Please ask for: Paul Rawcliffe Telephone: 01482 615016 Fax: 01482 614804 Email: [email protected] Text phone: 01482 300349 Date: Wednesday, 19 February 2020
Dear Councillor,
Full Council
You are requested to attend the Full Council to be held on Thursday, 27 February 2020 in Council Chamber at 10:00 .
Yours faithfully,
Matt Jukes Chief Executive
Town Clerk Services, Hull City Council, The Guildhall, Alfred Gelder Street, Hull, HU1 2AA www.hullcc.gov.uk Tel: 01482 300300 Page 1 of 324
Full Council
To: Membership: All Members of the City Council (57)
Officers: Matt Jukes, Chief Executive Niki Clemo, Director of Children, Young People and Family Services Julia Weldon, Director of Public Health and Adult Services Mark Jones, Director of Regeneration David Bell, Director of Finance and Change Management Ian Anderson, Director of Legal Services and Partnerships Paul Rawcliffe, Democratic Services Officer (x5)
For Information: Honorary Aldermen (x7) (Public Sets) Labour Group Secretary Democratic Services (x10 Public Sets) Guildhall Reception (Public Set) Reference Library (Public Set)
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Full Council 10:00 on Thursday, 27 February 2020
Council Chamber
A G E N D A CIVIC AND PROCEDURAL
1 Apologies To receive apologies for those Members who are unable to attend the meeting.
2 Declarations of Interest To remind Members of the need to record the existence and nature of any Personal and Discloseable Pecuniary interest in items on the agenda, in accordance with the Member Code of Conduct.
(Members Code of Conduct - Part D1 of the Constitution)
3 Minutes of the Meeting of the City Council held on 16th 7 - 34 January, 2020 To consider the above minutes.
4 Composition of Political Groups The Monitoring Officer to report any changes to the compostition of political groups.
(Council Procedure Rules 5.2.5).
5 Membership of Committees, Joint Committees and External Bodies To consider motions (if any) to appoint members to a committee or a joint committee.
(Council Procedure Rules 5.25 and 10.1.13)
NON-EXEMPT ITEMS
PUBLIC ITEMS
LEADER OF COUNCIL AND CABINET
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6 Leader's Statement The Leader of Council may make a statement to the Council and a period of up to 10 minutes is allowed for this purpose.
The leader of a political group represented on the Council may respond to the statement and a period of up to 5 minutes each is allowed for this purpose.
(Council Procedure Rule 13)
7 Housing Revenue Account Budget Setting 2020/2021 and 35 - 80 Beyond To consider the above report.
8 Review of Locally Defined Discounts for Council Tax in 2020/21 81 - 98 To consider the above report.
9 General Fund Revenue Budget 2020/21 and Medium Term 99 - 246 Financial Plan 2020/21 to 2022/23 To consider the above report.
10 Capital Strategy 2020/21 to 2022/23 247 - 266 To consider the above report.
11 Treasury Management Strategy Statement, Minimum Revenue 267 - 324 Provision Policy Statement, and Annual Investment Strategy 2020/21 To consider the above report.
OVERVIEW AND SCRUTINY, REGULATORY AND OTHER COMMITTEES
JOINT ARRANGEMENTS
BUSINESS DEFERRED FROM THE PREVIOUS MEETING OF COUNCIL
MEMBER BUSINESS Page 4 of 324
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Council
16 th January, 2020
PRESENT:- Councillor Wilson, Lord Mayor (in the Chair). Councillor Petrini, Deputy Lord Mayor (D. C.); Councillors Abbott, Akbar, Bell, Bisbey, Black, Brabazon, Brady, Bridges, Burton, Chaytor, Collinson, Clark, Conner, Coward, Craker, Dad, Drake- Davis, Dunstan, Fareham, Fudge, Gardiner, Greenhill, Haines, Hale, Harrison, Hatcher, Healand, Herrera-Richmond, Ieronimo, Kennett, Kirk, Langley, Lunn, Matthews, McCobb, McMurray, Neal, Nicola, Pantelakis, Payne, Pritchard, Quinn, C. Randall, (Mrs.) C. E. Randall, Ross, Singh, D. Thompson, M. Thompson, Wareing, Webster and Williams. APOLOGIES:- Councillor Allen. Belcher, Chambers and Tock.
Minute Description/Decision Action No. By/Deadline PROCEDURAL ITEMS 83 DECLARATIONS OF INTEREST
Councillor Hale declared a personal interest in minute 95, insofar as he was the Lead Officer for Children and Asylum Seekers at North East Lincolnshire Council.
Councillor Kennett declared a personal interest in minute 95, insofar as she was a Trustee of Hull Help for Refugees.
Councillor Ieronimo declared a personal interest in minute 96, insofar as members of his family and friends had, or would be applying for, EU citizenship.
84 MINUTES
Agreed – That the minutes of the meeting of the City Council, held on 21 st November, 2019, having been printed and circulated, be taken as read and correctly recorded and be signed by the Lord Mayor.
85 COMPOSITION OF POLITICAL GROUPS
The Town Clerk reported that there had been no
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changes to the composition of the political groups within the City Council.
Agreed – That the report be noted.
86 MEMBERSHIP OF COMMITTEES , JOINT Paul Rawcliffe/ COMMITTEES AND EXTERNAL BODIES Di Taylor/ Louise Hawkins Moved by Councillor Chaytor and seconded by Councillor Hale:
That Councillor Chaytor be appointed to the vacancy on the Charterhouse Board of Trustees.
To note that Councillor Conner has withdrawn from the Licensing Committee.
Moved by Councillor Dad and seconded by Councillor Ross as an amendment:
The motion with the amendment that Councillor Payne be appointed to the vacancy on the Charterhouse Board of Trustees.
Amendment lost. Motion carried.
87 PETITIONS
The Town Clerk reported that he had not received any petitions that needed to be considered by the City Council.
Agreed – That the report be noted.
88 LEADER’S STATEMENT
The Leader began his statement and commented on the Council’s relentless progress in Children’s Services; the Parliamentary Election held on 12 th December, 2019; the progress of devolution for the North; the need for a united approach to business across the Humber region; works to Beverley Road Baths and East Park, and the start of the Council’s house building programme across the City.
Councillor Fareham replied to the Leader’s Statement and commented on people who knew their duty; South Yorkshire’s deal for devolution;
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the need to relent on the rules for Local Economic Partnerships (LEP); Lord Haskins’ recent retirement from the Chair of the LEP; organisations doing the jobs they were established to do, and ‘One Yorkshire’.
Councillor Ross replied to the Leader’s Statement and commented on the issue of climate change and how the Council should help; the Parliamentary election held on 12 th December, 2019; the next Leader of the Labour Party; the future for local government under the new Conservative Government; leaving the EU; devolution for Yorkshire, and that help was needed for the City as a whole and not just the City Centre.
Agreed – That the Leader’s statement, and the responses to that statement, be noted.
89 QUESTIONS (WITH WRITTEN NOTICE) TO THE LEADER OF THE COUNCIL, MEMBERS OF THE CABINET, CHAIRS OF COMMITTEES AND OTHERS
Councillor Petrini asked if the Portfolio Holder for Operational Services could reassure her and her Ward Colleagues that the Council had a robust plan to sort the ongoing issues of fly- tipping in the City, and how it affected ten-foots and private alleyways?
The Portfolio Holder for Operational Services replied that fly tipping was a national problem, but in Hull there was a quicker response time than most. There was also a free bulky item collection service and ‘bring out your rubbish days’ as part of that service. In addition Street Scene currently removed the vast majority of fly tipping within 48 hours of receiving the request. Even during the busy post-Christmas period Street Scene still maintained this removal timeframe. Street Scene would actively enforce against fly tipping where evidence was available. The removal of fly tipping from private land; ten-foots, and alleyways was the responsibility of the landowner.
Councillor Ieronimo asked if the Portfolio Holder for Economic Investment, Regeneration and Planning, Land and Property could please
Page 9 of 324 135 explain wh y the CCTV on Bethune Avenue had been out of order for almost a year now?
The Portfolio Holder for Economic Investment, Regeneration and Planning, Land and Property replied that this was a bit of a tale of woe. The planning permission granted for the new housing development did not include a condition on the developer to relocate the camera from its original position where the new access road needed to be built. Eventually, the developer did relocate the camera pole to a new location. When the scheme was finished, it turned out it had to be in the middle of the new foot path. The KCOM fibre connection required was never completed because of an adoption issue. It was protected under a Section 38 Notice, which prevented the digging up of the new footpath. He was obviously looking to resolve this with new options made available through the Smarter Cities platform and partners. He was guessing it would be some sort of wireless model to save them digging up the path. Due to the present position of the camera pole a meeting was being arranged with Councillor Ieronimo to see if alternative locations could be found to re-site the camera. So he thought there were some lessons to be learnt for all of us here. He would also work with his colleagues in the Planning Service to try and hold developers’ ‘feet to the fire’ to ensure those things were done at the front end, rather than try to be rescued at the back end.
Councillor Fudge ask if the Portfolio Holder for Operational Services could update the Council on the impact of the Litter Enforcement Teams in the City following their implementation at the beginning of January, 2020?
The Portfolio Holder for Operational Services replied that the new team was in place and enforcing from 8 th January, 2020. In the first five days 150 fixed penalty notices were issued to litterers in areas including the City Centre; Old Town; Anlaby Road, and Beverley Road. The rollout had been accompanied by a comprehensive awareness campaign and widespread positive media coverage. As a l ocal Councillor, people were asking her if the Teams were going to go on to the estates. Yes they were. Currently, the Council was going to concentrate on the City Centre fist
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because there were a lot of tourists coming to Hull. If the City Centre was filthy, with rubbish all over, they were not going to spend in the shops. Just before Christmas she went up to Manchester. She had to say, in the City Centre, where the Christmas Market was, it was filthy. There were bottles and cans around and it was absolutely disgraceful. So as a City, we could hold our heads up and say we were one of the cleanest cities in England.
Councillor Greenhill asked if the Leader of the Council could outline specifically what action had been taken since signing up to the Climate Emergency in March, 2019, to improve the environment in Hull? Could the Leader of the Council elaborate on what the plan was for tackling the Climate Emergency in Hull for 2020 and beyond? Could the Leader of the Council explain what actions had been taken to work together with the East Riding of Yorkshire Council to cooperate on tackling the Climate Emergency?
The Leader of the Council replied that it would be helpful if the relevant Portfolio Holder answered this question. However, he would just like to say, in terms of the legitimate questions asked, that there was a long and detailed answer to them. He would, after the Council meeting, make sure that Councillor Greenhill received that answer. The Portfolio Holder for Neighbourhoods, Communities and Environment had been working on this with real vigour, and he would ask the Portfolio Holder to answer some of the points that had been made. The Portfolio Holder for Neighbourhoods, Communities and Environment explained he was going to try and answer the question, in fact the three questions. He hoped that the Lord Mayor would allow a bit of breathing space with the answers. A cross-Council Officer Working Group had been established to review the current actions and business plans; produce the Carbon Neutral 2030 Strategy due to be considered by Cabinet, hopefully be in February, 2020, and included in the Capital Programme, and develop a number of ‘invest to save’ programmes that would significantly reduce the Council's carbon production footprint. The Officers had visited a number of local authorities to identify best practice. An external assessment of the Council's consumption of carbon
Page 11 of 324 137 through the purchase and supply of goods and services would be commissioned to develop the appropriate commissioning arrangements to reduce the Council’s impact on the environment. The Council was participating in regional programmes to explore the options to introduce fiscal incentives for homeowners and businesses of changing behaviours. It had completed market research to identify the people's power and to identify residents’ concerns and support for addressing climate change. The Council would continue to develop the District Heating Programme, working with private and public sector partners, along with the Government for success. It would continue to work with East Riding Yorkshire Council; Yorkshire Water; the Environment Agency, and other Public Sector partners, in addressing the flooding aspects of climate change, through the Living With Water Programme. The Council had established a Working Group with Natural England; the Environment Agency, and the University of Hull. This had been very helpful to look at natural solutions and solutions for carbon sequestration. It actively supported the City Centre green power survey carried out in April last year, using the schools and young people from across the region to highlight environmental friendly and engineering skills for the future. The Council worked closely to deliver the Northern Powerhouse Energy Conference in November of last year, which attracted over 700 public and private sector individuals into Hull. Going forward, the Council would be working closely to support the delivery of a Net Zero Commission, which would make a significant contribution to the Energy Charter of local industries as part of the Humber Energy Strategy; develop maritime projects; develop a new building with a near net zero carbon at the North end of the shipyard, and increase the number of electric vehicles in the Council’s fleet. The Council had retained its Green Credit accreditation for the Council’s Environmental Management System and invested in the environmental year for the seventh year. He added that the East Riding of Yorkshire Council had not declared a climate emergency. He was not sure if Members were aware of that but obviously that did cause problems. So that was part of his answers to what was happening. It was a massive programme. It was something that would obviously keep on coming back to this Chamber.
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Hopefully, everyone would get on board. He understood that there were other questions which he would respond to later on.
Councillor Langley asked if the Portfolio Holder for Economic Investment, Regeneration and Planning, Land and Property could tell the Chamber what the future of train services would be in Hull for those services currently operated by TransPennine Express and Northern Rail, with a note to the news that the Government may scrap their franchises?
The Portfolio Holder for Economic Investment, Regeneration and Planning, Land and Property replied that the Transport for the North Board was also co-partners of sorts to the two franchises that covered the Northern area effectively from the M62 corridor area up to Newcastle. Those services were currently undertaken by TransPennine Express and Northern Rail. It was fair to say that the Transport for the North Board, on which he represented this Authority, didn't have the ability to call time on those franchises only the Secretary of State did. However, the Rail Minister was always at the Transport for the North Board, and the Board was loud and clear over its unhappiness about the reliability of those two franchises. For some time, the Board had been saying clearly from its perspective, it was not good enough. At what point did you stop telling people off and take action? Well, it was fair to say that Grant Shapps, the new Transport Minister, had said that enough was enough. That was about time. It was long overdue in the Board’s view that the Government was going to make a decision on the Northern franchise. He thought it is fair to say that might be more due to the financial difficulties that surrounded the Northern franchise and not just the issue of reliability that the Board was particularly concerned about. What he would say about the two franchise companies was that not all the delays were their fault. Some of it was the woeful infrastructure in the North and the lack of investment over many years compared to the South. So, he thought it was really important to put that on record. A lot of it, over and above those delays was caused by pinch points around Manchester, were very much down to the way those franchises were being operated. Only before Christmas, the City was celebrating a new
Page 13 of 324 139 rail service between Hull to Halifax, so credit where credit was due. That's good news. The City has been faced with appalling reliability over Christmas. He understood that this meant that there would be a decision made on the franchises before the end of January. The Labour position, and he couldn't speak for the Opposition, was very much that those franchises had lost the right to run those services and should be back in public control. In a sense Transport for the North Board would actually have some teeth, and would be held to account for the running of those trains. That was actually the case for the Northern franchise. Also the position of the Transport for the North Board, when consulted on its preferred route, would be if Northern when we're no longer able to run the franchise, which was called an ‘operator of last resort’. This would mean that the Government would run the franchise. There would be no hiding place for the Transport for the North Board. It would be accountable for those trains, and would be judged on their performance. At this moment, the Board was sort of held semi responsible, but they were not the people that held the leads.
Councillor Akbar asked if the Portfolio Holder for Economic Investment, Regeneration and Planning, Land and Property could provide an update from the Transport for the North Board on the issues regarding the Northern franchise and did the Portfolio Holder agree that the franchise should be stripped and provided by the Government, like in the case of the London and North Eastern Railway (LNER)?
The Portfolio Holder for Economic Investment, Regeneration and Planning, Land and Property did see that the question from Councillor Akbar said that the franchise should be stripped and provided by the Government, like in the case of LNER. As he had said before, that was the whole Labour position. He was really pleased that that was articulated, as it may well be the position of other parties present. If you looked at the LNER situation briefly, you had a service that was making millions of pounds profit. Yet the Government insisted, on the issue of political dogma, in forcing the reprioritisation of that service to Virgin Stagecoach, who then gave the keys, the franchise, back because they were unable to make it profitable.
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LNER had been operating it and seemed to be doing quite a good job as far as he was concerned. Obviously, without the subsidy that Virgin used to get for running that service. So there was a proven model with LNER that, actually, when the Government did run a train service it could run it quite well. If you face that, and compare that with the Northern franchise. Well, there had been an industrial relations disaster, where they treated their workforce terribly in terms of issues such as guards on the trains. All it took was the intervention of the Transport for the North Board and a more sensible Minister. There were about five Ministers in the last year, but one of them was quite sensible. The result was that the dispute was resolved. What that said to him was, that it's not difficult to do this things when you have decision making locally available in the North. The key players could get around the table and you could, in a sense, have sensible local decision making. So, let’s do that for the entire rail franchise. Let's give Transport for the North powers to do that. What Transport for the North currently does was scrutinise performance, and make representations. It would be much better to scrutinise performance and do something about it when the performance wasn't up to scratch. The point he always made on behalf of the Transport for the North Board, was Hull was not like Leeds and Manchester, with its traffic jams and overcrowded trains. People going to and from Hull did have a choice. If everyone was serious about engineering a modal shift of people out of their cars and on to the train, the trains had to be reliable and turn up occasionally. They needed not to be as overcrowded as they were, because, if you couldn 't rely on a train, people would choose another route, and that was terrible. Following on from the last question, about climate change, he was serious about climate change. We knew a train journey generated about five times less Co2 than a car journey. So, what needed to be done was get more people onto trains. They had to be reliable, so let’s have those franchises back with the Government, with Transport for the North having visible powers for the North.
Councillor Ross asked if the Portfolio Holder for Operational Services could explain what new initiatives were planned to tackle the continued blight of fly-tipping in the City?
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Could the Portfolio Holder ask Managers to reiterate to staff who were clearing reported fly- tipping that they should clear all items in a fly- tip and not just a specific item that had been reported?
The Portfolio Holder for Operational Services replied that the Love Your Street Teams were actively working with residents in hotspot areas to tackle fly tipping. Street Scene was also proactively targeting hotspot areas by removing fly tipping before it was reported. The Teams would remove all items of a fly tip when attending unless some items were on private land, which then became the responsibility of the landowner to remove.
Councillor Chaytor asked if the Portfolio Holder for Economic Investment, Regeneration and Planning, Land and Property could update the Council on the current take-up on the City’s unique Kids and Teenagers (KAT) Card which offered much cheaper bus travel to local young people?
The Portfolio Holder for Economic Investment, Regeneration and Planning, Land and Property replied that he thought this was something we didn't brag about enough as a Council. The KAT Card was a unique sort of national initiative where the City’s two bus companies, unlike in other parts of the country, were actually cooperating fully with the City Council around something that benefited the City’s young people, the KAT Card. The City Council put some money in as a subsidy to keep travel affordable for young people in the City. When the City Council first launched that as a budget initiative, we met after the first month or two because we were a bit worried because only 77 of the cards had been sold. We thought, well, that's not very good. So, we had a meeting, and launched the scheme in the ‘Love Hull’ magazine. Overnight the take up doubled. After the next edition, it sort of trebled. The KAT Card was first issued in 2018/19. Now we're predicting that the sales will go up by 1500% from that original 77, in a period of time we are into now. We are talking about thousands of sales a week. So for September to October, we were talking about 3000 sales a week, which meant that we had a difficult but nice problem. It's a nice problem for Members
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and a difficult problem for the Portfolio Holder for Finance and Transformation and the Director of Finance and Change Management. What that had meant was that the level of subsidy required to support this very worthwhile initiative was going up. This meant it was burning through, he was afraid to say, even more of those fines from the bus lane cameras to pay for and subsidise transport for young people. However, this was a fantastic initiative. The latest figures were, as recently as April/May, 1,000 per week. September/October last year, 3,000 a week. So, that showed it was a really good scheme. What it did mean was that college might be an option for some young people that were saying, ‘well actually, I can't get into college every day’. It's a really, really important scheme. The cost was fixed at £10 per week because some college courses were not five days a week. It's still cheaper if you travel 3 or 3½ days a week. So, it’s a really good initiative and one that this Administration would continue to support in its budget. When it was put forward, he hoped that it would enjoy cross party support because it was a really good thing for Hull and a national exemplar.
Councillor Ross asked if the Portfolio Holder for Operational Services could please explain the rationale for allocating up to 85% of the time for the new Litt er Enforcement Team to the City Centre? Would the Portfolio Holder not agree with him that a fairer distribution of the time on this project would be of benefit to communities across the City, particularly in the City’s many local community high streets like Newland Avenue and Beverley Road?
The Portfolio Holder for Operational Services replied that the Contractor was required to spend a minimum of 15% of their time enforcing in areas outside of the City Centre, arterial routes and busy shopping areas. The local community high street would therefore benefit from regular enforcement activity. Indeed, fixed penalty notices were issued on Beverley Road during the first week of operation.
