Substitutes are not allowed.

The Panel was advised that Councillor Hayes would be 15 minutes late.

The Panel noted for the record that Councillor Fooks was a member of Oxfordshire Credit Union and had invested in the Low Carbon Hub.

The Panel also noted for the record that Councillor Simmons was an advisor to the Low Carbon Hub on a voluntary basis and had invested in the Low Carbon Hub.

The Revenues and Benefits Service Manager introduced the report.  She explained the different types of Business Rate reliefs and said that government had frequently made changes to the types and levels of reliefs offered.  Planned changes being consulted on included the doubling of the Business Rates threshold from the rateable value of £6,000 to £12,000, with tapered relief up to £15,000.  Government had announced that grant funding would be provided to compensate local authorities for lost income.  Revaluations were also expected to take place more frequently in future. 

The Localism Act enabled the Council to grant discretionary rates relief ranging from 0-100% to any business, however, this resulted in a direct cost to the Authority.  The Council had a policy in place and considered applications on a case by case basis, although relatively few requests were received.  The Panel noted that some community based organisations that had been declined a discretionary relief may benefit from the raising of the Business Rates threshold.

The Panel noted that the financial impact of mandatory Business Rates reliefs appeared to be very high at £20.5m, compared to a total take of £86.8m (of which some £6.2m would be retained by the Council).  The Panel questioned how certain Council Officers were that the mandatory reliefs granted were legitimate.  The Panel heard that these reliefs would apply to organisations such as colleges and schools, and that businesses had a duty to inform the Council of any changes to their status. 

The Panel also asked about the enforcement of Council Tax discounts and exemptions, noting that there appeared to be a high number of discounts and exemptions granted.  The Panel heard that the Financial Services Team had timetables for reviewing Business Rates and Council Tax exemptions and discounts over the coming year based on risk analyses (Appendices G & H).  The Fraud Investigations Team would also deploy resources to assist with these reviews.  This team had recently doubled in size and was able to access data from different sources and flag anomalies.  This would inform the areas that warranted further investigation and the Single Person’s Discount was likely to be one of these. 

The Panel welcomed the work that was taking place to reduce fraud, noting that £508,480 had been recovered and £21,053 saved since February 2015.  The Panel questioned whether more frequent reviews might raise additional income and whether there was a case for increasing resources to enable this.  The Panel heard that the new rolling reviews would be more manageable and that the only resourcing challenge was managing a peak in workload each September due to some 7,000 student processes.

The Panel noted that some major Business Rates appeals were taking place and the possibility of successful backdated appeals represented a major risk to the Council.

The Panel requested the following information:

·         The financial impacts of Business Rates reliefs provided due to the redevelopment of Frideswide Square and the closure of St. Clements car park.

·         The numbers of changes that were identified in-year that would affect  ...  view the full minutes text for item 3.

Mark Luntley, Chair of Oxfordshire Credit Union (OCU), introduced the work of OCU.  He said that OCU had been going for ten years and had £0.5m in savings, £250k out in loans and 800 active members.  This represented a 10% increase in membership over the last six months and had been achieved by working with local employers.

It could be assumed from national figures that there were approximately 2000 people in Oxford with pay day loans and that some £1.7m was taken out of the local economy in interest payments on these loans.

A proposed merger with Blackbird Leys Credit Union had not taken place because, while OCU were happy with BLCU running a volunteer based office if demand was there, an office-based cash-based model was not considered to be practically or financially viable for OCU.  OCU had found that cash cards were popular with its members and they had received only seven visitors in a six month period as opposed to 700 telephone contacts.

Mark Luntley said that the ‘Evaluation of Credit Union Services in Oxford’ report that had been commissioned by the Council was an excellent report and that OCU had implemented or was in the process of implementing all 12 recommendations.  The report also made 21 recommendations to the Council.  Of these, there were four things that the Council could do to support OCU that would be of most benefit in terms of addressing financial exclusion in the city.  These were promoting OCU to council staff, promoting OCU to council tenants, providing a tapering grant to OCU until it is fully viable and providing a subordinated loan to build OCU’s capital reserves.

In response to a question about promoting OCU to council staff, the Panel heard that the Council already had a pay in advance scheme (which had low take up) but that some staff may not wish to make their employer aware that they were in financial difficulty.  OCU provided a different scheme which required borrowers to save and would over time steer them out of debt.  OCU had agreed with other employers not to promote the higher interest rate short-term loans that they had started to offer, within very tight constraints, following a recommendation in the evaluation report.

The Panel heard that OCU had not yet asked the Council for a subordinated loan but several other local authorities had provided loans to credit unions and any loan would be paid back with interest.

