Cllr Simmons, Chair of the Finance Panel presented the report. He mentioned the concern around the Low Carbon Hub not meeting its targets because the threshold has increased due to the drop of the Pound against the Euro. If the target is not met then money will have to be returned to the EU.

The Head of Financial Services said he would be happy to continue to update Councillors on the effect of Brexit on Council finances.

He said that despite the increased target the annual report for the Oxfutures programme (which is run by the Low Carbon Hub) is better than expected and with the Sandford hydro scheme in development he is confident the programme would hit the EU target.

Cllr Tanner said that a meeting of Europeans living in Oxford was to be held in the town hall. It was for people who had expressed concerns about the Brexit vote and the implications the vote might have on European nationals in Oxford.

The Board approved the recommendations set out in the Scrutiny report (page 7 of the supplementary agenda).

The Head of Financial Services introduced the report.  He said that many impacts of Brexit had not yet played out but that there were some immediate impacts on the Council.  Lower interest rates would hit the Council’s annual treasury income by approximately £400k.  There had also been a drop in property fund appreciation values although these were still well above purchase values and dividend income had remained unaffected.  The Council also had an income target that was measured in Euros, which would be harder to achieve since the value of Sterling had dropped.  On the upside, the cost of borrowing was cheaper and the Council did have a borrowing requirement within its Medium Term Financial Plan, some of which would be met using internal borrowing.  Officers would explore whether it would be advantageous to borrow now at low rates, given that there would be a cost of carrying borrowed money that was not yet needed.

The Panel questioned whether there would be a case for closing and refinancing the Housing Revenue Account debt.  The Panel heard that the Council would look again at whether or not to refinance the first £20m repayment due in 2021.  Officers had looked at whether there was an opportunity to refinance the debt outside of the repayment tranches but this option was found to be too punitive.

The Panel suggested that the Council could face higher procurement costs and potentially difficulties in achieving income from trading following the Brexit decision and any resulting economic downturn.  The Panel noted that it would be helpful for the Council to track the impacts of wider economic changes on things like trading income and procurement costs, as well as income from car parking, commercial rent, investments and planning fees.  The Panel suggested that if and when Figure 11 is updated, expected income from the different streams should be included for 2016/17.  The Panel also asked officers to check the explanation for the dip in car parking income in 2010/11. 

In terms of the wider economy the Panel suggested that Brexit could reduce inward investment and joint funding opportunities, noting that the impact on Business Rates income of one or two major employers relocating away from the City could be high, with the Council liable to lose £500k before safety payments kicked in.  The Panel heard that 19 business premises accounted for 22% of rateable values in the City.  There was also a question mark around whether safety net payments would still apply when Councils were granted 100% Business Rates retention (which would only apply to growth above a baseline not the full Business Rates take).

The Panel considered whether there was a strong case for increasing council borrowing in order to increase investment spending.  The Panel heard that this would be kept under review but that the Council was taking a lead already in many respects compared to benchmarked authorities.  Going even further would depend on the Council’s appetite for borrowing and risk.  The Panel noted that the Council  ...  view the full minutes text for item 20