Councillor Matthews asked if the Portfolio Holder for Neighbourhoods, Communities and Environment could give some detail about the partnership working this Council had
Page 17 of 324 143 undertaken through its Area Teams with the British Council in relation to the ‘Active Citizenship Programme’ and how this may benefit Wards such as his Ward of Orchard Park?
The Portfolio Holder for Neighbourhoods, Communities and Environment replied that this Council was the first local authority to enter into this strategic partnership with the British Council. As part of this, new coordinators were being trained with specialist toolkits on engagement. This affected all Wards in the City. Four members of staff had been sent to Sri Lanka and Ethiopia; completed the training, at the British Council’s expense, and they had done that nowhere else. A targeted approach was planned to embed the training into the community. Orchard Park, as he understood it, had a Polish community and they were going to be engaged. The vision was that this would be community led social action projects, which would result in better community resilience and cohesion in the City.
Councillor Greenhill asked if the Portfolio Holder for Neighbourhoods, Communities and Environment could list the organisations, agencies and consultants that the Council was utilising and communicating with for professional advice for tackling the Climate Emergency?
The Portfolio Holder for Neighbourhoods, Communities and Environment replied that the response from the service area was as follows: Anthesis; University of Hull; Tyndall Centre; CDP; University of Leeds; Place-Based Climate Action Network; ARUP; Environment Agency; Natural England; Hull and East Riding Local Nature Partnership; Heat Network Delivery Unit; Carbon Trust; Energy Systems Catapult; Connected Places Catapult; Northern Powergrid; Northern Gas Networks, and National Grid Energy Futures.
Councillor D. Thompson asked the Portfolio Holder for Culture, Leisure and Tourism that over recent years Hull and the surrounding area had benefited from a significant boost in tourism and related events. Could the Portfolio Holder provide an update on whether this
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success had continued?
The Portfolio Holder for Culture, Leisure and Tourism replied that the latest volume figures for the local visitor economy showed substantial growth. The events programme across the City continued to expand and further events had been announced. These included the Trinity Live events and the midweek Bonus Arena shows. He had, all this year met and greeted tourists from all over the country, coming to this great City. They would then take their experiences back to their relative cities or towns and introduce Hull to their family members. They were very impressed and more and more visitors were coming to see what the City had to offer. The City’s fantastic Tourism Team had been recognised nationally, and had been nominated for a very prestigious award for best Conference Team, which would be presented in London next month. He would keep his fingers crossed for another award.
Councillor Greenhill asked if the Portfolio Holder for Economic Investment, Regeneration and Planning, Land and Property could explain what the Council was doing to apply pressure on Yorkshire Water to get Walton Street reopened? Could the Portfolio Holder also share, if they had it, Yorkshire Water’s future plans of maintenance for the City’s sewer network?
The Portfolio Holder for Economic Investment, Regeneration and Planning, Land and Property replied that this was something that had been raised here before. He thought that there might have been a Council motion passed on this before. Everyone knew the issue, that Yorkshire Water did not have a planned investment programme. What that meant was that they mended when things broke down. It was absolutely ludicrous in this day and age that a public utility company could get away with this. It was not just Yorkshire Water, but most water companies nationally got away with being surprised that hundred year old pipes did break. That shouldn't have come as a surprise to anyone, but it seemed to come as a surprise to Yorkshire Water. In fairness to Yorkshire Water and some of the other water companies, they did last time put forward a programme of planned
Page 19 of 324 145 maintenance repairs. However, they wanted to jack up the price of the water bills to pay for it, which was rejected. He understood that Yorkshire Water had now put maintenance programmes in place for the foreseeable future. Obviously, Ofwat was considering that request and would make their decision soon. The ongoing results of this lack of investment were places like Walton Street. The Council’s Street Scene staff and the people doing the repairs for Yorkshire Water had been on the streets. The Council was continually trying to hold Yorkshire Water’s ‘feet to the fire’ to see what repair works were required for Walton Street to be opened. The remedial work Yorkshire Water had to undertake was complex. It included replacing the failed road surface and the damaged sewer below, as well as an un-related clean water leak. He was to attend a further meeting on Friday to examine the options for Walton Street, so no further update could be provided until post that meeting. He suggested that would go to the relevant Area Team and Ward Counsellors. Obviously, Councillor Greenhill could have a copy of that update, and perhaps he would circulate a copy to all Members. Obviously, the Labour Group would support the proposal to bring the water industry back in to public accountability and public ownership. Following the election, the Council had, at the very least, to continue to press the Government to ensure that you couldn't have utilities without a basic maintenance repair programme.
Councillor Akbar asked the Portfolio Holder for Culture, Leisure and Tourism if there had been significant improvement works carried out, or planned to begin in most of our leisure centres, baths and parks? Could the Portfolio Holder update the Council as to the refurbishment of Ennerdale and the likely re-opening timescales and what the plans there were for other facilities?
The Portfolio Holder for Culture, Leisure and Tourism replied that lots of good things were going on in the City. Ennerdale was near completion and the handover date would be 28 th January, 2020. That would be just to the swimming clubs. The rest would be handed over next month hopefully. Over the months he had made three visits to this site. A local firm, Hobson and Porter, was the main
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contractor with our very own Kingstown Works Limited (KWL) doing all mechanical services. The venue had a new reception area, with LED lighting fitted. The main work had been done behind the scenes, with the of renewal boilers, electrics etc. Also in the programme, we are hoping to get scaffolding up at the Beverley Road baths this month, as the roof wa s in a poor state. We will then close down Beverley Road Baths for the summer works to take place. They will reopen 2021. We then move on to Albert Avenue Baths when we will start those fantastic improvements. Everything was working well and we were well into our phase two with phase one nearly complete. We have the reasons why phase one isn’t complete, and are dealing with them. The most work was being done to East Park, with a new play area and other works to the Park due to start soon, with another local firm to do this work. The Splash Boat work had started and hopefully it would be open before the summer holidays. Finally, the water feature, He assured Members that the youngsters would be getting great pleasure from this new, safe, play area. It used water jets on a similar method as the one in Queen Victoria Square. He was told that the water feature was the only capital spend that the opposition did while they were in power. It had been closed for a number of years, but the Labour Group was to invest £850,000 to bring this back in to use.
Councillor Burton asked what assurances and evidence the Portfolio Holder for Finance and Transformation could provide that the East Riding Pension Fund, used by Hull City Council, was invested into ethically sound organisations that were also environmentally- friendly?
The Portfolio Holder for Finance and Transformation replied that he didn't know what assurances he could give as it was difficult to give evidence other than the facts as they actually we re. The East Riding of Yorkshire Council were the administrating body for the Pension Fund. They had to operate primarily for the benefit of the people that actually invest in the Pension Fund, which was administered by the actuaries. So, it's generally the actuaries that show where the funds had gone. The Pension Fund and its Investment
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Managers considered whether environmental, social and governance (ESG) considerations had a material impact on the value of the Fund’s investments. He didn't know which way to look at that, whether it's a detrimental impact or a positive impact. As a result, consideration of ESG factors was incorporated into its Investment Manager’s processes. The Fund would take non-financial considerations, including ESG, factors into account in the selection; retention and realisation of investments. The transition to local carbon world was complex, and required significant changes across public policy, business, finance and technology, as well as the incumbent fossil fuel industry. Through the Investment Managers and naturally through the local Pension Fund Forum, the Fund supported engagement with fossil fuel and utility companies to transition their businesses. So, they were actually working with them to try and change. However, there was another problem that had reared its head. The changes that had been made to Local Government Pension Regulations in 2015 required all Local Government Pension Funds to pool their investments so that they could be jointly managed to fulfil the requirements of the regulations. The East Riding Pension Fund had formed the Border to Coast Pension Partnership with 11 other Local Government Pension Funds. So it was just an absolute monster now. It was really difficult that we would receive little or no feedback whatsoever. When you think that three major Councils had fed in to the East Riding Pension Fund. Now they were to add on another 11 Pension Funds. It's really difficult for your voice to be heard because it's become so big. Through the Fora we hope that will come a material change.
Councillor McMurray asked if the Portfolio Holder for Economic Investment, Regeneration and Planning, Land and Property could update the Council about the information screens in the Transport Interchange?
The Portfolio Holder for Economic Investment, Regeneration and Planning, Land and Property replied that he knew that the railway station was in Councillor McMurray’s Ward and it was Obviously a concern to not just Councillor McMurray’s residents, but lots of residents throughout the City. He didn't know if people realised, but when you
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came across one of those bus stops on the streets with a time of when the next bus was coming, that was in real time. So that was updated with delays in mind. Whereas when you were in the Bus Station looking at when the next bus was coming, it wasn't in real time. It was just an electronic version of the timetable. So, if the bus was late, you were stood there thinking it says it's here but it isn't. So, what the Council had committed to doing was making the Bus Interchange screens ‘real time’ like the ones for the trains. So, when it said ‘train running 20 minutes late’ like it always did, you knew that it was in real time. So, it would be the same for the buses, but hopefully with more reliability. What was happening in the meantime was that the old information screens had started to fail. It would appear that they were being supported by a very old version of Windows or something that was no longer supported. So, you they had to be cannibalised or order special parts from one or two firms, to come out and mend the old ones. It seemed to have got to the point where you were actually better off just throwing your money into the new commission, which was what the Council had done. So, there wa s a new commissioning process. He was assured following his discussion with the Officer about this. It would definitely be by the end of the financial year, but it should be a lot, lot quicker than that. He wasn't prepared to give that data they gave him today because he felt that he could slip slightly when you were dealing with the installation of new kit and equipment. His understanding was that it was out to tender as we spoke and it was a quick turnaround tender. The delivery partners had said it would take two to three weeks to fit once they had received the order. In all honesty, because we were in January, he thought they were telling us end of February/March, and certainly no later than the end of the financial year. Members could rest assured that they would get their accurate bus times. So, if your bus was running late, or there was an issue, you'll get to know and you won't be looking at a screen wondering why it's not there. This was what we wanted, ‘real time’, as it was only with ‘real time’ and accuracy that would help people make the modal shift onto public transport.
Councillor Collinson asked if the Portfolio Holder for Economic Investment, Regeneration
Page 23 of 324 149 and Planning, Land and Property c ould please explain why many of the railway embankments in Hull had become overgrown and what the Portfolio Holder planned to do about this or what pressure they could put on Network Rail to take action?
The Portfolio Holder for Economic Investment, Regeneration and Planning, Land and Property replied that the embankment land was actually owned and maintained by Network Rail. Therefore, the Council could not undertake clearance. He would tweak that slightly and say, yes, you could potentially. He knew of bits in Newington and St. Andrew’s where the border along his Ward, had often been cleared by Community Payback. You had to have a lot of rail personnel on site to supervise that while you were clearing the inner edges of some of those embankments and areas. So, it was not an easy process and, quite rightly, when you're dealing with a working railway. There were lots of safety considerations and lots of processes to go through. There was a regular Rail Forum meeting and a rail Scrutiny Meeting where those issues could be raised with Network Rail. He knew in some Wards, like on Ella Street, you actually find the railway had let sites on those embankments to residents for rent. They kept them up and they actually make them quite good areas and quite good natural habitats. For some of the areas he thought Councillor Collinson was talking about, the Council would have to have that discussion with Network Rail. Councillor Collinson was right, it was a regular bane for both Councillor Petrini and others. There was a particular walkway which was quite disgusting in the Ward he represented and most of the rubbish wa s on the rail side of the fence. It was a real frustration to residents. So, he shared Councillor Collinson’s concern. If we raised those issues with Network Rail, we could certainly put them under some pressure. We could also use our leverage with the Transport for the North Board if we didn't get anywhere. He thought Councillor Collinson was right, it was dragging the City down. Members also had to be mindful that they were good areas and natural habitats. So we needed to perhaps get Network Rail to manage them because that would be a good way of adding to the City's biodiversity.
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Councillor Herrera -Ric hmond asked if the Portfolio Holder for Neighbourhoods, Communities and Environment agreed with the St. Andrew’s and Docklands Ward Councillors that the Section 222 Order needed renewing to give the Police powers to enforce against the issue of street prostitution on Hessle Road? Did the Portfolio Holder also agree with him that more enforcement from the Police was needed to stop this issue escalating again?
The Portfolio Holder for Neighbourhoods, Communities and Environment replied that he did agree. Ward Councillors, the Police and the Local Authority had a range of existing powers to tackle prostitution. Section 222 was put in place to tackle the clients of sex workers as well as the sex workers themselves. The Council could use Adult Support and Protection legislation to compliment Section 222. The Police were taking steps to tackle those who procured services from sex workers, in an attempt to remove the demand for this trade. Ward Councillors had spoken to him on several occasions about this particular problem. He knew they would welcome additional Police resources to support the enforcement of Section 222 to tackle those who acted as both ‘pimps and punters’, which the Council would continue to do so.
Agreed – That the questions and answers be received.
90 COUNCIL TAX BASE 2020/21 Director of Finance and The Director of Finance and Transformation Transformation (Section 151 Officer) submitted a report which explained how the Council Tax Base for 2020/21 had been calculated and the timetable required to meet the statutory requirements of the Local Government Finance Act, 1992, as amended by the Local Government Act, 2003, and the Local Government Finance Act, 2012.
Moved by Councillor Webster and seconded by Councillor Brady:
a) That the calculation of the Council’s Tax Base, the equivalent number of Band D properties, for the year 2020/21 be
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approved, and
b) that, pursuant to the report and in accordance with the Local Authorities (Calculation of Tax Base) Regulations, 2012, the amount of Band D equivalent properties calculated by the Kingston upon Hull City Council as its tax base for the year 2020/21 shall be 62,554 .
Motion carried.
91 CONFIRMATION OF ARTICLE 4 DIRECTION Director of RELATING TO SMALL HOUSES IN MULTIPLE Regeneration OCCUPATION
The Director of Regeneration submitted a report which asked the Council to confirm the immediate Article 4 Direction(s) made in respect of the removal of permitted development rights to change from a dwelling house (C3) to a small house in multiple occupation (C4).
The Direction(s) was made under Article 4(4) of the Town and Country Planning (General Permitted Development) Order, 1995, as amended. That would ensure that such development would require permission to be granted for it on an application made under Part III of the Town and Country Planning Act, 1990, as amended.
Moved by Councillor Black and seconded by Councillor Hale:
That the Article 4 Direction(s), attached to the report, relating to the removal of permitted development rights for the change from C3 dwelling house to C4 small house in multiple occupation, as required by Part 2 (6) of the procedure for Article 4(1) Directions, be adopted in to the Council’s Policy Framework.
Councillors Ross and Fareham also spoke on the motion.
Councillor Black then exercised his right of reply on the motion.
Motion carried unanimously.
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92 NOTICE OF MOTION Chief Executive
Moved by Councillor Fareham and seconded by Councillor Webster as an amended motion:
Council notes recent reports in the Financial Times that the Prime Minister wants to locate Civil Servants and new agencies in that amorphous concept "the North". As usual Manchester and Leeds are named along with those countries already benefitting from the Barnett formula.
Talk of an MIT of the North for training more scientists is also mentioned - of course in Leeds.
With the Leeds economy over-heating and property prices not massively below the metropolis Hull and our valued sub-regional partners also have an eminently affordable commuting belt.
Council notes we have yet to have a London Office and are thus on the back-foot again as the well- oiled machines of Manchester and Newcastle will be in pitching.
Council agrees to set up a local Task Force both cross-party and cross-sector to produce a scoping exercise and strategy to promote Hull for Government Departments.
Council believes the idea of attracting national pay scale Civil Servants to help our economy, and also boosting falling student numbers itse lf impacting on our local economy, will benefit the next stage of the City's growth and instructs the Chief Executive to arrange for the scoping exercise to be made so swiftly.
Councillors Chaytor, Abbott, Neal and McMurray also spoke on the motion.
Councillor Fareham then exercised his right of reply on the motion.
Motion carried unanimously.
93 NOTICE OF MOTION Director of Partnerships Moved by Councillor Fareham: and Legal
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Services Council believes if the Civic role is worth keeping it is worth doing properly.
The matter of the how Civic Services are delivered at the Hull Minister has been in the firmament for a while. Whilst some progress may have been made, Council resolves that this matter should remain a priority. Council notes that the Civic Committee is empowered by the Constitution in all matters Civic and therefore instructs the Committee to ensure the situation is resolved.
Moved by Councillor Chaytor and seconded by Councillor Webster:
That under paragraph 19.10.5 of the Council Procedure Rules the above motion be referred to the Civic Committee for consideration.
Motion carried unanimously.
94 NOTICE OF MOTION Director of Partnerships Moved by Councillor Dunstan and seconded by and Legal Councillor Greenhill: Services
Council notes declaring a climate emergency in March, 2019, and setting a target for the City to become carbon-neutral by 2030, the Council notes the pressure climate change is putting on biodiversity in the UK.
Council also notes the recent Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) reports on global species and habitat loss.
Council recognises that we meet our responsibilities under the Natural Environment and Rural Communities Act, 2006, with regard to Managed Sites, and their reporting to the Department for Environment, Food and Rural Affairs, but believes that we must go further at this critical time, before more species are lost.
Council resolves to request that the Overview and Scrutiny Commission creates a Task and Finish Panel to look at the sites we manage and report on
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how the Council can strengthen local protection and enhancement of species, habitats and ecosystems services under available powers; develop recommendations for how the Council can work with key partners and organisations and look at potential new sites, in conjunction with partners and our wider communities.
Councillors M. Thompson, Fareham, Chaytor, Hatcher and McMurray also spoke on the motion.
Councillor Dunstan then exercised his right of reply on the motion.
Motion carried unanimously.
95 NOTICE OF MOTION Chief Executive
(Councillor Hale declared a personal interest in minute 95, insofar as he was the Lead Officer for Children and Asylum Seekers at North East Lincolnshire Council.
Councillor Kennett declared a personal interest in minute 95, insofar as she was a Trustee of Hull Help for Refugees.)
Moved by Councillor Singh and seconded by Councillor (Mrs.) C. E. Randall:
Council believes that the new Brexit Withdrawal Agreement Bill, which sets out plans for the UK’s exit from the EU, has abandoned the commitment made previously to negotiate a new deal for child refugees.
Council notes that the obligation was intended to enable unaccompanied children who have claimed international protection in an EU member state to be able to come to the UK in order to join a relative already living here.
Council further notes that this commitment, which was the result of a campaign led by Lord Dubs; the Labour Party, and refugee charities, will be reduced to merely a requirement to make a statement to Parliament.
Council reaffirms its commitment as a City of
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Sanctuary with a long history of supporting refugees and asylum seekers many of whom have contributed significantly to British society and to our City.
Council requests that the Chief Executive write to the relevant Minister to support Lord Dubs’ amendment and give refugee children a sanctuary within the UK with their families post Brexit.
Councillors Chaytor, Hale, Fareham, Pantelakis, McMurray, Webster, Williams, McCobb, Abbott, C. Randall and Kennett also spoke on the motion.
Councillor Singh then exercised his right of reply on the motion.
Motion carried unanimously.
96 NOTICE OF MOTION
(Councillor Ieronimo declared a personal interest in minute 96, insofar as members of his family and friends had, or would be applying for, EU citizenship.)
Moved by Councillor Ieronimo and seconded by Councillor Burton as an amended motion:
Council notes that EU nationals from the other 27 EU member states are part of our shared communities alongside UK citizens. They are our husbands, wives, parents, friends and colleagues. They are an integral part of a vibrant and thriving Hull community. Since 2016 EU nationals have been repeatedly promised that there would be no change for EU citizens already lawfully living in the UK and would be treated no less favourably.
Council further notes that after three years of living in limbo, their homes and livelihoods are in danger of being threatened by uncertainty, whatever form Britain’s departure from the EU takes. It is concerning to note that The Public Law Project utilised a Freedom of Information request and they found that 89.5% of EU Settled Status appeals to the Home Office were overturned when challenged by the applicant up to September, 2019. According to Home Office statistics up to November, 2019, it
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is concerning to learn that 41% of the EU Settlement applications received only a ‘pre-settled status’, which is a lesser status that does not offer long-term stability or security for applicants. Such findings suggests that another Windrush-like scandal could be unfolding and the Council should not be passive observers to it.
Council also notes that there is no possibility of knowing how many EU nationals need to apply for the EU Settlement Scheme. This is leaving vulnerable and unaware EU nationals at risk of becoming unlawful residents at the mercy of the Home Office’s “Hostile Environment”. Lack of clarity regarding d ifferentiating between EU citizens arriving before and after the UK’s exit from the EU could lead to discrimination in the labour market and may prevent many from accessing the services that they are entitled to.
Council calls for a report to be prepared, outlining how the Council can mitigate adverse impacts on the rights of EU nationals including, but not limited to, advising on what the Council can do to help landlords and employers to be better informed about immigration status and therefore avoid potential discrimination against EU nationals.
