllr Turner, Board member for Finance, Asset Management and Public Health presented the report.

He made the following comments:

1. The Council has agreed with the government a multi-year financial settlement which deletes all of our grant by 2020
2. There are significant pressures post Brexit on business rate growth and uncertainty in the wider economic climate.
3. Reduced benefit cap have increased Council’s financial obligations
4. The County Council has effectively stopped funding social services in the city and the City Council has been asked for more money to provide these services.
5. The City is safeguarding every penny we spend on homelessness.
6. Trading  has helped pay for these additional costs but we have to make sure it is sustainable
7. The City continues to invest in housing and infrastructure eg £4m in community centres.

The City is not going to implement the government’s Pay to Stay housing policy, which charges council tenants’ more rent if they earn over a certain threshold.  Implementing the policy would cost a lot in bureaucracy.

The budget includes a substantial capital programme with no significant service reduction but there is still uncertainty in the HRA, as the government has not yet made a decision on whether to extend the right to buy scheme.

The budget will be out for public consultation until January 2017. Any changes to fees and charges are subject to consultation.

The Council received its grant settlement from the government today. The grant settlement is down and there has been a change to the way the government administers the new homes bonus.  More work needs to be done to confirm how the changes will affect the Council but it could mean a reduction of £1m off the new homes bonus.

The Chief Executive made the following comments:

·         The budget proposes £12.3m in efficiency savings over the next 4 years and is transforming itself into an enterprising council. 

·         Councils are feeling the effects of the government’s austerity programme, especially the County Council which has made huge cuts to the most vulnerable social services.

·         Social effects are being felt in the city from the reduction in funding for preventative care.

·         Economic development was jointly funded by the County and City councils. However the County withdrew its funding and the posts are now fully funded by the City.

·         the Grant budget continues to increase.

·         The budget provides resources of £60m for use by the Housing Company over the next 4 years and the building of around 500 new homes.

·         The capital programme contains £123m of projects this has been leveraged from direct services trading.

The Board noted that recommendation 5 related to the 16/17 budget.  There is an error in paragraph 50, it should say March 2017 not March 2018 as written in the report.

The City Executive Board resolved to:

That the City Executive Board resolves to:

1.      Approve the 2017-18 General Fund and Housing Revenue Account budgets for consultation and the General Fund and Housing Revenue Account Medium Term Financial Plan as set out in Appendices 1-9,  ...  view the full minutes text for item 101