In discussion the Panel observed that:

• The Council did not appear to have provided a response to the recommendations made to the Council in the evaluation report.
• Clarity was needed as to whether the Council’s Treasury Management Strategy would preclude it from providing a subordinated loan to a credit union.
• There may be an opportunity for the Council to do more to integrate Discretionary Housing Payments with credit union services.

The Panel AGREED to:

• Request a written report setting out the Council’s response to the recommendations made to the Council in the  ...  view the full minutes text for item 4.

Steve Drummond, Non-Executive Director (Investment) of the Low Carbon Hub (the Hub), said that the Hub aimed to reduce energy usage and create renewable energy by working through communities.  He explained the Hub’s funding model relied on raising money in the community and had a multiplier effect.  The model did not rely on tax breaks or incentives and it offered investors a return that was 3% above RPI inflation.

Steve Drummond said that Feed-in Tariffs (FITs) on solar electricity systems had balanced European Union (EU) import tariffs but changes to FITs announced in October had made new solar projects unviable and seriously damaged the industry.  This situation was expected to be resolved within two years, either through successful lobbying or Brexit (British exit from the EU).  There had been a rush prior to the FITs changes that would keep the Hub busy with projects for the next 12-18 months.

The Hub would be issuing a call for capital in the coming weeks and aimed to raise £3m.  Together with £2m from the Charity Bank this would fund £2m of solar electricity systems on schools and a £3m hydro project at Sandford which was expected to be the largest such project on the river Thames.  These projects would generate some £170k in direct benefits to the local community and pay for the Hub’s core staff. 

In terms of energy efficiency, the Hub was looking to retrofit homes in a postcode area holistically in two areas; one within the City with a high proportion of private rented housing and one rural area focused on helping the rural poor.  The Panel observed that the Council may be able to assist in identifying a suitable urban area for this pilot project.

In response to a question, the Panel heard that the Hub had considered looking at projects further afield but did not want to lose its community ethos which was focused on the local area.

The Panel asked about support from the City Council and heard that its loan to the Hub had been essential and was still revolving.  Steve Drummond also said that the Hub was bidding for money that would enable it to proceed with fitting solar electricity systems on social housing in the City. 

The Panel asked whether the Council could consider investing in the Hub as this may generate higher returns that some of the Council’s existing investments.  The Management Accountancy Manager advised that the Council’s Treasury Management Strategy did allow for this but while the option remained on the table, the Council was not looking to make longer term investments at the current time due to uncertainties around the impacts of recent national policy changes on the Council’s Housing Revenue Account.

The Panel questioned whether a similar funding model could be used by the Council to fund things like new build affordable housing with solar electricity systems and heard that this was possible, although there were challenges around the economic viability of solar power at the current time.

The  ...  view the full minutes text for item 5.

For the Finance Panel to note the City Executive Board response to the 2016/17 Budget Review recommendations.  The Panel may wish to comment on the responses or the budget review process.

The Panel noted the responses and restated its support for the recommendations that were not agreed or were agreed in part.  The Panel made the following observations:

·         £1200 of income from commercial filming seemed very small (recommendation 9).

·         That the Panel regretted the response to recommendation 16 and felt that the level of the homelessness reserve should be kept under review.

·         That the response to recommendation 19 did not make sense as it was possible to lock in the prices of multi-year capital schemes when awarding contracts without having the cash available.

This is the final Finance Panel meeting of the current Council year.  In June the Scrutiny Committee will agree its standing panels and work plan priorities for 2016-17.

The Panel may wish to suggest items for inclusion on the 2016/17 scrutiny work plan.  The Committee has asked for suggestions by 20 May 2016 and a list of suggestions received to date is included for information.

The Panel noted the long-list of suggested topics for the year ahead and agreed to add the following items:

·         Credit Union Services - to revisit and follow up on the discussion with Oxfordshire Credit Union.

·         Capital planning – to receive an update on the capital gateway process and consider the scope for better capital planning.

·         Tower block refurbishment – to consider lessons learned.

·         Service Charges – to consider the scope for raising service charges on Council housing to mitigate reduced rental income.

·         Gross budgeting – to consider external income and gross budgeting year-round.

Meetings are provisionally scheduled as follows:

8 September 2016

8 December 2016

16 January 2017

1 February 2017

29 March 2017

All meetings start at 5.30pm.

The Panel noted that the next Finance Panel meeting was scheduled for September 2016 and requested that an earlier meeting should take place following the Scrutiny Committee in June for the Panel to elect a Chair and consider its work plan for the year ahead. 

The Scrutiny Officer said that the meetings were scheduled to fit with the budget setting and monitoring cycle but that he could support an earlier meeting in June or July.

The Chair closed the meeting by thanking Panel Members and Council Officers for their contributions and support during the year.