Council further calls for the Chief Executive of the Council to write to all non-UK EU nationals identifying them using all appropriate means, such as the electoral register to advise on how to apply for Settled Status. This notice shall inform non-UK EU citizens of any potential consequences of not applying for the EU Settlement Scheme.
Council demands that the Chief Executive writes to the Home Secretary and the three Hull MPs seeking their vocal support for im provements to the European Settlement Scheme, which include:
i. The provision of physical proof of Settled Status that can be used to access services. ii. Confirmation that there will be no changes to the current rights of settled EU citizens by ratifying the Immigration Bill as primary legislation before the EU exit day. iii. Replacing the current European Settlement Scheme with a registration scheme without a deadline where EU citizens are considered
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lawful by default and can request a proof of immigration status only when they are asked to demonstrate it.
Councillors Nicola, Fareham, C. Randall, Langley, McMurray, Ross and McCobb also spoke on the motion.
Councillor Ieronimo then exercised his right of reply on the motion.
Motion carried unanimously.
97 NOTICE OF MOTION Chief Executive
Moved by Councillor Drake-Davis and seconded by Councillor C. Randall as an amended motion:
Council notes that a Universal Basic Income (UBI) has the potential to improve wellbeing and provide another boost to our local economy and share out prosperity in the City by safeguarding its most vulnerable residents. UBI labs have been launched in Sheffield, Liverpool, Leeds and Kirklees in the North of England to explore the viability of the new policy idea in those prospective cities.
Council notes that many residents in Hull currently live in precarious circumstances where they struggle to plan for the future and just focus on surviving week by week.
Council also notes that many who work in either the gig economy or under zero hours contract s lack the job security afforded to previous generations and that even those who may seem be in traditionally safer employment are at the growing risk of redundancy from the increasing use of Artificial Intelligence and automation.
Council further notes that a UBI pilot in Hull would potentially generate additional money into the local economy and so it is in the City’s economic interests to be part of a pilot scheme - it could provide more financial security and stability for its residents during the pilot scheme period.
Council calls for officers to engage with key
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stakeholders in Hull to cooperate in setting up a UBI steering group and to continually be a part of the process of setting up a UBI lab in Hull. The Council would, as part of this, assist a U BI Steering Group to bid for funding in order to setup a UBI lab in Hull with the sole aim of successfully getting the funding to pilot a UBI in Hull.
Council also requests that the motion be referred to the Overview and Scrutiny Management Committee and that the Chief Executive writes to the Chancellor of the Exchequer, Sajid Javid MP, requesting that the Government support piloting a UBI scheme in Hull.
Councillors Langley, Fareham, Burton, Webster, McMurray and Wareing also spoke on the motion.
Councillor Drake-Davis then exercised his right of reply on the motion.
Motion carried unanimously.
Start: 10.00 a.m. Finish: 2.00 p.m.
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Report to:
Council: 27th February 2020
Housing Revenue Account Budget Setting 2020/2021 and Beyond Report of the Leader of the Council
1 Purpose of the Report
1.1 To present to Council: The Leader’s Housing Revenue Account Budget 2020/2021.
1.2 The following Appendices are attached to the report: 1. Detailed budget annexes 2. Rent Policy 2020/2021
2 Executive Summary
2.1 This report sets out the revenue and capital budgets for the Housing Revenue Account (“HRA”) for 2020/2021 alongside indicative forecasts for future years. For the HRA the position is essentially business as usual, with no major changes planned.
2.2 Whilst the Council, in line with housing services across the country, faces a series of difficult challenges over the coming years as a consequence of Government Policy changes, the latest projections and assumptions set out in this report provide assurance that the HRA remains sustainable in the short to medium term. Longer term projections are more challenging and highlight the need for modernisation in order to secure the future financial position and the service is focussed on delivering an appropriate programme of change.
2.3 Within this context it is important to note, however, that the HRA continues to face uncertainty which could impact adversely on future projections. For example, whilst the Council welcomes the ability to raise rents in future following four years of forced reductions, implementation of Universal Credit and our ability to collect income is, and remains, the biggest risk to the financial viability of the service.
2.4 Governmental policy is still fundamentally directed towards social housing being a solution for people for when they need it and only for as long as they need it, with the emphasis mainly being on encouraging home ownership. At the same time the Government is looking to reduce the national £27bn
Housing Revenue Account Budget Setting 2020/2021 and Beyond Page 1 Page 35 of 324 housing benefit budget which will indirectly impact on housing authorities not least through the ongoing impact of Universal Credit.
2.5 The Queen’s Speech included a number of housing commitments initially trailed in the Conservative Party’s manifesto, including the renewal of the Affordable Homes Programme, bringing forward the Social Housing White Paper (expected to set out further measures to empower tenants, support the continued supply of social homes and improve regulation) and the introduction of First Homes – new homes for local people and key workers that will be sold 30% below market price.
2.6 Housing is a long term business – it would not be prudent to look at the budgets over the short term – and present trends need to be taken into account when forecasting for the future. The plan is to manage resources and to put the HRA into the best possible position to respond to the direction of travel whilst at the same time undertaking a thorough review of the housing service both to modernise the existing offer and also to respond to the changes and challenges that continue to emerge.
2.7 This aligns to the Capital Strategy, which requires Local Authorities to demonstrate in the Strategy that capital expenditure and investment decisions are taken in line with service objectives and take account of stewardship, value for money, prudence, sustainability and affordability.
2.8 Significant issues and developments include:
Rents
2.9 As expected, rent levels will increase by CPI+1% each year. For 2020/21 this means rent increases of 2.7%. The policy of CPI+1% is Government Policy for a period of 5 years (i.e. until 2024/25) although it is important to note that we are now regulated by the Regular of Social Housing in respect of rent setting for the first time.
Borrowing & prudential limits
2.10 As stated in the previous years report, the Borrowing Cap was abolished and the Treasury Management Strategy for the HRA remains unaltered & congruent with the General Fund position – that is only to borrow when needed and in the meantime to pay back debt as it otherwise falls due.
2.11 Future borrowing will be covered by the Councils Treasury Management Strategy and in particular Prudential Borrowing limits. As part of that two additional metrics are included in the HRA Budget - Interest Cover Ratio - Debt per property
Universal Credit
Housing Revenue Account Budget Setting 2020/2021 and Beyond Page 2 Page 36 of 324 2.12 The significant impact of Universal Credit is yet to come with full service roll out commencing 12th December 2018, and it is likely that the implications will be highly significant. To date there are over 4,000 tenants who receive Universal Credit and over 3,000 of those are in arrears which have thus risen significantly with at least £1.25m of the increase directly attributable to tenants on Universal Credit.
New Homes & Capital Programme
2.13 A programme of approximately 500 new dwellings is included within the next five years projections.
HMIS Replacement
2.14 The budget still retains a number of contingencies and explicit costs around the HMS replacement programme but as the successful bidder was the current supplier, Northgate, costs around data migration etc. are expected to be lower than would have been the case had the incumbent supplier not won. There are thus a number of savings compared to last years assumptions.
2.15 Timely implementation of the system in accordance with our requirements to allow efficiency gains to be driven remains a key risk for the HRA.
Hackitt Review post Grenfell
2.16 The Government issued its response to the Hackitt enquiry that followed the fire at Grenfell. In addition, there has been a recent fire in student accommodation in Bolton. Taken together these are likely to see the costs of retaining and maintain multi storey blocks increase.
Spend on property
2.17 The Council has now agreed a new contract with KWL for repairs/maintenance with a greater emphasis on price per property & price per void which should free up resources to visit tenants and assess the condition of our properties giving greater visibility of our stock condition and the work that may be required.
2.18 The implications of the new KWL Cost Model are included within the budget. At present repairs and maintenance costs show a £3.8m increase (a mixture of prices, volumes, & standards). The new KWL contract will, however, require some time to bed down and for prices to find a level of stability.
2.19 In addition, it is expected that there will be further pressure on standards following the Homes (fit for human habitation) Act coming into force for existing tenancies in March 2020. This is expected to place a greater onus on the Council in responding to issue around damp and excess cold, although there is presently little or no legal guidance as to what constitutes an acceptable standard.
Housing Revenue Account Budget Setting 2020/2021 and Beyond Page 3 Page 37 of 324
Housing Revenue Account Budget Setting 2020/2021 and Beyond Page 4 Page 38 of 324 3 Recommendations
3.1 The Council is recommended to approve:-
i) The revenue budget as set out in section 8;
ii) The capital budget as set out in 13.1;
iii) The rent and service charge changes as set out at Appendix 1 (11) and 1 (12) respectively; and
iv) The Rent Policy (appendix 2)
4 Reasons for Recommendations
4.1 The Local Government and Housing Act 1989 requires the Council to maintain a Housing Revenue Account in accordance with proper practices. The Council must approve a budget for the HRA that does not go into deficit. There is, therefore, no legal option to not set a budget. The HRA budget must be set during the months of January or February.
4.2 Notice of changes to rent must be given to tenants giving at least 28 days’ notice of the changes coming into force which means that the notice must be in their physical possession no later than 4th March 2019.
4.3 This report enables the Council to fulfil those statutory obligations.
5 Revenue Budget 2020/2021 - Consultation
5.1 Briefing sessions for all stakeholders will take place in late January 2020.
5.2 Discussions re the budgets and scope of work have been undertaken with KWL, as the main contractor, on the future capital and revenue repairs programmes as part of the change management process. The draft capital and revenue programmes have been shared with KWL.
6 Background and Underlying Assumptions and Impact of National Policies and Local Priorities
Background
6.1 The Council presently owns approximately 23,500 homes making it the 10th largest local authority housing business in the country with an annual turnover from rents and other sources approaching £100 million per annum.
6.2 The overall financial strategy for the Housing Revenue Account is centred around:
Housing Revenue Account Budget Setting 2020/2021 and Beyond Page 5 Page 39 of 324
- achieving and maintaining the Decent Homes Standard under the stock retention strategy approved by Council in March 2005
- supporting the Housing and Neighbourhood Renewal Strategy
- providing a customer focused and effective repairs and management service; and
- maintaining a sufficient level of balances both as a contingency against risks and to ensure that investment can be sustained over the 30 year business plan.
National Policies
Universal Credit
6.3 Full roll out of Universal Credit in Hull commenced in December 2018 although those areas of Hull that fall within the Hessle Job Centre catchment area went live in July 2018. From that date, all new claims for means tested working age benefits administered by the Department for Work and Pensions (“DWP”) will be for UC. In transaction terms alone this means an additional half million payments need to be processed compared to Housing Benefit. Universal Credit is a major risk to the organisation, and when fully rolled out will require officers to proactively collect an additional circa £35 million per annum, previously received in the form of HB. The initial introduction of easier cases has already proven difficult with information from DWP being poor. In addition presently both paper letters and email notifications in respect of all claimants are being received although at full digital rollout it is intended that correspondence should be fully electronic. Moreover information is normally received after award and there has been some confusion with a number of tenants stating they have no housing costs during the claim process and thus receiving no housing element of universal credit. There are also seeing difficulties with tenants gaining advance payments of UC and using the funds to repay other debts. This advance amount is usually repayable over 12 months and reduces their ongoing award meaning payment of rent is more challenging than it might otherwise be.
6.4 To date, the level of arrears for those tenants on UC (or at least those that are known about) compared to tenants on average are as shown.
Housing Revenue Account Budget Setting 2020/2021 and Beyond Page 6 Page 40 of 324 £500.00 80.0%
£400.00 60.0% £300.00 40.0% £200.00 £100.00 20.0% £0.00 0.0% Universal Credit All Tenants Working age Cases tenants
Average £ % in Arrears
6.5 The expectation is that over the next four years we will build towards a total number of UC cases of 10,000 (bearing in mind the existing ones are the more straightforward cases) which could see arrears levels reach wholly unstainable levels potentially approaching £7½m to £8½m, alongside the risk of increases in evictions. This, of course, assumes that there are no changes to the underlying scheme.
6.6 In terms of mitigating actions the Council has also procured RentSense, a cloud-based software solution which uses algorithms to analyse payment behaviours, aggregate trends, highlight risk and provide predictive intelligence. The RentSense intelligence is unique in that it automatically establishes and analyses tenant transactional patterns without manual user intervention. Using RentSense results in a more accurate streamlined workload of rent arrears cases for Tenancy Officers to manage whilst enabling earlier intervention to support tenants who are struggling financially. In addition we have procured Processflows, an automated dialling service that should further releasing staff resources to focus on the more complex and demanding rent and UC cases.
6.7 Discussions will take place with Northgate around their offer for account analytics software which is presently in development with an expectation that this may replace RentSense in due course.
Hackitt Report
6.8 In June 2019 the Government issued its consultation document in response to the “Building a Safer Future”, the Independent Review of Building Regulations and Fire Safety completed by Dame Judith Hackitt (following the Grenfell fire incident in June 2017). The consultation document supported the recommendations of Dame Judith Hackitt but went a step further and consulted on all residential buildings of 6 or more storeys or 10m high.
6.9 The standards including: - An holistic building ‘system’ approach for safety and fire management - Risk based approach to management - Clear roles and responsibilities including leadership with the creation of statutory duty holder roles
Housing Revenue Account Budget Setting 2020/2021 and Beyond Page 7 Page 41 of 324 - Tenant voices and participation - Transparency in provision of information - Building files which are all encompassing to Building Information Modelling standard (BIM) which will require submission to an external body at periodic intervals or following significant events - Competence of all in the building safety management system (including contractors) - Clear procurement based on safety rather than cost - Standards and testing of products manufactured, supplied and used - International Examples
6.10 As part of a document published alongside the Queen’s Speech, the government said it would ensure that an “appalling tragedy like Grenfell could never happen again” and bring in the relevant legislative recommendations of the Grenfell Tower Inquiry phase one report.
6.11 The results of the phase 1 inquiry identified failings in building refurbishment, information management and the emergency planning and handling response of the fire service and building owners/management company.
Future rent increases
6.12 The Regulator of Social Housing has recently published the final Rent Standard for 2020/21 which allows for rent increases of up to CPI+1% up to 2025/26, although there is no certainty as to what the rent regime might be beyond that date. The business plan fundamentally requires this level of increase to take place to remain viable. This ultimately generates c £4.5m per annum more than rent rises of CPI alone. For the first time the Rent Standard applies not only to housing associations and other private registered providers but to Local Authorities.
Accommodation Standards
6.13 There was a change to the Landlord and Tenant Act 1985 introduced on 20th December which will take effect in March 2019, which was implemented through the Homes (Fitness for Human Habitation) Act 2018. This introduces implied covenants into the tenancy agreement that properties will be fit for human habitation at the start of and throughout the tenancy, specifically concerning repair; stability; freedom from damp; internal arrangement; natural lighting; ventilation; water supply; drainage and sanitary conveniences; facilities for the preparation of food and disposal of waste water. Whilst in essence this adds to the landlord obligations already for structural repairs there is scope for increasing & more comprehensive disrepair claims.
Affordable Housing & New Builds
6.14 As part of the Queen’s Speech the Government indicated that there would be a renewal of the Affordable Homes Programme. The Government has committed to building at least a million more homes over this
Housing Revenue Account Budget Setting 2020/2021 and Beyond Page 8 Page 42 of 324 parliament. Details on how this will be achieved are awaited but there is also expected to be a new £10bn Housing Infrastructure Fund which will provide the roads, schools and GP surgeries needed to support new homes
Social Housing White Paper
6.15 The government has pledged to bring forward a Social Housing White Paper to set out further measures to empower tenants, support the continued supply of social homes and improve regulation. This is expected to be published in the autumn.
Local Issues & Priorities
New Build programme/ Housing Growth Plan
6.16 A report entitled “Housing Growth Plan 17-20 and City Wide Land Strategy” was approved by Cabinet in January 2018 outlining a number of smaller sites to include within an ongoing build programme. The Housing Growth Plan sets out how Hull City Council will facilitate new housing delivery in order to fulfil the objective set out in the Local Plan that an additional 620 new homes are built per annum for the plan period. The report also sets out the proposed approach to land owned by the Housing Revenue Account (HRA) and how this will be used to deliver housing growth and seeks approval for the programme.
6.17 Included within the HRA budget is a programme of nearly 500 properties over five years.
KWL Contract Review
6.18 KWL has undergone the five year comprehensive review during 2017/18 as part of the Housing Repairs & Maintenance contract with the Council. The Executive Commissioning Committee (ECC) received a detailed report of the outcome in April 2018, from the independent Ark consultants which found that the Company’s performance under the Agreement has not failed. Included within the budget are the implications of moving to price per property and price per void. At present repairs and maintenance costs show a £3.8m increase (a mixture of prices, volumes, & standards). The new KWL contract will require some time to bed down and for prices to find a level of stability.
Cladding works and Hull’s Affordable Warmth Strategy 2019-2023
6.19 Hull’s Affordable Warmth Strategy 2019-2023 was approved by Cabinet in November 2018. In the meantime the cladding / solid wall insulation programme will continue with a further £50m of works scheduled to complete the external cladding works.
Housing Revenue Account Budget Setting 2020/2021 and Beyond Page 9 Page 43 of 324 7 Financial Pressures and Savings
Grenfell Tower
7.1 Members will be aware of the tragic fire at Grenfell Tower that took place on 14th June 2017. This has led directly to a national review of all aspects of fire safety in high rise blocks over 6 storeys high. None of Hull’s blocks use the same type of materials as found at Grenfell. We completed an extensive review of the safety and integrity of our blocks last year which did not reveal any fundamental defects and all remedial actions are being addressed. In June 2019 the Government issued its consultation document in response to the “Building a Safer Future”, the Independent Review of Building Regulations and Fire Safety completed by Dame Judith Hackitt (following the Grenfell fire incident in June 2017). The consultation document supported the recommendations of Dame Judith Hackitt but went a step further and consulted on all residential buildings of 6 or more storeys or 10m high.
7.2 The standards including: - An holistic building ‘system’ approach for safety and fire management - Risk based approach to management - Clear roles and responsibilities including leadership with the creation of statutory duty holder roles - Tenant voices and participation - Transparency in provision of information - Building files which are all encompassing to Building Information Modelling standard (BIM) which will require submission to an external body at periodic intervals or following significant events - Competence of all in the building safety management system (including contractors) - Clear procurement based on safety rather than cost - Standards and testing of products manufactured, supplied and used - International Examples
7.3 As part of a document published alongside the Queen’s Speech, the government said it would ensure that an “appalling tragedy like Grenfell could never happen again” and bring in the relevant legislative recommendations of the Grenfell Tower Inquiry phase one report. The results of the phase 1 inquiry identified failings in building refurbishment, information management and the emergency planning and handling response of the fire service and building owners/management company.
Housing Management System
7.4 As outlined later in this report, the procurement exercise to replace the existing Housing Management System has concluded with Northgate Public Services being the successful tenderer. Work is now ongoing to produce the detailed implementation plan.
7.5 Savings in the expected budgets have been achieved in part through prices being lower than expected and because the new solution is cloud-based
Housing Revenue Account Budget Setting 2020/2021 and Beyond Page 10 Page 44 of 324 allowing underlying savings in hardware and maintenance costs. These have been built into the budget and should realise savings of £200k per annum once fully implemented. The contract will last for 10 years.
8 HRA Revenue Budget
8.1 The proposed revenue budget is set out below:
Current Proposed change Budget Budget 2019/20 2020/21
£'000 £'000 £'000 %age
INCOME Dwelling rent income 86,931 89,309 2,378 2.7% Charges for services & facilities 2,831 3,159 329 11.6% Non dwelling rents 1,235 1,257 22 1.8% Leaseholders charge for services 279 406 127 45.6% Other fees & charges 520 491 (29) -5.6% Interest on balances 264 189 (74) -28.2% General Fund Transfer re whole community 819 810 (9) -1.1% TOTAL INCOME 92,878 95,621 2,743 3.0%
EXPENDITURE Repairs & Maintenance 22,416 26,253 3,837 17.1% Supervision and Management 16,194 17,189 995 6.1% Special Services 4,945 5,149 204 4.1% Rent, rates, taxes & other charges 955 921 (34) -3.5% Provision For Doubtful Debt 1,193 708 (485) -40.7% Capital Financing Costs 45,430 54,102 8,673 19.1% Contribution to Corporate & Democratic 305 310 5 1.6% Core Provisions 650 500 (150) -23.1% TOTAL EXPENDITURE 92,088 105,132 13,044 14.2%
Net surplus / (deficit) 790 (9,512) (10,301)
Housing Revenue Account Budget Setting 2020/2021 and Beyond Page 11 Page 45 of 324 9 Rents and Other Income
Rents
9.1 Rent levels will rise by 2.7% (CPI+1%) in line with Governmental Rent Policy. We are now regulated on rent setting by the Regulator of Social Housing for the first time. CPI+1% remains Government policy for 5 years (i.e. to 2024/25).
