Substitutes are not allowed.

The Panel noted apologies from Councillor Sian Taylor and Councillor Susan Brown (Board Member for Customer and Corporate Services).

There were no declarations.

The Revenue and Benefits Programme Manager introduced the report.  He said that the Council Tax Reduction Scheme (CTRS) used to be fully funded by Government but from April 2019 the Council would have to meet the full cost to the Council of £1.6m per year.  The caseload had been reducing slightly and although it could increase if the economic conditions worsened the cost of the scheme was thought to be fairly static.   However, the cost pressure would increase in proportion to the reduction in Formula Grant from £1m in 2016/17 to £1.6m in 2019/20.  This cost had already been budgeted for in the Medium Term Financial Plan.  The overall cost of the scheme was about £10m but the County bore the majority of this cost and the Police bore about one-sixth of the cost. 

The Revenue and Benefits Programme Manager explained that the CTRS provided full Council Tax support to people on low incomes at a time when many other benefits were being reduced.  Further benefit changes had yet to take effect including the lowering of the Benefit Cap, reductions to Universal Credit and additional Tax Credits and Housing Benefit restrictions. 

The Panel heard that the assessment process for CTRS mirrored that for Housing Benefit.  Given that most applicants claimed both benefits, it made sense to combine the administration of the two schemes.  A project group had been set up to develop proposals for a new scheme once Universal Credit replaces Housing Benefit.  This will provide an opportunity to achieve some administrative savings from 2018.

The Panel questioned whether there was an obligation on the other precepting authorities to accept the scheme, which affected the level of their Council Tax income.  The Revenue and Benefits Programme Manager explained that control lay with the collecting authorities but that in developing the scheme, the Council had worked closely with other Oxfordshire authorities in taking a county-wide approach.   Some neighbouring authorities had subsequently moved away from this approach by introducing minimum payments.  There was no requirement for authorities to report the impacts of CTRS schemes, for example on Council Tax collection rates, so information available for benchmarking was patchy.  However, if the level of support was reduced then the overall collection rate would be affected and administration costs associated with the scheme would increase. 

In response to a question, the Panel heard that CTRS was a separate scheme from Council Tax Discounts and Exemptions but that the Council had used the proceeds of higher Council Tax charges on long-term empty properties to partially off-set the cost of CTRS.  The Revenue and Benefits Service Manager explained that the Council was required to have a separate discretionary discount scheme but that no discretionary discounts had yet been granted because, unlike many other authorities, the Council offered a full reduction under the CTRS scheme.  The Council would look at any applications on their merits but would not use public money to fund discretionary discounts lightly.  The Panel also received assurances that officers looked at applicants circumstances  ...  view the full minutes text for item 19.

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.

The Management Accountancy Manager introduced the report and highlighted the adverse variances in the General Fund and Capital Programme as well as the positive variance on the Housing Revenue Account.  She also provided an overview of transfers from reserves and virements. 

The Panel expressed concern about the £389k adverse variance in the General Fund, which was largely due to a staff restructure (£126k) and unmet income targets (£150k) in the Planning and Regulatory Service.  The Panel heard that part of the restructure cost was due to consultant support but that there was an ongoing pressure of £70k which would need to be picked up in the coming budget round.  The Panel agreed that this service should be subject to further scrutiny during the Budget Review.

The Panel welcomed ring-fenced capital grant funding for Super Connected Cities and Disabled Facilities Grants.  The Panel noted that £328k of capital slippage related to a Research and Development Feasibility Fund and questioned what this fund related to.  The Panel heard that this was a feasibility fund for new schemes that comprised of a £200k base budget plus carry forwards from previous years.  The Panel agreed to revisit this budget during the Budget Review.

The Head of Financial Services introduced the report and said that the 1.1% return on the Council’s investments represented a good outcome given that the base rate was only 0.5% during 2015/16.

The Panel considered whether there was a case for holding money in equivalent banks located in other jurisdictions.  The Head of Financial Services advised that interest rates were unlikely to be markedly different in other developed countries.  The Panel noted that exchange rates tended to even out any possible gains in the longer run, although there may be some merit in holding money abroad terms of diversifying the Council’s holdings. 

The Scrutiny Officer introduced the report and said that the proposals were similar to last year.  One change was the potential need to take account of the outcomes of a parallel process to the budget whereby comprehensive reviews would be undertaken of selected service budgets. 

The Head of Financial Services advised that six reviews were taking place in tandem and while they may not be completed by the time the consultation budget is published, they would not impact service on budgets for year one of the Medium Term Financial Plan.  The Panel questioned who was undertaking the reviews, how they were funded and the involvement of Board Members.  The Panel heard that some funding had been made available from carry forwards and the Transformation budget to obtain external advice in some specialist areas but in the main they would be conducted by officers with Board Member involvement towards the latter stages.  In response to a question, the Panel heard that in total the reviews covered some £8m of Council’s net spend.

The Panel noted the Budget Review meeting dates and agreed to invite members of the Housing Panel to the Housing and Regeneration session.

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

The Panel currently has no items scheduled for the meeting in March 2017.

The Panel agreed:

·         To consider gross budgeting at its meeting in December ahead of the Budget Review.

·         To consider any available outcomes from the service reviews in January 2017. 

·         To keep the March 2017 meeting free for now.

·         That the Chair would provide a more detailed scope for the Divestment item.

For the Panel to note the record of the meeting held on 30 June 2016.

Noted.

Finance Panel meetings are scheduled as follows:

8 December 2016

16 January 2017

1 February 2017

29 March 2017

All meetings start at 5.30pm.

Noted.