9.2 An updated “Rent and Service Charge Setting Policy Statement 2020/2021” is included at Appendix 2 which remains substantially unaltered from previous years.
Service Charges
9.3 Increases in service charges are typically tied to increases in the cost of providing those services. Proposed changes to service charges have been set to maintain the link between the costs of providing services and the income derived from them.
9.4 There are two areas where income does not yet fully reflect the cost of those services, these being:
- Caretaking & concierge, where we currently under recover costs by 12% - Communal cleaning, where we currently under recover costs by 14%
9.5 Both of these services, which were already under recovering, have recently seen cost increases driven by increases in the National Living Wage. Above cost increases are planned for the next 4 years to substantially reduce if not eliminate this shortfall.
Garage Rents
9.6 Despite the freezing of garage rents for a number of years, and selective demolitions, the number of empty garages is continuing to increase with just under 42% of garages vacant at present. The programme assumes the ongoing demolition of unviable garage blocks and improvement of the remaining garages, with a capital budget set aside to address these issues.
9.7 Rents are set to rise by 3% in line with corporate income targets. Low demand for garages, however, seems to be caused by a more fundamental issue than rent levels, Our garages are typically too small for modern cars, are poorly lit and many are separate from residential blocks.
Arrears & bad debts
9.8 Arrears levels continue to increase as shown below (although please note that two monthly payments from DWP of APAs in December distort the figures):
Housing Revenue Account Budget Setting 2020/2021 and Beyond Page 12 Page 46 of 324
Current arrears trends 3.3 9,500 3.1 9,000 2.9 8,500 2.7 8,000 2.5 7,500 Nr. £'m 2.3 7,000 2.1 6,500 1.9 6,000 1.7 5,500 1.5 5,000 Jul-19 Jul-18 Jul-17 Jul-16 Jul-15 Jan-20 Jan-19 Jan-18 Jan-17 Jan-16 Oct-19 Oct-18 Oct-17 Oct-16 Oct-15 Apr-19 Apr-18 Apr-17 Apr-16 Apr-15
Level of current arrears £ Number of current tenants in arrears Linear (Level of current arrears £)
9.9 This is common across local authorities, and is especially influenced by the number of tenants on Universal Credit where arrears levels are twice those of other working age tenants. Universal Credit remains a significant risk to the HRA.
10 Repairs and Maintenance
Changes in R&M
10.1 These can be summarised thus:
19/20 20/21 change £'000 £'000 £'000 Day to Day Repairs 5,650 6,364 714 Relet repairs 5,000 6,229 1,229 Gas Servicing & Heating Repairs 2,200 2,323 123 Planned / cyclical repairs 3,512 4,609 1,097 Other Mechanical, Electrical & Specialist Repairs 939 1,025 86 KWL Overheads 4,527 5,028 501 Sundry other costs 338 175 (163) Contingency 250 500 250 22,416 26,253 3,837
10.2 The implications of the new KWL Cost Model are included within the budget and the above costs represent the initial expectations of cost per property and cost per void. . At present repairs and maintenance costs therefore show a £3.8m increase (a mixture of prices, volumes, & standards). The new KWL
Housing Revenue Account Budget Setting 2020/2021 and Beyond Page 13 Page 47 of 324 contract will, however, require some time to bed down and for prices to find a level of stability.
11 Management and Other Costs
HMIS re-procurement
11.1 The budget still retains a number of contingencies and explicit costs around the HMS replacement programme but as the successful bidder was the current supplier, Northgate, costs around data migration etc. are expected to be lower than would have been the case had the incumbent supplier not won. There are thus a number of savings compared to last years assumptions. In addition the solution is a cloud based product rather than onsite thus eliminating the need to maintain and manage equipment directly.
11.2 The new contract has now been signed and implementation plans are being worked on in detail. Timely implementation of the system in accordance with our requirements to allow efficiency gains to be driven remains a key risk for the HRA.
Income management software
11.3 The Council has procured RentSense, a cloud-based software solution which uses algorithms to analyse payment behaviours, aggregate trends, highlight risk and provide predictive intelligence. The RentSense intelligence is unique in that it automatically establishes and analyses tenant transactional patterns without manual user intervention. Using RentSense results in a more accurate streamlined workload of rent arrears cases for Tenancy Officers to manage whilst enabling earlier intervention to support tenants who are struggling financially. In addition we have procured Processflows, an automated dialling service that should further releasing staff resources to focus on the more complex and demanding rent and UC cases.
11.4 Discussions will take place with Northgate around their offer for account analytics software which is presently in development with an expectation that this may replace RentSense in due course.
Document Management
11.5 As previously reported the volume of information received from DWP in respect of universal credit is expected to increase substantially over the next year, albeit most of this electronically. With this in mind, alongside general housekeeping and efficiency measures, the HRA is undertaking an extensive programme of digitising information and installing document management software throughout the coming year. This includes a substantial investment in disposing of redundant information and scanning retained documentation (which commenced in December 2017) such that it becomes available as part of the housing management IT system. Additionally improvements to
Housing Revenue Account Budget Setting 2020/2021 and Beyond Page 14 Page 48 of 324 processes to manage existing information flows including workflow management are being undertaken. Information@Work software has been purchased and is presently being installed
Stock Appraisal
11.6 Work on reviewing stock types will continue.
11.7 In light of the various policy changes and to ensure the viability of the HRA going forward, we have adopted a much more rigorous approach to assessment of our current stock’s financial performance than previously has been the case. This includes monitoring performance across the stock to identify where groups of properties are already or are likely to become unsustainable. There is now a 2 stage annual process. Stage 1 is a high level of assessment of 380 ‘beacon’ property groups covering all stock. A beacon group is defined by the type size and location of a group of properties.
11.8 Stage 1 aims to identify poorly performing groups of properties by using a range of existing data. These property groups identified as underperforming on a range of indicators, are then subject to a more in depth 2nd stage full option appraisal to look in detail at the issues affecting demand for these properties and making recommendations to resolve them and ultimately reducing pressures on the HRA. A focus on poorly performing assets on the basis of their Net Present Value (“NPV”) and other key sustainability indicators will ensure limited resources are allocated in a way that represents value for money and also improves resident satisfaction. It will also ensure that failing assets are addressed at the earliest opportunity.
11.9 The stage 1 analysis is based mainly on historical data which means performance projections may be influenced by factors that no longer exist. For example where recent improvements have taken place to properties improved void rates and repairs will not be reflected in current projections. As a result stage 1 can only be taken as a high level indicator of a group’s performance and stage 2 will examine underlying data in more detail to build up an accurate picture of performance. Trend information will continue to be built up as the whole stock appraisal is built into the annual HRA budget process.
12 Capital Financing
12.1 Cost of capital financing reflects the following elements:
- debt management expenses which are a contribution towards the overall Council cost of managing the debt portfolio;
- interest payable on existing debt and debt premia on debt paid early;
Housing Revenue Account Budget Setting 2020/2021 and Beyond Page 15 Page 49 of 324 - depreciation both on Dwellings and other properties. Unlike the general fund these costs are charged direct to the HRA but can be used in effect to finance capital expenditure (Major Repairs Allowance or “MRA”); and
- repayment of debt which, consistent with prior years and the general fund, is repaid when it falls due with borrowing back only undertaken when there is a need to finance capital expenditure. This has the benefit of saving interest in the short term.
13 HRA Capital Programme
13.1 The proposed capital budget is set out below:
Current Proposed change Budget Budget 2019/20 2020/21
£'000 £'000 £'000 %age
Capital Spend Maintaining Decent Homes 9,841 10,270 429 4.4% Mechanical & electrical 5,637 5,695 58 1.0% KWL overheads 2,000 2,400 400 20.0% Others (inc. client costs) 1,480 1,460 (20) -1.4% Fire Protection Works & other Health & Safety work 3,068 5,041 1,974 64.3% Council House Adaptations 3,255 2,700 (555) -17.1% Empty Properties 2,400 1,068 (1,332) -55.5% Regeneration 779 344 (435) -55.8% Base Programme 28,459 28,978 519 1.8% Cladding 12,077 12,258 181 1.5% New build 10,188 11,308 1,121 11.0% RTB grants 919 729 (190) -20.7% TOTAL EXPENDITURE 51,643 53,273 1,630 3.2%
Maintaining Decent Homes
13.2 Costs in relation to maintaining decent homes standard going forward have been included in line with previous years. This maintains properties in a reasonable state of repair and to the minimum level required of the decent homes standard but does not necessarily meet aspirational standards going forward. Work is included on a planned basis reflecting our understanding of the condition of the stock.
13.3 As part of the changes driven through the change management board we are planning to increase where possible the number of surveys undertaken on our properties to produce more planned programmes – this will take a
Housing Revenue Account Budget Setting 2020/2021 and Beyond Page 16 Page 50 of 324 number of years. For example a target number of surveys would be 20% of the stock (4,800) a year, then the whole exercise will take 5 years.
13.4 The recommendations from the review report also required that we ‘reconsider the Hull Investment Standard to ensure maximum investment in the asset and minimum repair requirements’. To respond to those requirements we have considered a number of levels of investment planning, for example including bathrooms/showers as standard. As detailed earlier keeping to our existing Hull standard which provides a slightly higher standard than the Governments decent homes standard is affordable in the short to medium term, however modelling higher standards results in the HRA going into deficit at a much earlier. Also we need to be mindful of any Grenfell related safety implications emerging from the Hackitt Review or additional environmental costs.
Fire Protection Works
13.5 Costs in relation to replacing cladding, high rise flat and communal doors, sprinklers in bin chutes and other measures including potentially sprinkler, risers and communal fire alarms have been included within the budget.
High Rise Electrical Mains
13.6 The Council has been in dialogue with Northern Power regarding the ownership of electrical mains with tower blocks (& thus where the consequent maintenance responsibility lies) for a number of years. There are a number of blocks where the mains supply terminates at ground floor level where Northern Power assert that the responsibility is the Council’s not theirs, although this is subject to ongoing legal debate which has not concluded. Should Northern Power’s position prove to be legally valid then there is a maintenance liability of £3.75m for these blocks where work would need to be undertaken over the next 5 years. This is particularly prescient now given Grenfell.
Council House Adaptations
13.7 On 22 nd January 2018 Cabinet approved a revised Allocations Policy covering Adaptations which came into force on 1 st October 2018. This Policy means that Council can fairly and cost effectively manage housing stock to meet the needs of individuals who are assessed as needing a tenancy in an adapted property, while at the same time avoiding unnecessary strain on the Housing Revenue Account.
13.8 In addition this budget will also be used to assist with any adaptations that may be required to assist families fostering children – this is mainly expected to be around adapting properties to create additional bedroom space and to cover perhaps 4 properties each year. Costs over and above those recoverable through increased rent will be met by C&YPS.
Children’s Homes
Housing Revenue Account Budget Setting 2020/2021 and Beyond Page 17 Page 51 of 324
13.9 As set out in last years budget the service was working closely with CYPS to deliver 2 new build properties (6 beds each), to purchase 2 4 bed properties and to covert a further 4 3 bed properties. Of the new builds one is currently being progressed and will be completed in 20/21. For the other the site has been identified and will be built in 20/21. 5 of the remaining Staying Close properties have been completed with the final one completing in 20/21.
Cladding
13.10 The budget contains a further £42m of works (20/21 to 24/25) to complete the external cladding work. Work in 2020/2021 primarily concludes most of the remaining works on Bransholme Caspons with works also planned on the 5Ms at Orchard Park. However, it should be noted that the 5M properties are difficult in terms of their design, due to the roof type, hung tiles and other aspects. We have been working very closely with Fortem to come up with a design which is safe, achieves the required energy efficiency savings and most importantly, minimises disruption to residents.
New Build Programme
13.11 The HRA budget includes provision for 480 new properties across the 5 years from 2020/21 to 2024/25 Further details of the sites are contained in appendix 1, section 9.
13.12 In terms of significant sites:
20/21 21/22 22/23 Comments Dane 60 60 Following initial feasibility work, a soft market testing Park/ exercise has been undertaken. Interest from the Isledane market was low and we are now seeking to explore procurement options to bring this land forward. Small 39 68 79 Planning applications have been submitted and sites contracts have been awarded to 4 contractors for the initial phase of delivery. Start on site expected April 2020. Grange 3 9 Transfer of land and contract for Council units is now Road complete. Owing to the pepper potting of the Council units on a mixed tenure scheme the projections are based on the developer’s current programme. First council plot forecast to complete in summer 2020. Preston 10 10 Plans have been presented by the developers at Road pre-application planning committee on 2 occasions and work is now underway to prepare the formal planning application
Right to Buy Receipts
13.13 Cabinet approved a proposal to use surplus Right to Buy receipts that would otherwise have had to be returned to MoHCLG to support other social housing providers build properties in the City. To be eligible providers would have to apply to be on our framework (all Registered Providers being deemed to be on automatically) and would be free to submit proposals each
Housing Revenue Account Budget Setting 2020/2021 and Beyond Page 18 Page 52 of 324 quarter. There are no new extant proposals in 2020/2021 and the budget contains a contingent sum from 2021/2022 onwards. Receipts available would be used on our new build first and only made available to others were they otherwise to be repaid to MoHCLG.
Future Capital Spend
13.14 The graph below shows the need to spend on capital over future years. As members will be aware the locus of the increased spend occurs at the point of replacement of, mainly, kitchens originally installed under the Decent Homes programme at the commencement of the millennium.
£120,000,000 Other Regeneration New build & bringing empty properties back into use £100,000,000 Cladding
£80,000,000 Fire Protection Works & other Health & Safety work maintaining the fabric of buildings £60,000,000
£40,000,000
£20,000,000
£0
14 Treasury Management, Borrowing & Prudential indicators
14.1 The Treasury Management Strategy for the HRA remains unaltered & congruent with the General Fund position – that is only to borrow when needed and in the meantime to pay back debt as it otherwise falls due.
14.2 Given the overall position of the HRA over the next 10 years it is expected that some £50m of borrowing which would otherwise be repaid will be replaced with new borrowing. This will be subject to assessment each year.
14.3 Total expected borrowing is now projected to be:
Housing Revenue Account Budget Setting 2020/2021 and Beyond Page 19 Page 53 of 324 500.00 450.00 Total expected borrowing 400.00 PWLB - existing PWLB - self financing New loans Market 350.00 300.00 250.00 £'m 200.00 150.00 100.00 50.00 0.00 19 / 20 / 21 / 22 / 23 / 24 / 25 / 26 / 27 / 28 / 29 / 30 / 31 / 32 / 33 / 34 / 35 / 36 / 37 / 38 / 39 / 40 / 41 / 42 / 43 / 44 / 45 / 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46
14.4 Further details on borrowing can be found at appendix 1, section 8.
14.5 The HRA has also developed a number of Prudential Indicators – essentially a measure of whether we can afford to borrow more or need to reduce debt levels.
14.6 The two measures picked have been the interest cover ratio, which looks at the amount of interest being paid compared to direct operating surpluses each year compared to (a) the housing association sector where this measure is a typical metric and a target measure of 1.5 for the Council and secondly the average debt per property. Whilst both these measures show a currently healthy position these deteriorate significantly in future years.
14.7 Further details can be found at appendix 1, section 6.
15 HRA Reserves
15.1 Reserves are held for the following primary reasons:
- To cover against the inherent risks in the business such as non- collection of rent and a sudden and increased need to spend (responding to Grenfell being a case in point).
- To fund the future need to spend – in effect to ensure that we can continue to maintain and repair our properties over the coming years, especially needed given the cyclical nature of the spend.
15.2 The graph below shows the projected HRA reserves over the next 25 years.
Housing Revenue Account Budget Setting 2020/2021 and Beyond Page 20 Page 54 of 324 100.0
0.0
(100.0) 2020 /2020 2021 /2021 2022 /2022 2023 /2023 2024 /2024 2025 /2025 2026 /2026 2027 /2027 2028 /2028 2029 /2029 2030 /2030 2031 /2031 2032 /2032 2033 /2033 2034 /2034 2035 /2035 2036 /2036 2037 /2037 2038 /2038 2039 /2039 2040 /2040 2041 /2041 2042 /2042 2043 /2043 2044 /2044 2045 /2045 2046
(200.0) £'m
(300.0)
(400.0)
(500.0)
HRA Reserves Decent Homes Reserve Major Repairs Reserve
15.3 Members will note that should we take no further action then HRA reserves would be negative in around 10 years’ time. It is not legally permissible 1 to have negative reserves and therefore there is a requirement to take further measures that either increase income or reduce costs.
15.4 Whilst this remains a challenging target especially in an environment with significant change, not least in relation to Universal Credit, alongside any further changes to government or local policy, this is still felt to be achievable. Further pressures may emanate from the forthcoming White Paper.
15.5 In addition it should be noted that this report pre-dates the National Budget which could impact upon available funding in particular.
16 Risks and sensitivities
Sensitivities
16.1 The following sensitivities have been modelled alongside the base case - Additional annualised savings of £4m per annum [impact of £167m over 25 years including inflation] - Rent increases of 1% per annum lower than forecast (i.e. CPI rather than CPI+1%) [impact of £31m over 25 years including inflation]
1 Section 76(3) of the Local Government and Housing Act 1989 places a duty on the Authority to prevent a debit balance on the Housing Revenue Account.
Housing Revenue Account Budget Setting 2020/2021 and Beyond Page 21 Page 55 of 324 16.2 The impact on reserves is shown in the graph below.
Sensitivity analyses - reserve levels 100.00
0.00
(100.00)
(200.00) £'m (300.00)
(400.00)
(500.00)
(600.00) Base calculations Additional savings Lower rent
16.3 This indicates that reduction in the cost base of at least £4m per annum appears to be needed, all other factors being equal over the medium term, with potentially more in the longer term.
Significant Risks
Universal Credit
16.4 Universal Credit poses one of the most significant risks in terms of the cost of income collection as well as the actual collection rates. In time, we expect a total of perhaps 10,000 tenants to be paying rent directly and the small number of existing tenants on UC already experience significantly higher than average levels of arrears and presently exhibit an eviction rate of around 3 times more than average.
16.5 There are therefore significant risks in relation to
- Income collection rates
- The additional amount of activity needed to collect income and where possible sustain tenancies
- The possibility of significantly increased eviction rates and the possibility that tenants will abandon properties in advance with the potential for significantly increased churn and void numbers. Some properties may also become less popular and this may increase issues around property sustainability in the medium to long term.
Housing Revenue Account Budget Setting 2020/2021 and Beyond Page 22 Page 56 of 324
Operational
16.6 There are a number of complex capital schemes within the programme, not least the cladding scheme, which include significant operational risks. In the case of cladding this includes the potential need to decant both tenants and adjoining residents where there is a risk of asbestos being disturbed.
BREXIT
16.7 Whilst the outcomes of BREXIT are presently unknown there are essentially four main identified risks that may transpire.
- Firstly, a shortage of suitable workers may arise meaning increases in labour costs, especially at a time when there are wider capital works in the area. This may impact both on ongoing repairs and maintenance costs as well as regeneration and new build programmes.
- Secondly, there has already been a general degradation in exchange rates leading to inflationary pressures in imported raw materials and finished products, and this could worsen in future.
- Thirdly, is the impact it might have on the general economy and how this might affect the wider tenant base (& thus ability to pay rent or issues around demand for our properties)
- Fourthly, whether those of our tenants who are from other EU counties may decide to return to mainland Europe which could have significant implications for stock lettability. It is not possible to estimate the number affected at this time but we have over 1,000 tenants whose first language is identified as European - Polish and Lithuanian being the most significant.
17 Finance comments
17.1 This report provides a comprehensive overview of the HRA Budget.
17.2 Housing faces an agglomeration of pressures over the coming years, and the financial implications of Universal Credit in particular have the potential to be severe as it finally arrives in Hull from December 2018 for new claimants. As set out in the report and the appendices, arrears levels are already very high and are still rising. It is expected that this will continue to be a significant and increasing issue over the short to medium term.
17.3 Rent rises are now being allowed to rise by CPI+1% from 2020/21. As the sensitivity analyses show, the long term fiscal health of the HRA is highly dependent upon those rent increases taking place and our ability to collect that rent in the light of both Universal Credit and Brexit, which could impact
Housing Revenue Account Budget Setting 2020/2021 and Beyond Page 23 Page 57 of 324 upon capital/repair costs and demand for our properties where a number of our tenants are EU Citizens.
17.4 Previous sensible fiscal management means that there is a sufficient level of reserves and borrowing capacity to allow the HRA to see through the next few years but significant changes in the underlying budget must still be implemented within the next 3 to 4 years if the HRA is to remain fiscally solvent over the medium to long term. Additionally the modernisation agenda will allow the Service to develop the resilience to adapt to the changing environment. It is imperative that the fiscal focus covers this longer period and does not concentrate only on the shorter term.
18 Legal comments
18.1 Section 74 of the Local Government and Housing Act 1989 requires a local housing authority to maintain a Housing Revenue Account in accordance with proper practices. Section 76 of the Act places a duty on the Authority to prevent a debit balance on the Housing Revenue Account. The proposals in this report fulfil those requirements and the recommendations in the report are supported.
18.2 The legal implications of factors which will materially impact upon the Housing Service and in turn the Housing Revenue Account are thoroughly highlighted and discussed within the report. The impact of Government changes to welfare benefits discussed in this report is having a bearing upon the level of tenancy breaches, particularly in respect of non-payment of rent. This is set to increase as the programme of benefit changes takes effect in the City. This will inevitably lead to an increase in the number of possession proceedings and evictions in Council tenancies and will have a financial impact in terms of increased court fees and costs. Evictions are likely to influence the number of homelessness applications received by the Council which will in turn impact upon the General Fund.
19 Human Resources comments
19.1 The staffing issues are covered in the report in terms of plans to develop more streamlined and modernised services to deal with the forthcoming changes and providing Officers with the tools to work smarter and more efficiently. The report recognises that whilst the outcomes of BREXIT are presently unknown there may be a risk of a shortage of suitable workers and the implications of this are highlighted. The report also recognises equality duty implications such as the need to carry out reasonable consultation with the local community on proposals e.g. affordable rent tenancies. There are no further staffing or equality duty implications arising.
Housing Revenue Account Budget Setting 2020/2021 and Beyond Page 24 Page 58 of 324 20 Comments of Overview and Scrutiny
20.1 This report will be considered at the Finance and Value for Money Overview and Scrutiny budget meeting to be held on Friday, 24th January, 2020. Any comments or recommendations made by the Commission will be tabled at Cabinet and included for Council. (Sc5711)
21 Conclusions
21.1 The budget provides for an extensive investment programme in new build properties in particular with over £65m in investment committed over the medium term.
21.2 However, the most significant threat remains the Council’s ability to collect income, especially as the roll out of Universal Credit continues. Post self- financing the only long term monies available to the HRA is the money collected from our tenants in rent and service charges. Protection of this revenue is vital to the continued sustainability of the HRA.
21.3 The scale of the savings required are now at a point where they should be manageable but challenging.
21.4 There remains a risk that Government Policy may change that could destabilise the HRA again but the ability to mitigate such changes is greater than it was a few years ago.
Councillor Stephen Brady, Leader of the Council
Contact Officer – David Bell Tel. 01482 613084
Officer Interests: None
Background Documents:
Hackitt Report: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/707785/Building_a_ Safer_Future_-_web.pdf
Safe as Houses 2: http://www.smith-institute.org.uk/book/safe-as-houses-2-a-follow-on-report-into-the-impact-of- universal-credit-on-southwark-councils-housing-tenants-rent-payment-behaviour/safe-as-houses- 2-2/
Housing Revenue Account Budget Setting 2020/2021 and Beyond Page 25 Page 59 of 324 Rent and Service Charge Setting Policy Statement 2020/2021
Hull City Council aim to set rents at a level that allows us to manage our properties well, to maintain them and to provide appropriate services and amenities for our tenants whilst keeping affordability in mind. We set rents and service charges in line with legislation, best practice and our service standards.
Customers are given at least 4 weeks notice of changes to their rent and service charges. Changes to rent will normally occur once a year on the first Monday in April. Rent is payable for each week of the year but the rent payable over the whole rent year is apportioned over 50 or 51 weeks (depending on the number of weeks in that particular rent year). This means that there are two weeks per year when customers are not required to pay rent (unless they are in arrears). The 2 weeks when customers are not required to pay will be in December each year and customers are notified of this in writing.
1. Rents Our properties are generally let on either a Formula Rent or an Affordable Rent.
a. Affordable rent
Local authorities are able to agree with the Homes and Communities Agency to convert a proportion of their properties which are being re-let on an affordable rent to help fund the development of new homes. This means that the Council can charge a different rent (which could be higher) than their usual rent charge.
The Council may wish to use affordable rent tenancies where: • major investment in particular housing stock has been or will be undertaken • funding for a project requires that the Council use affordable rents.
Where the Council is considering using affordable rents tenancies it will: • carry out reasonable consultation with the local community on its proposals • undertake a financial viability test • set out in a report the reasons for using affordable rents and the benefits the Council expects • require any decision to adopt the proposed affordable rent scheme to be approved by the Head of Service with responsibility for the management of the Council’s housing function in consultation with the Council’s Portfolio Holder with responsibility for the Council’s housing function.
The maximum rent for an Affordable Rent property, when it is first let to a new tenant, is 80% of the market rate, inclusive of service charges, or the ‘social rent rate’ (exclusive of service charges), whichever is higher. Each subsequent year, rents will change in line with changes in Formula Rents.
Appendix 2: Housing Revenue Account Budget Setting 2020/2021 and Beyond Page 1
Page 60 of 324 Rent and Service Charge Setting Policy Statement 2020/2021
New homes built or those which have undergone major refurbishment schemes will be let at Affordable Rents or Formula Rent, whichever is the higher.
b. Formula Rent
Formula Rents are set based on Government Formulae for each individual property with annual increases in line with CPI + 1% each year. This does not apply to service charges. Actual rent increases are determined by Council each year but rents will never be set at more than Formula Rent. All properties becoming empty will be re-let at Formula Rent. Where any significant structural alterations take place, such as the addition of extra bedrooms, the Formula Rent may be amended to take account of the change.
c. Shared Tenancies
Where properties are let with shared tenancies, rent may be set at not more than the Shared Accommodation Rate of Local Housing Allowance per bedroom.
d. Other Rent Models
The Council may develop other rent models to reflect the changing circumstances, especially in relation to Benefit eligibility.
Where the Council is considering developing a different model it will: • carry out reasonable consultation with the local community on its proposals • undertake a financial viability test • set out in a report the reasons for using affordable rents and the benefits the Council expects • require any decision to adopt any different rent scheme to be approved by the Head of Service with responsibility for the management of the Council’s housing function in consultation with the Council’s Portfolio Holder with responsibility for the Council’s housing function.
2. Service charges
Service Charges are set to recover the costs of the service provided wherever possible and will change based on changes in costs. Some service charges are currently set below cost and these will be increased over time to align with costs. Service charges will never be set at more than the cost of providing that service.
Appendix 2: Housing Revenue Account Budget Setting 2020/2021 and Beyond Page 2
Page 61 of 324
Implications Matrix
This section must be completed and you must ensure that you have fully considered all potential implications
This matrix provides a simple check list for the things you need to have considered within your report
If there are no implications please state
I have informed and sought advice from HR, Legal, Finance, Overview and Scrutiny Yes and the Climate Change Advisor and any other key stakeholders i.e. Portfolio Holder, relevant Ward Members etc. prior to submitting this report for official comments
I have considered whether this report requests a decision that is outside the Budget Yes and Policy Framework approved by Council
Value for money considerations have been accounted for within the report Yes
The report is approved by the relevant City Manager Yes
I have included any procurement/commercial issues/implications within the report Yes
I have considered the potential media interest in this report and liaised with the Media Yes Team to ensure that they are briefed to respond to media interest.
I have included any equalities and diversity implications within the report and where Yes necessary I have completed an Equalities Impact Assessment and the outcomes are included within the report
Any Health and Safety implications are included within the report Yes
Any human rights implications are included within the report Yes
I have included any community safety implications and paid regard to Section 17 of Yes the Crime and Disorder Act within the report
I have liaised with the Climate Change Advisor and any environmental and climate Yes change issues/sustainability implications are included within the report
I have included information about how this report contributes to the City Plan/ Area Yes priorities within the report
Housing Revenue Account Budget Setting 2020/2021 and Beyond Page 62 of 324 4
Housing Revenue Account - Appendix 1
2020/2021
Page 63 of 324 Hull City Council - Budget Pack - Annexes HRA Budget - 2020 / 2021
Appendix 1, section Page
1 HRA Revenue Budget 3
2 Reconciliation of significant changes in year 4
3 HRA Capital 5
4 5 year projections 6
5 HRA Reserves 7
6 HRA Prudential Indicators 8
7 Sensitivity Analyses 9
8 Debt & borrowing analysis 10 (a) HRA Borrowing (b) Debt Maturity by years
9 HRA Capital Budget - further analysis 11 (a) New Build (b) Cladding
10 Projected changes in dwelling stock by year 12 (a) overall movement (b) right to buy sales (c) Property Voids
11 Rent & rent arrears 13 (a) Rent per week (b) Change in budgeted rents (c) Rent Arrears - trends (d) Universal Credit - impact to date (e) Bedroom Tax (f) Expectations of bad debts
12 Service Charges 16
Housing Revenue Account Budget Setting - 2017/18Page Page 64 2 ofof 17 324 Printed on: 15/01/2020 Hull City Council - Budget Pack - Annexes HRA Budget - 2020 / 2021
HRA Revenue Budget Appendix 1, section 1
Current Proposed change Section Budget Budget 2019/20 2020/21 £'000 £'000 £'000 %age
INCOME Dwelling rent income 86,931 89,309 2,378 2.7% 11 Charges for services & facilities 2,831 3,159 329 11.6% 12 Non dwelling rents 1,235 1,257 22 1.8% 12 Leaseholders charge for services 279 406 127 45.6% Other fees & charges 520 491 (29) -5.6% Interest on balances 264 189 (74) -28.2% General Fund Transfer re whole community 819 810 (9) -1.1% TOTAL INCOME 92,878 95,621 2,743 3.0% 2
EXPENDITURE Repairs & Maintenance 22,416 26,253 3,837 17.1% Supervision and Management 16,194 17,189 995 6.1% Special Services 4,945 5,149 204 4.1% Rent, rates, taxes & other charges 955 921 (34) -3.5% Provision For Doubtful Debt 1,193 708 (485) -40.7% 11 Capital Financing Costs 45,430 54,102 8,673 19.1% Contribution to Corporate & Democratic Core 305 310 5 1.6% Provisions 650 500 (150) -23.1% 6 TOTAL EXPENDITURE 92,088 105,132 13,044 14.2% 2
Net surplus / (deficit) 790 (9,512) (10,301)
Notes
Provisions General 250 250 0 0.0% 6 HMIS Re-procurement 400 250 (150) -37.5% 6 650 500 (150) -23.1%
Housing Revenue Account Budget Setting - 2017/18 PagePage 65 3 of of 17 324 Printed on: 15/01/2020 Hull City Council - Budget Pack - Annexes HRA Budget - 2020 / 2021
Reconciliation of significant changes in year Appendix 1, section 2 Income Expenditure Net £'000 £'000 £'000 £'000 £'000
Balances per 2018/19 budget 92,878 92,088 790
Rent & service charges / Bad debts Change in average rent / service charges 2,597 19 Properties moving to formula rent 771 6 Change in property numbers (993) (8) Change in assumed number of voids 380 3 Implications of Universal Credit/ Welfare Reform (506) 2,755 (485) 3,240
Right to buys & leaseholders Change in numbers of RTBs (37) (37) 0 (37)
Repairs, maintenance & other property costs Additional costs of day to day repairs 788 Additional spend on voids 1,160 Mobilisation costs 133 Profit on contractor overheads 193 Change in property numbers (118) Change in assumed number of voids 0 Other Costs/ (savings) in R&M 437 Painting 777 Cost of security in Renewal Areas (ex Gateway) (130) Additional costs of Fire protection / Grenfell response 190 0 3,429 (3,429)
HMIS reprocurement & Worksmart Preparation & Implementation costs 8 Worksmart 50 Software (47) 0 11 (11)
Capital financing Interest payments & debt premia (682) Major Repairs Allowance (4,355) Depreciation - change in Social Housing adjustment factor 4,986 Debt repayments 9,033repaid as fall due Debt management costs (1) 0 8,981 (8,981)
Staffing changes Implications of regrading 107 Other base staffing changes (inc pay award) 608 0 715 (715)
Others Introduction of shared tenancies (2) (33) Income from mobile phone masts, pubs etc 7 5 (33) 38
General inflationary factors (Gas / Electric / CTax etc.) 377 (377) 95,601 105,083 (9,483)
Others 20 49 (29)
95,621 105,132 (9,512)
Net change 2,743 13,044 (10,301)
Housing Revenue Account Budget Setting - 2017/18 PagePage 66 4 of of 17 324 Printed on: 15/01/2020 Hull City Council - Budget Pack - Annexes HRA Budget - 2020 / 2021
HRA Capital Appendix 1, section 3 Current Proposed change Section Budget Budget 2019/20 2020/21 £'000 £'000 £'000 %age
Capital Spend Maintaining Decent Homes 9,841 10,270 429 4.4% Mechanical & electrical 5,637 5,695 58 1.0% KWL overheads 2,000 2,400 400 20.0% Others (inc. client costs) 1,480 1,460 (20) -1.4% Fire Protection Works & other Health & Safety work 3,068 5,041 1,974 64.3% Council House Adaptations 3,255 2,700 (555) -17.1% Empty Properties 2,400 1,068 (1,332) -55.5% Regeneration 779 344 (435) -55.8% Base Programme 28,459 28,978 519 1.8% Cladding 12,077 12,258 181 1.5% 9 New build 10,188 11,308 1,121 11.0% 9 RTB grants 919 729 (190) -20.7% TOTAL EXPENDITURE 51,643 53,273 1,630 3.2%
Capital Financing RTB Receipts - new build 1,834 4,121 2,287 124.7% RTB Receipts - general 682 689 7 1.0% Homes England 4,179 900 (3,279) -78.5% Humber LEP 548 2,396 1,848 337.2% ECO 000 9 MRA (general) 26,013 26,844 831 3.2% RCCO 000 Borrowing 18,386 18,322 (64) -0.3% 51,643 53,273 1,630 3.2%
Note - these costs are based on decency to be maintained going forward but the programme is essentially a reactive programme taking action where items are failing. Programme delivery at this level would keep properties in a reasonable state of repair but would not meet any aspirational standards and would not prevent further decline in areas that are already showing signs of stress or failure. Failure to replace some elements on a planned basis will also result in pressure on responsive repair budgets. Some essential planned work will also be carried out only to prevent elemental failure, such as boiler replacements.
£120,000,000 maintaining the fabric of buildings
Fire Protection Works & other Health & Safety work £100,000,000 Cladding
New build & bringing empty properties back into use
Other Regeneration £80,000,000
£60,000,000
£40,000,000
£20,000,000
£0 2020 / 2021 / 2022 / 2023 / 2024 / 2025 / 2026 / 2027 / 2028 / 2029 / 2030 / 2031 / 2032 / 2033 / 2034 / 2035 / 2036 / 2037 / 2038 / 2039 / 2040 / 2041 / 2042 / 2043 / 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044
Housing Revenue Account Budget Setting - 2017/18 PagePage 67 5 of of 17 324 Printed on: 15/01/2020 Hull City Council - Budget Pack - Annexes HRA Budget - 2020 / 2021
5 year projections Appendix 1, section 4 projected future spend (inc inflation)
2020 / 2021 2021 / 2022 2022 / 2023 2023 / 2024 2024 / 2025 INCOME Dwelling Rent Income 89,309 91,049 93,370 95,691 97,195 Charges for service and facilities 3,159 3,217 3,311 3,409 3,508 Non dwelling rents 1,257 1,218 1,188 1,160 1,126 Leaseholders charges for services 406 315 325 335 345 Other fees & charges 491 493 495 498 499 Interest on balances 189 198 232 317 407 General Fund Transfer re Whole Community 810 835 864 896 922 TOTAL INCOME 95,621 97,325 99,785 102,305 104,001
EXPENDITURE Repairs & Maintenance 26,253 26,562 26,957 27,336 27,669 Supervision and Management 17,189 17,747 17,837 18,295 18,823 Special Services 5,149 5,276 5,486 5,721 5,933 Rent, rates, taxes & other charges 921 943 973 1,005 1,036 Provision For Doubtful Debt 708 784 869 978 994 Capital Financing Costs 54,102 47,188 44,655 45,238 43,528 Contribution to Corporate & Democratic Core 310 320 332 346 356 Provisions 500 500 500 250 250 TOTAL EXPENDITURE 104,632 98,819 97,109 98,919 98,339
Net surplus / (deficit) (9,012) (1,494) 2,676 3,386 5,663
Provisions General contingencies 250 250 250 250 250 HMIS Re-procurement 250 250 250 0 0 500 500 500 250 250
HMIS Re-procurement reflects potential costs of implementation, training and process re-engineering in relation to the new system. Costs of implementation and changes in licence costs are included withing S&M budgets above.
2020 / 2021 2020 / 2021 2021 / 2022 2022 / 2023 2023 / 2024
Capital Spend Maintaining Decent Homes 10,270 8,233 8,208 8,476 8,379 Mechanical & electrical 5,695 4,545 4,504 4,656 4,527 KWL overheads 2,400 2,479 2,571 2,679 2,759 Others (inc. client costs) 1,460 1,514 1,579 1,639 1,705 Fire Protection Works & other Health & Safety work 5,041 6,699 4,444 3,732 614 Council House Adaptations 2,700 2,583 2,680 2,792 2,878 Empty Properties 1,068 0 0 0 0 Regeneration 344 311 325 337 350 Base Programme 28,978 26,364 24,312 24,311 21,213 Cladding 12,258 13,865 10,157 2,874 2,989 New build 11,308 22,645 25,839 3,789 3,941 RTB grants 729 1,000 500 500 500 TOTAL EXPENDITURE 53,273 63,874 60,808 31,474 28,642
No additional regeneration programmes assumed other than those already planned. In reality, should projects stack up financially using any available grant funding that may exist, then new initiatives will be added into the programme as they develop. These are indicative programmes at this stage as detailed programmes will need to be constructed based on need at the time.
Capital Financing RTB Receipts - new build 4,121 5,534 4,144 1,137 1,182 RTB Receipts - general 689 696 703 710 0 Homes England 900 900 0 0 0 Humber LEP 2,396 0 0 0 0 ECO 00000 MRA (general) 26,844 27,546 28,444 29,306 27,460 RCCO 00000 Borrowing 18,322 29,198 27,517 321 0 53,273 63,874 60,808 31,474 28,642
Housing Revenue Account Budget Setting - 2017/18 PagePage 68 6 of of 17 324 Printed on: 15/01/2020 Hull City Council - Budget Pack - Annexes HRA Budget - 2020 / 2021
HRA Reserves Appendix 1, section 5
2019 / 2020 2020 / 2021 2021 / 2022 2022 / 2023 2023 / 2024
HRA Reserves 3,000 3,500 4,000 4,000 3,750 Decent Homes Reserve 20,783 10,772 8,277 10,454 13,840 23,783 14,272 12,277 14,454 17,590 MRA Reserves 0 0 0 0 0 23,783 14,272 12,277 14,454 17,590 notes: HRA Reserves This is the minimum reserve level to reflect the inherent financial risks in the HRA.
Decent Homes Reserve Reserves maintained to undertaken replacement of decent homes programme when due. MRA Reserves These reserves can only be spent on Capital works.
100.0
0.0 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 / / / / / / / / / / / / / / / / / / / / / / / / / / 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046
(100.0)
(200.0) £'m
(300.0)
(400.0)
(500.0)
HRA Reserves Decent Homes Reserve Major Repairs Reserve
Change in reserves in recent years actual reserves projected Increase/ at 31/3/14 reserves at (reduction) 31/3/20 £'000 £'000 £'000 %
HRA Reserves 3,000 3,000 0 0.0% Decent Homes Reserve 36,733 20,783 (15,950) -43.4% 39,733 23,783 (15,950) -40.1% MRA Reserves 10,862 0 (10,862) -100.0% 50,595 23,783 (26,812) -53.0%
Housing Revenue Account Budget Setting - 2017/18 PagePage 69 7 of of 17 324 Printed on: 15/01/2020 Hull City Council - Budget Pack - Annexes HRA Budget - 2020 / 2021
HRA Prudential Indicators Appendix 1, section 6
Interest Cover Ratio 2020 / 2021 2021 / 2022 2022 / 2023 2023 / 2024 2024 / 2025 ICR 2.04 2.05 1.98 1.96 2.02 Target ICR 1.50 1.50 1.50 1.50 1.50 HA average ICR (18/19) 1.80 1.80 1.80 1.80 1.80
2.50 Interest Cover Ratio - projected
2.00
1.50
1.00
0.50
- 2020 /2021 /2022 /2023 /2024 /2025 /2026 /2027 /2028 /2029 /2030 /2031 /2032 /2033 /2034 /2035 /2036 /2037 /2038 /2039 /2040 /2041 /2042 /2043 /2044 /2045 / 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 -0.50
-1.00
-1.50
ICR Target ICR HA average ICR (18/19)
This indicator measures the interest cost relative to operating surpluses before capital financing charges. It is a measure traditionally used in the houisng association sector and there are thus robust benchmarks to measure ourselves against.
Debt per property 2020 / 2021 2021 / 2022 2022 / 2023 2023 / 2024 2024 / 2025 Debt per property £9,422 £10,269 £11,229 £11,122 £11,002
90 Debt per property
80
70
60
50 £'k 40
30
20
10
0 2020 / 2021 2025 / 2026 2030 / 2031 2035 / 2036 2040 / 2041 2045 / 2046 2050 / 2051 2055 / 2056
Housing Revenue Account Budget Setting - 2017/18 PagePage 70 8 of of 17 324 Printed on: 15/01/2020 Hull City Council - Budget Pack - Annexes HRA Budget - 2020 / 2021
Sensitivity Analyses £'000 Appendix 1, section 7
2023 / 2024 2028 / 2029 2033 / 2034 2038 / 2039 2043 / 2044 £'k £'k £'k £'k £'k Current projections 17,590 26,528 (42,900) (165,259) (376,419) Additional savings of £4m p.a. from 21/22 30,349 65,580 29,553 (50,867) (209,809) Rent increase 1% lower from 21/22 14,704 18,042 (57,853) (187,607) (407,155)
Net impact on reserves Additional savings of £4m p.a. from 21/22 12,759 39,052 72,453 114,392 166,610 Rent increase 1% lower from 21/22 (2,886) (8,486) (14,953) (22,348) (30,736)
Note - these are indicative numbers based on headline changes taking place fully in 2021/22 with no additional changes after that date.
Sensitivity analyses - reserve levels 100.00
0.00 2020 /2021 /2022 /2023 / 2024 /2025 / 2026 /2027 / 2028 /2029 /2030 /2031 /2032 /2033 /2034 /2035 /2036 / 2037 /2038 / 2039 /2040 / 2041 /2042 /2043 /2044 /2045 / 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046
(100.00)
(200.00) £'m
(300.00)
(400.00)
(500.00)
(600.00) Base calculations Additional savings Lower rent
Analysis of variable spend 2020 / 2021 £'000 Spend on properties 28,376 58.1% Staff costs 11,233 23.0% Corporate recharges 4,459 9.1% Others 4,772 9.8% 48,839
additional savings would thus represent 8.2% of variable spend
Housing Revenue Account Budget Setting - 2017/18 PagePage 71 9 of of 17 324 Printed on: 15/01/2020 Hull City Council - Budget Pack - Annexes HRA Budget - 2020 / 2021
Debt & borrowing analysis Appendix 1, section 8
(a) HRA Borrowing 2020 / 2021 2021 / 2022 2022 / 2023 2023 / 2024 2024 / 2025 £'000 £'000 £'000 £'000 £'000
Existing PWLB (normal business) 78,243 65,203 56,302 48,230 40,213 New debt taken on through Self Financing 78,989 78,989 78,989 78,989 78,989 New loans 20,822 52,520 82,537 85,358 87,858 Other loans 41,119 41,119 41,119 41,119 41,119 219,173 237,831 258,947 253,696 248,179
Borrowing b/f 218,968 219,173 237,831 258,947 253,696 new borrowing 18,322 29,198 27,517 321 0 repaid in year (net) (18,117) (10,540) (6,401) (5,572) (5,516) 219,173 237,831 258,947 253,696 248,179 500.00 Total expected borrowing
450.00 PWLB - existing PWLB - self financing New loans Market
400.00
350.00
300.00
250.00 £'m
200.00
150.00
100.00
50.00
0.00 19 / 20 / 21 / 22 / 23 / 24 / 25 / 26 / 27 / 28 / 29 / 30 / 31 / 32 / 33 / 34 / 35 / 36 / 37 / 38 / 39 / 40 / 41 / 42 / 43 / 44 / 45 / 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46
(b) Debt Maturity by years Debt at 1/4/20 60.0 £'m Debt maturity profile @ 1/4/20 £'000 50.0 1 year 20,617 1 - 2 years 13,040 40.0 2 - 5 years 24,990 5-10 years 50,391 30.0 10-15 years 54,652 15-20 years 7,079 20.0 20-25 years 7,079 25-30 years 0 10.0 30-35 years 5,140 35-40 years 0 0.0 40-45 years 0 1 1 - 2 2 - 5 5-10 10-1515-2020-2525-3030-3535-4040-45 >45 year years years years years years years years years years years years >45 years 35,979 218,968 longer term forecasts 2024 / 2025 2029 / 2030 2034 / 2035 2039 / 2040 2044 / 2045 £'000 £'005 £'010 £'015 £'020
Existing PWLB (normal business) 40,213 19,822 14,158 7,079 0 New debt taken on through Self Financing 78,989 33,989 0 0 0 New loans 87,858 132,791 143,796 257,525 379,463 Other loans 41,119 41,119 41,119 41,119 41,119 248,179 227,721 199,073 305,723 420,582
Housing Revenue Account Budget Setting - 2017/18 PagePage 72 10 ofof 17 324 Printed on: 15/01/2020 Hull City Council - Budget Pack - Annexes HRA Budget - 2020 / 2021
HRA Capital Budget - further analysis Appendix 1, section 9
(a) New Build 2019/2020 2020/2021 2021/2022 2022/2023 2023/2024
Staffing costs and investigations 550 523 680 725 0 Small sites 0 5,959 9,188 12,390 0 Dane Park & Isledale 0 1,620 7,560 7,885 0 Grange Road 0 455 577 0 0 Preston Road 0 0 1,141 1,190 0 Others - Turnkey & acquisition of empty properties 2,152 2,750 3,500 3,650 3,789
Indicative new build 0 0 0 0 0
2,702 11,308 22,645 25,839 3,789
Empty Properties
Total 2,702 11,308 22,645 25,839 3,789
Units completed Small sites 0 39 68 79 0 Dane Park & Isledale 0 0 60 60 0 Grange Road 0 3 9 0 0 Preston Road 0 0 10 10 0 Others - Turnkey & acquisition of empty properties 18 22 30 30 30 Indicative new build 0 0 0 0 0 18 64 177 179 30 Five year total: 468 From 2025/26 onwards the following is also assumed 25additional units p.a. at a (pre inflation) cost of £3,125,000
Small sites Planning applications have been submitted and contracts have been awarded to 4 contractors for the initial phase of delivery. Start on site expected April 2020. Dane Park/ IsledaneFollowing initial feasibility work, a soft market testing exercise has been undertaken. Interest from the market was low and we are now seeking to explore procurement options to bring this land forward. Grange Road Transfer of land and contract for Council units is now complete. Owing to the pepper potting of the Council units on a mixed tenure scheme the projections are based on the developer’s current programme. First council plot forecast to complete in summer 2020. Preston Road Plans have been presented by the developers at pre-application planning committee on 2 occasions and work is now underway to prepare the formal planning application
Previous completions 2017/2018 2018/2019 2019/2020 Total Milldane (Orchard Park) 86 91 177 Preston Road/ Soathcoates 18 17 35 Longhill Bungalows (Viking site) 7 7 Portabello St 63 30 93 Alexandra Gardens 12 12 Wawne View 6 6 167 145 18 330
(b) Cladding 2019/2020 2020/2021 2021/2022 2022/2023 2023/2024
Warmzone 60 60 62 65 67 Preston Road Cladding 0 0 0 0 0 Preston Rd Additional Fencing 0 0 0 0 0 Orchard Park Wimpey No Fines Cladding phase 1 0 0 0 0 0 Orchard Park Cladding phase 2 0 0 0 0 0 Orchard Park 5 M provision 1,325 1,198 0 0 0 Bransholme Caspon Cladding Provision 10,442 11,000 5,185 0 0 Spooner Cladding 0 0 8,617 0 0 Other Wimpey No Fines Cladding 0 0 0 6,451 0 Calders 0 0 0 2,559 0 Rat Trad Properties Panel Insulation 0 0 0 1,082 2,807 11,827 12,258 13,865 10,157 2,874
The 5M properties are difficult in terms of their design, due to the roof type, hung tiles and other aspects. We have been working very closely with Fortem to come up with a design which is safe, achieves the required energy efficiency savings and most importantly, minimises disruption to residents. There is therefore a risk that this scheme may be delayed.
Housing Revenue Account Budget Setting - 2017/18 PagePage 73 11 ofof 17 324 Printed on: 15/01/2020 Hull City Council - Budget Pack - Annexes HRA Budget - 2020 / 2021
Projected changes in dwelling stock by year Appendix 1, section 10
(a) overall movement 2019 / 2020 2020 / 2021 2021 / 2022 2022 / 2023 2023 / 2024
Opening stock 23,885 23,475 23,261 23,161 23,061 New build/ empties etc 18 64 177 179 30 Demolition in regeneration areas - Ings & Preston Rd (142) (3) 0 0 0 RTB Sales (236) (225) (227) (229) (231) Demolitions (50) (50) (50) (50) (50) others 0 0 0 0 0 23,475 23,261 23,161 23,061 22,810 25,000 36,000
34,000 20,000 32,000 15,000 historic property trends 30,000 10,000 projected future property numbers 28,000
5,000 26,000
24,000 0 22,000
20,000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2019 / 2020 / 2019 2021 / 2020 2022 / 2021 2023 / 2022 2024 / 2023 2025 / 2024 2026 / 2025 2027 / 2026 2028 / 2027 2029 / 2028 2030 / 2029 2031 / 2030 2032 / 2031 2033 / 2032 2034 / 2033 2035 / 2034 2036 / 2035 2037 / 2036 2038 / 2037 2039 / 2038 2040 / 2039 2041 / 2040 2042 / 2041 2043 / 2042 2044 / 2043
(b) right to buy sales Applications Sales 11/12 137 70 600 12/13 243 117 13/14 269 187 500 14/15 263 160 400 15/16 396 209 16/17 494 282 300 17/18 458 272 18/19 454 268 200 19/20 proj'n 400 236 20/21 forecast 400 225 100 21/22 forecast 404 227
- 22/23 forecast 408 229 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 23/24 forecast 412 231 proj'n forecastforecastforecastforecast
Applications Sales
(c) Property Voids Total Voids Average Void Repair Times (days) 160 300
280 140 133.6 260 120 240 117.1 100 109.8 104.6 220 80 84.2 200 77.6 78.7 60 180 67.0
40 160 25.8 28.8 25.3 23.0 21.0 21.8 22.5 24.3 140 20 24.1 21.1 18.7 19.1 18.4 18.9 19.8 18.4 120 0 100 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 to date Jul-13 Jul-18 Jan-16 Jun-16 Oct-14 Oct-19 Apr-12 Apr-17 Sep-12 Feb-13 Sep-17 Feb-18 Routine Major Works All Voids Dec-13 Dec-18 Aug-15 Nov-16 Mar-15 May-14 May-19
Housing Revenue Account Budget Setting - 2017/18 PagePage 74 12 ofof 17 324 Printed on: 15/01/2020 Hull City Council - Budget Pack - Annexes HRA Budget - 2020 / 2021
Rent & rent arrears Appendix 1, section 11
(a) Rent per week 2019/2020 2020/2021 change change Average rent per week £71.80 £74.19 £2.39 3.33% 50 week equivalent £74.67 £77.16 £2.48 3.33%
Projected future rents 2021 / 2022 2022 / 2023 2023 / 2024 2024 / 2025 2025 / 2026 Average rent per week £76.42 £78.71 £81.07 £83.50 £85.17 Assumed increase 3.00% 3.00% 3.00% 3.00% 2.00%
(b) Change in budgeted rents £'000 budgeted rent 19/20 86,809 change in rent levels 2,331 2.7% additional rent on voids/ property mix 768 0.9% ← reflects properties relet at change in property numbers (1,008) -1.2% Formula Rent and new change in void levels 395 0.5% properties at Affordable Rent. 2,486 2.9% budgeted rent 20/21 89,295
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Rent & rent arrears Appendix 1, section 11 (2)
(c) Rent Arrears - trends 2015/16 2016/17 2017/18 2018/19 2019/20 Current Tenant Arrears (as % of rent roll) 2.011% 2.287% 2.498% 2.281% 3.255% Former Tenant Arrears (as % of rent roll) 0.990% 1.107% 1.286% 1.270% 1.331% Arrears written off as (% of rent roll) 0.574% 0.458% 0.584% 0.708% 0.457%
Current arrears trends 3.3 9,500
3.1 9,000
2.9 8,500
2.7 8,000
2.5 7,500 Nr. £'m 2.3 7,000
2.1 6,500 December '19 figures distorted by 1.9 recieving 2 months 6,000 APAs from DWP 1.7 5,500
1.5 5,000
Level of current arrears £ Number of current tenants in arrears Linear (Level of current arrears £)
Former arrears trends 1.4 1,750
1,700 1.3 1,650
1,600 1.2 1,550
1.1 1,500 Nr. £'m
1,450 1.0 1,400
1,350 0.9 1,300
0.8 1,250
Level of former tenants arrears £ Number of former tenants in arrears Linear (Level of former tenants arrears £)
Average of current arrears £ £380.00 £360.00 £340.00 £320.00 £300.00 £280.00 £260.00 £240.00 £220.00
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Rent & rent arrears Appendix 1, section 11 (3)
(d) Universal Credit - impact to date
Universal Working age All Tenants Credit Cases tenants Total 4,038 23,392 23,392 No. in Arrears 2,720 6,099 5,823 % in Arrears 67.4% 26.1% 24.9% Average £ £469.87 £358.00 £323.36 Alternative Payment Arrangements (APAs) in place 1050 £500.00 80.0% % of cases on APA 26.0% £400.00 60.0% £300.00 40.0% Evictions £200.00 UC Cases 0.79% £100.00 20.0% Total tenants 0.27% £0.00 0.0% UC claimants thus more likely to be evicted by a factor of 2.9:1 Universal Credit All Tenants Working age Cases tenants
Average £ % in Arrears
(e) Bedroom Tax 01 December 2019
Bedroom Tax £ Due £ Paid % Paid Tenants charged bedroom tax 2,279 7,112,739 6,955,074 97.8% % tenants paying in full 60.7% 4,468,420 4,468,410 100.0% % tenants paying partial 38.3% 2,638,713 2,486,664 94.2% % tenants paying none 1.0% 5,607 - 0.0%
(f) Expectations of bad debts
2020 / 2021 2021 / 2022 2022 / 2023 2023 / 2024 2024 / 2025 current expected level of bad debts 0.62% 0.62% 0.62% 0.62% 0.62% impact of welfare reform (Universal Credit) 0.13% 0.20% 0.26% 0.35% 0.35% 0.75% 0.82% 0.88% 0.97% 0.97%
As we have a situation with a significant amount of unknowns these must be seen as indicative of the potential trajectory rather than a forecast. The full implications of the benefit cap and Universal Credit are not yet known, with some cognisance taken of earlier studies but we are essentially in uncharted territory at present so there are no historical patterns here or elsewhere to meaningfully draw upon.
1.20% Projected bad debt levels (reflected in budget) 1.00%
0.80%
0.60%
0.40%
0.20%
0.00% 2020 / 2021 2021 / 2022 2022 / 2023 2023 / 2024 2024 / 2025
current expected level of bad debts impact of welfare reform (Universal Credit)
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Service Charges Appendix 1, section 12
Service Charges 2019/2020 2020/2021 Increase Notes
Service CCTV £0.63 £0.61 (£0.02) cost recovery Controlled Entry £1.41 £1.53 £0.13 Great Thornton Street - mobile security service £2.95 £3.60 £0.65 currently significantly under recovering costs by c36%
Garages Block Garages £7.50 £7.75 £0.25 Private Garages £8.72 £9.30 £0.58 includes VAT NB: legally VAT is chargeable on all garages, except for tenants where up to 2 garages are let in conjunction with the property (VAT notice 742, s4.2).
Sheltered Sheltered - Category 1 £6.19 £6.41 £0.23 Sheltered - Category 1.5 £6.40 £6.85 £0.45 cost recovery Sheltered - Category 2 / vertical £24.14 £25.67 £1.53 PCT recharge (Thornton Court) £14.22 £14.65 £0.43
Lifeline Fixed lifeline £3.14 £3.25 £0.11 Cost recovery Tenants lifeline £3.14 £3.25 £0.11 Private lifeline £3.76 £3.90 £0.14 includes VAT PCT recharge (Thornton Court) £3.62 £3.73 £0.11
Others Ashby / Hermes Heating Charge £7.21 £7.76 £0.55 Heating Charge - all other bedsits £11.37 £12.23 £0.86 increase in line with gas price Bungalow Heating Charge £15.80 £16.99 £1.19 rises Heating Charge - all other flats £13.26 £14.26 £1.00 Ashby / Hermes Service Charge £3.27 £3.37 £0.10 Charles Brady £4.93 £5.08 £0.15 Standard Service Charge £4.44 £4.58 £0.14 Water Meter £5.03 £5.03 £0.00
LD Schemes Ashby £23.32 £24.84 £1.52 Cost recovery Hermes £17.90 £19.00 £1.10
Flats - Caretaking High Rise Flats £5.10 £5.10 £0.00 2 Storey Blocks - Various Sizes (Communal Gardens Only) £1.40 £1.60 £0.20 2 Storey 4 Blocks (Communal Entrance to 1st Floor only) £0.00 £0.00 £0.00 2 Storey Non Trad Corner 4 Blocks £0.00 £0.00 £0.00
Traditional 2 Storey Corner 6 Block £1.40 £1.60 £0.20 Currently underrecovering costs by c12% Traditional 3 Storey post war 6 Block £1.40 £1.60 £0.20 Traditional 3 Storey pre war £2.00 £2.25 £0.25 Traditional 3 Storey Corner 6 block £0.00 £0.00 £0.00 Trad Maisonettes Over Estate Shops £0.00 £0.00 £0.00 Non Trad Maisonettes Over Estate Shops £0.00 £0.00 £0.00 Pashby House £0.00 £5.45 £5.45 Australia Houses £3.40 £3.85 £0.45 Block Maisonettes £1.40 £1.60 £0.20 6-9 Storey Flats £3.40 £3.85 £0.45 Ferensway House £0.00 £0.00 £0.00 Acquired flats £0.00 £0.00 £0.00 Sheltered high rise flats £5.10 £5.10 £0.00 Salinger House £2.05 £2.30 £0.25 Salinger House £2.05 £2.30 £0.25 Dane View £3.00 £3.40 £0.40 Coltman Street £0.00 £0.00 £0.00 Fruit Market Flats - Affordable rents £0.00 £0.00 £0.00 King Street Flats - Affordable rents £0.00 £0.00 £0.00 Milldane - New build 2 & 3 storey flats £0.00 £0.00 £0.00
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Service Charges Appendix 1, section 12
Service Charges 2019/2020 2020/2021 Increase Notes
Flats - Communal cleaning High Rise Flats £3.95 £4.55 £0.60 2 Storey Blocks - Various Sizes (Communal Gardens Only) £0.00 £5.50 £5.50 2 Storey 4 Blocks (Communal Entrance to 1st Floor only) £0.00 £0.60 £0.60 2 Storey Non Trad Corner 4 Blocks £0.85 £1.00 £0.15
Traditional 2 Storey Corner 6 Block £0.85 £1.00 £0.15 Currently underrecovering costsby c14% Overall chargesrecoveringfully costs. Traditional 3 Storey post war 6 Block £0.85 £1.00 £0.15 Traditional 3 Storey pre war £0.75 £0.90 £0.15 Traditional 3 Storey Corner 6 block £0.50 £0.60 £0.10 Trad Maisonettes Over Estate Shops £0.75 £0.90 £0.15 Non Trad Maisonettes Over Estate Shops £0.75 £0.75 £0.00 Pashby House £0.00 £1.00 £1.00 Australia Houses £6.00 £6.95 £0.95 Block Maisonettes £0.75 £0.90 £0.15 6-9 Storey Flats £3.90 £4.05 £0.15 Ferensway House £10.95 £11.95 £1.00 Acquired flats £0.85 £1.00 £0.15 Sheltered high rise flats £0.00 £0.00 £0.00 Salinger House £1.55 £1.55 £0.00 Salinger House £1.55 £1.55 £0.00 Dane View £0.55 £0.55 £0.00 Coltman Street £2.95 £2.95 £0.00 Fruit Market Flats - Affordable rents £0.00 £0.00 £0.00 King Street Flats - Affordable rents £0.00 £0.00 £0.00 Milldane - New build 2 & 3 storey flats £0.00 £0.00 £0.00
Flats - Communal electric High Rise Flats £3.25 £3.25 £0.00 2 Storey Blocks - Various Sizes (Communal Gardens Only) £0.00 £1.85 £1.85 2 Storey 4 Blocks (Communal Entrance to 1st Floor only) £0.40 £0.45 £0.05 2 Storey Non Trad Corner 4 Blocks £0.40 £0.45 £0.05 Traditional 2 Storey Corner 6 Block £0.80 £0.90 £0.10 Traditional 3 Storey post war 6 Block £1.40 £1.55 £0.15 Traditional 3 Storey pre war £1.00 £1.00 £0.00 Traditional 3 Storey Corner 6 block £0.65 £0.65 £0.00 Trad Maisonettes Over Estate Shops £0.65 £0.65 £0.00 Non Trad Maisonettes Over Estate Shops £0.65 £0.75 £0.10 Pashby House £0.00 £0.60 £0.60 Australia Houses £0.35 £1.60 £1.25 Block Maisonettes £1.55 £1.75 £0.20 6-9 Storey Flats £2.55 £2.55 £0.00 Ferensway House £2.85 £6.45 £3.60 Acquired flats £0.80 £0.90 £0.10 Sheltered high rise flats £0.00 £0.00 £0.00 Salinger House £0.80 £0.85 £0.05 Salinger House £0.80 £0.85 £0.05 Dane View £0.65 £0.75 £0.10 Coltman Street £0.40 £0.75 £0.35 Fruit Market Flats - Affordable rents £0.00 £0.00 £0.00 King Street Flats - Affordable rents £0.00 £0.00 £0.00 Milldane - New build 2 & 3 storey flats £0.00 £0.00 £0.00
District Heating Schemes Bathurst St £0.0449 £0.0449 £0.0000 Rosset House £0.0449 £0.0449 £0.0000 New Michael Street / Melville Street £0.0449 £0.0449 £0.0000 Torpoint, Millport & Woolwich £0.0449 £0.0449 £0.0000 Valiant Drive blocks £0.0449 £0.0449 £0.0000 Coniston & Kendall Houses £0.0610 £0.0610 £0.0000 Meter charge £1.40 £1.45
Laundry - all schemes wash tokens £2.00 £2.00 £0.00 dryer tokens £1.00 £1.00 £0.00
Travellers sites (these are GF charges but processed in Housing) Single pitch £61.33 £63.17 £1.84 Double pitch £91.92 £94.68 £2.76
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Report to: Wards - All Finance and Value for Money Scrutiny – 24 January 2020 Cabinet – 27 January 2020 Full Council – 27 February 2020
Review of Locally Defined Discounts for Council Tax in 2020/21
Report of the Director of Finance and Transformation
1. Purpose of the Report and Summary
1.1. To allow Members to consider locally defined Council Tax discounts for 2020/21.
2. Recommendations
On the basis that any changes made to locally defined discounts must comply fully with the Council’s Council Tax Discounts Policy Framework outlined in section 5 of this report, it is recommended that Members:
2.1 Confirm they wish to continue to award 0% discounts for 2 nd homes and those homes that are empty and uninhabitable (Class D) and empty and unfurnished (Class C), option 7.1.
2.2 Confirm the continuation of the empty property premium on the Council Tax charge for properties empty for over 2 years, option 7.5, and an increase in that premium by 100% to 200% for 2020/21 for those properties empty for 5 years or more, option 7.6.
2.3 Confirm the continuation of provision to remove the empty property premium on a discretionary basis for up to 12 months from date of purchase for new owners who are actively renovating the property to sell or place on the rental market, option 7.7.
2.4 Confirm they wish to continue the Special Constabulary (Police) Discount, option 7.2 or cease this arrangement with effect from 31 March 2020, option 7.3.
2.5 Confirm they wish to continue the Volunteer Reserve Forces Discount, option 7.4, for which there have been no claims in 2019/20.
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2.6 Confirm the continuation of the current Care Leavers Discount for 2020/21, option 7.8.
2.7 Confirm the continuation of the existing Local Council Tax Reduction scheme which awards a maximum discount to Working Age households on low incomes of 80% of their liability, option 7.10.
This is a key decision. The matter is in the Forward Plan – 0066/19
3. Reasons for Recommendation
3.1. With regard to providing zero discounts for empty properties and charging an additional 100% premium for those that have been empty more than 2 years, and an additional 200% premium for those properties empty for 5 years or more. The city currently has a demand for accommodation that exceeds the number of properties available within its boundaries and there is ongoing concern regarding owners leaving properties empty. The historical Government Council Tax exemption scheme pre April 2013 rewarded such lack of activity, but by using new local powers since to reduce the level of discount awarded on empty homes and by introducing a premium for those empty more than 2 years, there is evidence that the number of long-term empty properties has reduced.
3.2. From 01 April 2020 the Government has amended Council Tax legislation to enable Local Authorities to increase the additional premium for properties that have been empty for more than 5 years to 200% of the standard Council Tax charged as well as the current charge of 100% more for those properties empty more than 2 years. The purpose of this increase is to encourage empty properties to be brought back into use and this report recommends the Council apply the 200% premium for this reason. However, in order not to deter or penalise new owners of properties that have purchased them to renovate for occupation, to sell, or to place on the rental market it is recommended that Council Tax officers are continued to be given the discretion to remove the additional premium for a period of up to 12 months from date of purchase for new owners who are actively renovating the property for these reasons.
3.3. The Special Constables local discount encourages citizens living in the City to volunteer as Special Constables by providing a reward for their work.
3.4. The discount for Volunteer Reserve Forces recognises the service of local reservists called up to serve their country abroad.
3.5. From April 2013 Local Council Tax Reduction replaced the national Council Tax Benefit scheme, with reduced Grant funding from the Government for the scheme meaning Local Authorities either had to find funds to subsidise the scheme, or start to charge some households who previously did not pay Council Tax. The Council decided to implement a scheme requiring all working age households to pay a minimum of 20% of their liability.
3.6. Members could choose to change the minimum amount that working age households have to pay from the current 20%, however there is a requirement
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that Local Authorities wishing to vary their schemes must hold a formal public consultation. As it is recommended that the scheme remains at 20%, a consultation has not taken place.
3.7. In 2014/15 when the 20% minimum payment was introduced the in-year collection rate for Council Tax was 93.63%, with collection in 2019/20 being 93.71%. It is therefore considered to be the correct option to continue with the same scheme for 2020/21 as payment levels of Council Tax have remained consistent.
3.8. With regard to the Care Leavers Council Tax discount, the Government’s care leavers’ strategy, Keep on Caring, published in July 2016, encouraged councils to consider the role of a corporate parent ‘through the lens of what any reasonable parent does to give their child the best start in life’. Local Authorities were encouraged to consider exempting care leavers from Council Tax using the powers already at their disposal. Local Authorities must plan for looked after children so that they have the support they need as they make their transition to the responsibilities of adulthood.
3.9. In its role as Corporate Parent for those young people in Local Authority care from 1 April 2018, the Council introduced a local Council Tax Discount under section 13A(1)(c) of the LGFA 1992 for young people leaving the care system as a result of reaching the age of 18. The discount enables the Local Authority to support those care leavers who would otherwise struggle with the transition from care to independence, enabling them to avoid debt and giving them more time to learn to manage their finances.
4. Background
4.1. Council Tax discounts and exemptions in England and Wales are provided for and governed by The Local Government Finance Act 1992, The Council Tax (Exempt Dwelling) Order 1992 and The Council Tax (Prescribed Class of Dwelling) (England) Regulations 2003, all of which have been subject to various amendments between 2000 and 2012. Amendments brought about by The Local Government Act 2003 in conjunction with the Council Tax (Prescribed Classes of Dwellings) (England) Regulations 2003 (as amended) and The Local Government Finance Act 2012, allow the Local Authority, via its Executive to review Council Tax Discounts awarded under Section 11(2)(a), 11A and 13A(1)(c) of the LGFA 1992.
4.2. Local Government Act 2003 and the Council Tax (Prescribed Classes of Dwellings) (England) Regulations 2003, allow the Local Authority, via its Executive to reduce the Council Tax Discount awarded with reference to furnished second homes (Section 11A). In addition it allows the Local Authority to introduce its own discount categories to reflect local circumstances and requests (Section 13A).
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4.3. Following annual reports to Cabinet, the following Discounts are currently set to 0%
Discount Year set to 0% 2nd homes discount 2013/14 Empty and Uninhabitable (Class D) 2013/14
Empty and Unfurnished (Class C) 2016/17
4.4. Discounts under Section 13A(1)(c) currently in operation are:
Discount 2019/20 award estimation
• volunteer reserve forces 75% £0 • special constable discount 25% per individual £11,200 • Care Leavers discount Up to 100% £43,300
4.5. From 1 April 2013 the changes brought under the LGFA 2012 allowed Local Authorities to charge a premium of up to 50% on those properties that had been empty and substantially unfurnished for more than 2 years. This was increased to 100% from 1 April 2019.
The premium under Section 11B currently in operation is:
Additional charge Amount • Long term premium(2 years) 100% £458,000
4.6. From 1 April 2014 changes brought under the LGFA 2012 required Local Authorities to introduce a Local Scheme for the reduction of Council Tax for those on low incomes following the abolition of the national Council Tax Benefit system. Presently every working age household in Hull is paying a minimum of 20% of their liability in accordance with the Council’s Local Council Tax Reduction scheme which for a Band A property in 2019/20 is £223.93 or £167.95 if the liable person is a single occupier.
4.7. Awards of Council Tax Reduction are currently made to 19,502 working age households in the city including 15,205 households that receive the maximum 80%.
Awards of Council Tax Reduction for 2019/20 are forecast to be:
Council Tax Reduction Schemes 20/19/20 forecast • Council Tax Reduction 80% working age maximum £13.14m 100% maximum for pensioners £ 9.48m
• This decision results in £6.84m of Council Tax being collectable from this group including £2.77m from those that have 20% to pay after the reductions have been applied.
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5. Council Tax discounts policy framework.
5.1. Care needs to be taken to ensure that any discounts granted are legal and in keeping with the Council’s policies. Members could consider a broader debate which covers the strategic merits of awarding Council Tax discounts to specific groups. However great care needs to be taken to consider the legal and financial implications of changing existing discounts or introducing new discounts especially within the current financial climate. Any debate would have to adhere to the Councils strategic policy while balancing financial implications.
5.2. For these reasons a reference needs to be made to the current policy framework when considering changing, withdrawing or introducing new discounts. Any proposed council tax discount must satisfy:
• That the award of any discretionary discount is legal.
• That the awarding of any discretionary discount to any individual or group of individuals is made within the context of national or Council policy and that the benefit to the individual or group of individuals identified is directly in line with furthering of the strategic or corporate aims of the Council.
• That the implementation of any such award is administratively and operationally manageable with existing Council resources.
• That the awarding of any discretionary discount is, throughout the period of the award, financially sustainable.
• That any individual or group of individuals awarded the discretionary discount is precisely and accurately defined to minimise the risk of class action, which may broaden the award beyond the individual or group of individuals envisaged by the council to be the beneficiaries of any such award.
• That any and all awards are open to annual review and can be amended or withdrawn on an annual basis.
6. Issues for Consideration
Class B Discounts for Second Homes (furnished/ unoccupied property) Section 11(2)(a) and 11A (4)(a) of the LGFA 1992; Class C Discounts for Empty and Unfurnished dwellings and Class D Discounts for Empty and Uninhabitable dwellings under major repair/alteration Section 11(2) a) and 11A(4A) of the LGFA 1992.
6.1. Members are asked to confirm the continuation of previous year decisions to reduce these awards to 0%. During 2019/20, £3.93m is collectable from taxpayers with properties in these categories.
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Empty Property Premium Section 11B LGFA 2012
6.2. Changes within the LGFA 2012 allowed Local Authorities to charge an additional premium (known as the long term empty premium) of up to 100% on those properties that had been empty and substantially unfurnished for more than 2 years. There are currently 434 properties empty for 2 or more years that are subject to the premium. The chargeable amount of the premium has increased the amount collectable for 2019/20 by circa £458,000.
6.3. Confirmation is required to continue to charge an additional premium for properties that have been empty and substantially unfurnished for more than 2 years for 2020/21.
6.4. Regulations now allow Local Authorities to charge an additional premium of 200% from 1 April 2020 for those properties empty for 5 years or more. Confirmation is required to increase this premium from 100% to 200% for properties empty 5 years or more.
6.5. It is recommended that where possible consideration is given to continuing the removal of the additional premium for a period of up to 12 months from date of purchase for those owners who are actively renovating the property to sell or place on the rental market.
Discretionary Discounts Section 13A(1)(c) (2013) of the LGFA 1992
6.6. From 1 April 2004 the Council has discretion to reduce the amount of Council Tax payable that is not covered by statutory discounts or exemptions under Section 13A from April 2004 amended to 13A(1)(c) from 1 April 2013. This discretion can be exercised in relation to particular individual cases or by determining a class of case. The reduction can be for a specific period of time and the liability can be reduced by any amount the Council thinks fit. Any discounts that are awarded are fully funded by Hull City Council.
6.7. When considering whether to grant or vary a discretionary discount to any person or group Members need to be aware of the possibility of a legal challenge from persons or groups who may believe that their circumstances are similar to any such person/group. There must be strict adherence to the Council’s policy on awarding discretionary discount with appropriate linkages made to the Council’s Aims and Objectives. Therefore Members need to consider all the factors when creating any new discounts under this section of the Act as the implications of any successful legal challenge could have significant financial consequences.
6.8. Since 1 April 2004 the Full Council has agreed that two classes will benefit from a discretionary discount: Volunteer Reserve Forces Discount and Members of the Special Constabulary (Police) Discount.
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Volunteer Reserve Forces Discount – Section 13A(1)(c) of the LGFA 1992
6.9. From the 01 April 2004 a volunteer reserve forces discount was defined as a category for people within the Volunteer Reserve Forces who are enlisted to serve operationally within their respective force for a period in excess of 28 days. The eligibility criteria for the discount are given in Appendix 1.
6.10. The cost of this discount for 2018/19 was £0.00 and there have been no claims so far in 2019/20. The financial projection for 2020/21 is likely to be less than £1,000. It is difficult to predict as much depends on national military commitments and the consequent number of eligible reservists. No other groups have challenged the award of this discount and minimal feedback from other tax payers since 2004 has been to endorse the discount.
6.11. Consideration is required for this discount to continue for this class for 2020/21
Members of the Special Constabulary (Police) Discount 13A(1)(c) of the LGFA 1992
6.12. From the 1 April 2004 a discount was agreed by Full Council for eligible Special Constables which is paid to the Humberside Police Authority as an allowance. Direct discounts cannot be made to Police Constables due to legal requirements specific to the police.
6.13. The allowance is equivalent to a maximum 50% Council Tax discount which the City Council reimburses to the Police Authority. The allowance is paid annually in arrears. The allowance is aimed to improve recruitment of special constables in the Hull area.
6.14. The allowance scheme requires approval from the Home Office which has currently approved the scheme up to 31 March 2020, subject to the Council maintaining the necessary funding. Should members wish to extend the allowance for a further year it would be conditional on the Home Office agreeing the extension.
6.15. The cost of the discount has to be fully met by the City Council and the historical number of eligible claims and associated costs are detailed below:
(1) (2) (3) (4) Number of special Number of special Number of Year constables constables eligible Council Tax Cost operating within to apply. Claims paid. Hull CC. 2013/14 165 110 51 £13,273 2014/15 154 125 66 £15,730 2015/16 127 108 64 £13,937 2016/17 Not available 71 38 £7,703
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2017/18 Not available 29 23 £5,693
2018/19 Not available 27 26 £11,208
6.16. The eligibility criteria for this allowance are given in Appendix 2.
6.17. The difference between column (1) and column (2) is because Humberside Police had their own criteria for awarding an allowance of £1,500 per annum whereby the special constable had to work 16 hours per month to receive the allowance. Hence column (1) shows the number of special constables working in Hull; column (2) shows the number of special constables working 16hrs plus a month, who were eligible for the £1,500 police allowance, but also eligible to claim the Council Tax allowance. The average annual payment to each special constable is circa £431.The reduction in the number of eligible special constables overall is due to the current policy of Humberside Police to recruit full-time police officers. The increase in the value of awards in 2018/19 is due to special constables working more hours, so more qualifying each month of the financial year.
6.18. Humberside Police Service ceased their discretionary payment of £1500 per annum to Special Constables from the 1st April 2010. Humberside Police advised that they saw little change in the number of special constables since the cessation of their discretionary payment. This therefore suggests that the payment of the £1500 allowance was not a significant factor in someone deciding to become a special constable. If Cabinet decides to continue with the special constable allowance, it is suggested that the 16 hour minimum per month working limit continues to be included within the Councils criteria.
6.19. Due to this payment being made annually in arrears the actual cost will not finally be known until the end of each financial year. Cost will depend on the number of eligible Special Constables serving during the year, the tax banding of their home and the level of the discount. Therefore only very broad estimates of future costs can be given. Based on latest trends it is estimated the cost for 2019/20 will be approximately £12,000. The cost of any allowances agreed will be charged to the Council’s General Fund.
6.20. Members could cease the Special Constables Council Tax Allowance on 31 March 2020 as the current trend following the of the £1,500 police withdrawal allowance does not appear to be adversely impacting on Special Constable numbers. This would provide a saving to the General Fund of up to £12,000 for 2020/21.
6.21. Consideration is required for this discount to continue for this class for 2020/21.
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Council Tax Reduction (LGFA 2012 – SI 2012/2885)
6.22. From April 2013 Local Council Tax Reductions replaced the national Council Tax Benefit scheme, with reduced Grant funding from the Government for the scheme meaning Local Authorities either had to find funds to subsidise the scheme, or start to charge some households who previously did not pay Council Tax. The Council decided to implement a scheme requiring all working age households to pay a minimum of 20% of their liability. Following receipt of transitional funding from the Government for 2013/14 this minimum payment was reduced to 8.5% of their liability for one year only. Following the cessation of transitional funding, the minimum payment reverted back to 20% for each financial year since 2014/15.
6.23. Presently there are 19,502 working age households in the City receiving a reduction in their Council Tax through the Council’s Local Council Tax Reduction scheme, including 15,205 households that receive the maximum 80%. This decision results in £6.8m of Council Tax being collectable from this group including £2.7m from those that have 20% to pay after reductions have been applied.
6.24. Members could choose to change the amount that working age households have to pay from the current 20%, however there is a requirement that Local Authorities wishing to vary their schemes must hold a formal public consultation, which would normally last 12 weeks. As it is recommended that the scheme remains at 20%, a consultation regarding changing this percentage has not taken place.
6.25. Members are asked to confirm that the current 20% minimum payment following Local Council Tax Reduction remains in place for the 2019/20 financial year.
Council Tax Discount for Care leavers - Section 13A(1)(c) of the LGFA 1992
6.26. In the Government’s care leavers’ strategy, Keep on Caring, published in July 2016, they encouraged Councils to consider the role of a corporate parent ‘through the lens of what any reasonable parent does to give their child the best start in life’. In relation to this, Local Authorities were encouraged to consider exempting care leavers from council tax using the powers already at their disposal. Local Authorities must plan for looked after children so that they have the support they need as they make their transition to the responsibilities of adulthood.
6.27. In its role as Corporate Parent for those young people in Local Authority care, the Council put in place a local Council Tax Discount under section 13A(1)(c) of the LGFA 1992 for young people leaving the care system as a result of reaching the age of 18. The discount enables the Local Authority to support those care leavers who would otherwise struggle with the transition from care to independence, enabling them to avoid debt and giving them more time to learn to manage their finances.
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6.28. For the purposes of this discount a care leaver is a young person who left care as a result of reaching 18 years of age including young people who move into the City who have been cared for by other Local Authorities as to exclude them would unreasonably discriminate against some young people purely on the basis that they have moved into the City.
6.29. The discount is awarded after other statutory exemptions or discounts have been applied to ensure the care leaver has no Council Tax to pay. Therefore the amount of discount awarded varies depending on other discounts that would apply but could be up to 100% of Council Tax liability for that individual for the year applicable.
6.30. Where there is a shared liability for Council Tax the discount is only paid to cover the share that the looked after person is liable for.
6.31. The discount is also payable for those households that lose a Council Tax discount as a result of a young person in care turning 18 and becoming an adult in the household for Council Tax purposes, such as the loss of single person discount. This supports a young person in their transition to independence by removing any financial loss to the household supporting them. This element of the discount applied to care leavers aged18 to 20.
6.32. For those aged 18 to 20, the discount is awarded automatically based on notifications received from the Council’s Leaving Care Team to the Council Tax department. Care Leavers who move into the City aged 18 to 20 are able to apply directly to the Council for the discount. Verification of their status is required from the Local Authority who cared for them up to the age of 18.
6.33. Those aged 21 to 24 years of age (inclusive) can apply for a discretionary care leaver’s discount which will consider their income against current needs. This enables support to continue for those who still need financial help beyond the age of 21 while recognising the independence others may have achieved by this age.
6.34. This discount does not apply to those young people who when under the age of 18 had looked after status for a period of time purely on the basis they were remanded into Youth Detention Accommodation or Local Authority accommodation awaiting trial.
6.35. There are currently 86 care leavers who qualify for this discount with the award for 2019/20 estimated to be £43,300 per annum.
6.36. Members are asked to confirm that the Council continue with the Care Leavers local discount for 2020/21.
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7. Options and Risk Assessment
2nd home discount and discounts for empty and uninhabitable and empty and unfurnished properties
7.1. To continue with the reduction to zero percent for these awards will result in an estimated £3.9m collectable during 2020/21.
Special Constables Allowance
7.2. To continue with the special constable discount at a cost to the authority of approximately £12,000 to demonstrate support for this group of volunteers during 2020/21
7.3. To withdraw the discount for special constables on the grounds that the financial incentive in encouraging special constables seems low given there has been minimal reduction in the numbers applying to be special constables since the withdrawal of the police authority payment. This option would save the Council circa £12,000 in 2020/21.
Volunteer Reserve Forces
7.4. To keep, withdraw or vary the current locally defined discretionary discounts under section 13A for volunteer reserved forces. The discount is currently awardable to members of the volunteer reserve forces serving abroad who are claiming a 25% discount on their Council Tax due to the fact that they are the only qualifying person in the property included in the calculation of their Council Tax liability. There have been no claims for this discount in the last 9 years.
Empty property premium
7.5. To continue with the charging of an empty property premium for properties empty for more than 2 years. There are currently 434 properties empty for 2 or more years that are subject to the current 100% premium. The chargeable amount of the premium has increased the amount collectable for 2019/20 by circa £458,000. The number of properties empty for more than 2 years has dropped from a figure of 575 at the same point in 2018.
7.6. To increase the empty property premium to 200% for those properties empty for 5 years or more as allowed under the Property in Common Occupation and Council Tax (Empty Dwellings) Act 2018. This increase would in result in an additional £137,000 in Council Tax collectable.
7.7. To continue the provision for the Council Tax officers to have the discretion to remove the additional premium for a period of up to 12 months from date of purchase for new owners who are actively renovating the property to sell or place on the rental market.
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Care Leavers Discount
7.8. To continue with the Care Leavers discount introduced in April 2018. This would support an estimated 90 care leavers during 2020/21 by way of reductions to their or their households Council Tax at a cost of circa £45,000 to the Council.
7.9. To discontinue the current Care Leavers discount from the 31 March 2020.
Council Tax Reduction
7.10. To continue the maximum discount awardable to Working Age households on low incomes being 80% of their liability. Awards of Council Tax Reduction are currently made to 19,502 households in the City including 15,205 households that receive the maximum 80%. This decision results in £6.8m being collectable from this group including £2.7m from those that have 20% to pay.
Risk
7.11. There is a risk that any change to current discounts will attract adverse publicity from the affected tax payers. This can be managed following the Councils decision by way of information included in the billing highlighting how some of the sums raised and collected are essential revenue in the face of reduced grants paid to the authority.
7.12. There is a risk that the indicated collectable sums may change due to actions taken by taxpayers as a result of the change in charges e.g. number of properties empty for over 2 years may reduce as owners react to avoid the extra cost, although this risk has not materialised in the time this premium has been in place.
7.13. There are risks that by not continuing a discount for care leavers, the Council would not be providing a financial supporting mechanism to a vulnerable group for which the Council is the corporate parent.
7.14. There is a significant risk should members wish to deviate from the 80% maximum Council Tax Reduction (Support) at Option 7.9 that the Council would be open to legal challenge by not having consulted with Taxpayers. By adopting a different scheme, without having formally consulted, the Council would potentially be operating a scheme that was ultra vires.
Staffing
7.15. The Revenues and Benefits Service was transferred to Civica UK Ltd on the 1 November 2015. This report has been prepared informed by advice from officers from the company upon the practical application of the proposals. It should be noted that any change to the discounts scheme that may require
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more or less resource to administer may result in change control negotiations to the contract at the Contract Management Board.
8. Consultation
8.1. There is only a legal requirement to formally consult on any proposed changes to the Local Council Tax Reduction scheme introduced in April 2013. See 7.16 regarding risk.
9. Monitoring Officer Assurance Statement
9.1 The majority of the proposals are unchanged from those agreed in 2019. The one change relates to properties that have been vacant for a period of 5 years or more. For these properties the proposed increase from 100% to 200% is within the arrangements permitted by law. It is anticipated that the amendment will further discourage owners leaving properties unoccupied. However, to avoid any perception of unfairness to a new owner the retention of the discretion to not apply the increase for a period of up to 12 months will allow time to undertake any renovation is appropriate.
10. Section 151 Officer Assurance Statement
10.1 The financial implication from the recommendations in this report are included within the budget proposals elsewhere on this agenda. If a different approach was taken over the level and type of discounts that were thought appropriate there would need to be an undated financial analysis completed in order to calculate the impact on the Council’s available resources.
11. Comments of City Human Resources Manager
11.1 There are no staffing or equality issues arising for the Council
12. Comments of Overview and Scrutiny
12.1. This report is due to be considered by the Finance and Value for Money Overview and Scrutiny Commission at its Budget meeting of Friday, 24 January, 2020. Any comments or recommendations agreed by the Committee will be tabled at Cabinet, on Monday, 27 January, 2020. (Ref. Sc5863)
13. Comments of the Portfolio Holder for Finance
13.1 I am delighted the Administration is bringing in this change. As most young people living at home, leave aged above 25 this Council Tax burden compounds their loss and inequity of life chances, this progressive move effectively levels that playing fields as we as the corporate parent do not
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charge our kids. I fully support the retention of the special constable discounts and keeping the policy that drives the reductions of empty homes.
14. Conclusions
14.1 Changes introduced under the LGFA 2012 provided considerable latitude in revising existing Council Tax discounts and introducing new discounts to replace those exemptions that ended on 31 March 2013.
14.2 The Council can review the discounts created for each financial year should it so wish, but they must be made before the 1st April in the year in which they are introduced regarding Section 11A.
14.3 Great care needs to be taken to consider the legal and financial implications of changing existing discounts or introducing new discounts. Any changes also need to comply fully with the requirements of the Council’s Policy Framework.
14.4 The removal of mandatory exemptions for empty and uninhabitable properties from 1 April 2013 and the further reduction of those for empty and unfurnished properties from the 1 April 2016 provided an opportunity through Council Tax collection of an additional income stream to the Council in the face of cuts to grant funding from Central Government which allows the authority to maximise revenue in order to minimise the impacts of Welfare Reform to citizens of the city and the impact that cuts to services would bring.
14.5 The city currently has a demand for accommodation that exceeds the number of properties available within its boundaries. There is continuing concern that owners are leaving properties empty. The historical Government Council Tax exemption scheme pre April 2013 rewarded such lack of activity, but by using new local powers since to reduce the level of discount awarded on empty homes and by introducing a premium for those empty more than 2 years, there is evidence that the number of long-term empty properties has reduced. Continuing the empty property premium of 100% for those homes empty 2 years or more and increasing to 200% for those empty 5 years or more will assist with the intention of reducing the number of long-term empty properties in the city.
14.6 The introduction of Local Council Tax Reduction in 2013/14 saw 20,000 households having to pay some Council Tax for the first time. Presently the minimum sum payable by working age households in Hull is 20%. Collection rates are stable and therefore it is therefore considered to be the correct option to continue with the same scheme for 2020/21.
14.7 The continuation of a Local Council Tax Discount for Care Leavers will maintain additional financial support for this vulnerable group as part of the Council’s responsibilities as a corporate parent for those in care.
14.8 A discount for Volunteer Reserve Forces recognises the service of this key group, although the discount is funded fully by the Council. It is, however,
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important to still consider that other individuals or groups of the City’s population may subsequently lobby for a local discount.
14.9 The Special Constables allowance provides incentive for local residents to become Special Constables and recognises their contribution to communities in the city. Home Office approval will be required before the Special Constables Allowance can be paid for 2020/21
David Bell – Director of Finance and Transformation
Contact Officers: Howard Dye (HullCC) Telephone number: 613554 Andy Sims (Civica) Telephone number: 613021
Background Documents:
The Local Government Finance Act 2012
Appendix 1
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Eligibility Criteria for Volunteer Reserved Forces Discount
A person will be able to apply for a maximum 75% discount of the full charge where the following criteria are met:
1. The person claiming must be claiming a 25% discount on their Council Tax due to the fact that they are the only qualifying person in the property included in the calculation of their Council Tax liability.
2. They are enlisted into the armed forces for a period in excess of 28 days.
3. They give up their current paid job or benefit to be an employee of the armed forces for a period in excess of 28 days.
4. The Council are provided with call up papers and end of duty notifications to confirm service.
5. The 75% discount can be claimed only for the period set by the criteria in 1 and 2 above.
6. Volunteer Reserve Forces consists of The Royal Navy Reserves, The Royal Marine Reserves, the Territorial Army and the Reserved Air Forces.
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APPENDIX 2
Eligibility Criteria for Special Constables Allowance.
A person will be able to apply for a maximum 50% discount of the full charge where the following criteria are met:
1. Is a member of the Humberside Police Special Constabulary.
2. The majority of their duties are to benefit the residents of Hull City
3. They must be liable as an individual for the Hull City Council – Council Tax Charge or they must be jointly or severally liable for the Council Tax Charge
4. Only one application per household can be made.
5. Where two or more Special Constables are in occupation of a single property, a total 50% discount of the full band charge will be awarded.
6. Where a single occupier claims the discount, the discount will be 25% of the full band charge (as a 25% reduction will already be awarded as a single occupier).
7. A person who is not liable to pay the Council Tax charge direct to Hull City Council cannot apply for a discount.
8. That any discount awarded be calculated on a daily basis to reflect new starters and leavers within the Special Constabulary.
9. The allowance will only be paid where the claimant is up to date with their current year Council Tax payments.
10. A special constable must undertake a minimum of 16 hours duty per month to be eligible for the Council Tax allowance.
A charge payer is as defined by Section 6 Local Government Finance Act 1992.
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Implications Matrix This matrix provides a simple check list for the things you need to have considered within your report If there are no implications please state I have informed and sought advice from HR, Legal, Discussions have taken place with Finance, Finance, Overview and Scrutiny and the Climate and Portfolio Holder for Finance. Change Advisor and any other key stakeholders i.e. Portfolio Holder, Area Committee etc prior to submitting this report for official comments Is this report proposing an amendment to the budget No or policy framework?
Value for money considerations have been accounted Yes. The recommendations have been for within the report considered in tandem with other changes to the Council Tax scheme and grant funding arrangements for the authority. The report is approved by the relevant Corporate Yes. Director
I have included any procurement/commercial No implications issues/implications within the report I have liaised with Communications and Marketing on Yes any communications issues
I have completed and Equalities Impact Assessment An equalities impact assessment has been and the outcomes are included within the report completed on the Local Council Tax reductions Scheme. I have included any equalities and diversity Yes, consideration included relating to the implications within the report criteria for awarding Care Leavers Council Tax Discount. Those who have left care and moved into the City will also be awarded the discount to prevent discrimination within that demographic group. Any Health and Safety implications are included within no implications the report Any human rights implications are included within the no implications report I have included any community safety implications and no implications paid regard to Section 17 of the Crime and Disorder Act within the report I have liaised with the Climate Change Advisor and no implications any environmental and climate change issues/sustainability implications are included within the report I have included information about how this report The information contributes to the Councils contributes to City/Council/ Area priorities within the budget setting process for 2020/21 which report informs the Councils priorities.
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Report to:
Council 27 February 2020
General Fund Revenue Budget 2020/21 and Medium Term Financial Plan 2020/21 to 2022/23
Report of the Leader of the Council
Purpose of the Report 1. To present to Council: The Leader’s General Fund Revenue Budget 2020/21 and Medium Term Financial Plan 2020/21 to 2022/23. The following Appendices are attached to the report:
A (i) - Summary of the Budget Consultation Exercise
A (ii) - The Leader’s Budget Statement 2020/21
B (i) - Analysis of Budget Movements 2019/20 to 2020/21
B (ii) - Schedules of continuing savings requirements for 2020/21
B (iii) - Schedule of Review Activity for 2021/22 and beyond
B (iv) - Service Profiles
C - Schedules of Fees and Charges
D - Analysis of Business Units’ Budgets
E - 3 year Medium Term Financial Plan 2020/21 to 2022/23
F - Policy Regarding Capital Receipts Flexibility
G - Risk Assessment of level of General Reserves
H - Schedule of General and Earmarked Reserves
I (i) - Hull City Council / Clinical Commissioning Group - Integrated Financial Plan
I (ii) - Schedule of Planned review activity
J - Council Tax and Precepts
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K (i) - DSG – Schools and Central Blocks K (ii) - DSG – High Needs Block K (iii) - DSG – Early Years Block
L - CIPFA Resilience Index
Executive Summary
2. The report provides the suite of assumptions and technical underpinnings for the Leader’s Budget statement, shown at Appendix A (ii) and the savings proposals included at Appendix B (i).
3. The report also sets out the levels of Council Tax arising from the Leader’s Budget Proposals for 2020/21. The resultant increase of 3.99% is in line with the referendum limits and includes a 2% Social Care Precept.
Recommendations
4. The Council is recommended to:-
i) Note the Leader’s Budget Statement 2020/21 as set out in Appendix A(ii);
ii) Approve the Council’s 2020/21 Revenue Budget savings and Service expenditure allocations as set out in Appendices B (ii) and D; subject to any budget amendments properly notified to and approved by Council in line with the Constitution;
iii) Note the proposed fees and charges for services at Appendix C
iv) Note the Medium Term Financial Plan as set out at Appendix E;
v) Approve the Capital Receipts Flexibility Strategy set out at Appendix F:
vi) Approve the contribution to/from reserves and levels proposed at Appendix H;
vii) Approve the Health and Social Care Integrated Financial Plan, showing the expected spend in the City of both the Council and Clinical Commissioning Group (CCG), and the review activity at Appendix I, and support decision making relating to funds within this Plan being subject to consideration and approval by the Committees in Common. viii) Approve the levels of Council Tax, noting the precepts of the Police and Crime Commissioner for Humberside and the Humberside Fire Authority as set out at Appendix J ix) Approve the allocations of Direct Schools Grant (DSG) including those relating to High Needs and Early Years as set out at Appendix K.
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x) Note the comments of the Director of Finance and Transformation and Section 151 Officer on the robustness of the Budget and adequacy of reserves as set out at paragraph 66 and informed by the CIPFA resilience index summarised at paragraph 60 and Appendix L.
Revenue Budget 2020/21 - Consultation
5. The Government announced details of the provisional Local Government finance settlement on 20 December 2019. The details were mirrored in the final settlement issued 6 February 2020, although the parliamentary debate and formal confirmation is now scheduled for the 24 February. The proposed funding allocations are at levels broadly in line with the indications provided in the Chancellor’s Spending Round announcement in September 2019. This is a one year only settlement with a spending review to be conducted in 2020 for future years. The budget for 2020/21 reflects the funding detailed in the settlement and the resulting MTFP movements required to produce a balanced position.
6. Budget proposals were considered by Cabinet on 25 November 2019 with the detailed budget papers approved by Cabinet on 27 January following Value for Money and Overview Scrutiny of 24 January. Meetings have also been held with representatives of the Voluntary Sector, and Young People of the city as well as the Business Community regarding the Council’s budget. The Council has also undertaken a broader exercise regarding meeting Council priorities in an environment of reducing public sector funding through the People’s Panel in the form of market research. A summary of the consultation exercise is shown at Appendix A (i) alongside the Leader’s Budget Statement which is attached at Appendix A (ii).
7. Subsequent to January Cabinet, the Leader’s Budget proposals have been amended to include provision to meet additional costs arising following the Ofsted monitoring visit report on Children’s Safeguarding Services. £3m has been identified within the Capital Programme to meet costs up to this level, including £1m earmarked to support fostering and adoption initiatives, to be drawn down in line with Member approval. The activity will be funded from capital receipts allocated to meet the costs of transformational activity.
Local Government Finance Settlement – Core Funding and Business Rate Retention
8. The Local Government Settlement for 2020/21, was issued on the 6th February 2020, and provides funding allocations for one year only. Following the previous four year financial settlement which ends in 2019/20, it was anticipated that there would be a full spending review during 2019. However, the political turmoil in Parliament has meant that a full review has not been completed. In September 2019 the Chancellor announced a single year spending ‘round’ which provided an outline of government’s spending plans for 2020/21 which is consistent with the Settlement.
3 Page 101 of 324 9. Whilst there has been an increase in Core Spending Power for 2020/21, mainly due to the additional social care grant and the 2% social care precept on council tax, this has done little to address the significant loss in funding in the previous ten years. The Council has lost £130m in Core Spending Power between 2010 and 2020, (a 55% reduction). Although significant reductions were faced across the whole local government sector, Hull and similar authorities, which have a high level of need but suffer from relatively low property values and economic growth, have continued to suffer disproportionately from the cuts in funding.
10. The spending round announcement, in September, also confirmed that both the Fair Funding Review implementation and the possible move to 75% Business Rate Retention would be delayed one year to 2021/22. This has increased the level of uncertainty around future local government funding and made any effort for long term planning more difficult. The Government has indicated that it intends to retain the system of ‘top ups and tariffs’ regarding Business Rates which is vital to cities like Hull, as it provides an element of redistribution from wealthier to poorer areas. It is essential for Hull that the Government ensures equity in the distribution of overall resources to adequately reflect comparative local needs and the differing abilities of councils to raise income locally. The Council will continue to lobby to best effect through direct responses to Government consultation proposals as well as the Local Government Association and SIGOMA (the Special Interest Group of Metropolitan Authorities) within it.
11. In Hull the increase in core funding (settlement funding assessment) in the next year is 1.6% as shown in Table 1 below. Despite the small increase in estimated funding in 20/21, funding is still likely to be below current cost levels as service demands continue to increase. It is within this context that the Council must seek to continue to control its costs in order to bring expenditure into line with available resources.
Table 1 – Movement in Core Funding 2019/20 to 2020/21 and projected 2021/22
2019/20 2020/21 2021/22 Change - Change £m from 2019/20 £m £m (Est) (Est) A B £m % C £m % Revenue Support Grant 23.99 24.38 0.39 1.6% 25.00 1.01 4.2% Business Rate Funding - Top-Up 39.26 39.90 0.64 1.6% 40.88 1.62 4.1% - Retained Business 41.01 41.68 0.67 1.6% 42.75 1.74 4.2% Rates 80.27 81.58 1.31 83.63 3.36
Total Core Funding 104.26 105.96 1.70 1.6% 108.63 4.37 4.2%
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Balancing the 2020/21 Budget
12. The 2019/20 Budget approved by Council in February 2019 included savings of £9.303m with additional planned reductions of £3.150m in 2020/21 – although many of these savings originated during the 2017/18 budget round. As such, management activity has continued to focus on the successful completion of the existing savings plans and cost reductions as approved at February 2019.The projections set out in the July 2019 MTFP update to Cabinet suggested that there was a potential deficit in 2020/21 of £7.2m (£9.9m 2021/22). 13. However, following the Chancellor’s Spending Round announcement in September 2019, the MTFP Update considered by Cabinet in November suggested that a balanced budget for 2020/21 was achievable without the need for significant additional savings or impact on service delivery. Whilst the Update identified addition spending pressures, beneficial movements were also identified alongside the Government’s indication that additional funding would be provided for care services. Appendix B(i) shows the budget movements from February 2019 to the balanced position reflected in this report and are summarised below.
Implications of 2019/20 Activity and Outturn Projections for Care Services
14. Formal revenue monitoring reports during 2019/20 have highlighted significant cost pressures within both Children’s and Adults Services arising from increased activity levels. As a result the proposed budget and MTFP include additional estimates to reflect the reality of the existing cost base with an additional £3.5m being included for 2020/21 for CYPS and £5.5m for Adult Social Care.
Priority Investments
15. Although it is necessary to restrict additional revenue growth in order to balance the budget, a limited number of additional investments have been incorporated into 2020/21 plans.
CYPS Transformation
16. It remains necessary that CYPS devise and deliver changes in service delivery in order to minimise the cost implications, improve outcomes for young people and families, and drive down the cost of placements in future years. Service developments are informed by the on-going response to OFSTED inspections and an additional £1.2m of investment funding has been included in the base budget.
17. Of this funding is being used £0.700m has been invested in Phase 3 of the transformation programme ensuring that staffing arrangements are fit for purpose and have capacity to manage case load numbers in line with expected good practice range. This investment is predominantly in the Independent Conference and Reviewing Service whose role is to challenge the Council and wider partnership on behalf of children and hold them to account. Investment has also taken place in the
5 Page 103 of 324 front line EHASH and VEMT teams and the Fostering and Supported Lodgings teams who support carers.
18. £0.500m is to be invested in Domestic Abuse resource. Nationally and in Hull Domestic Abuse is a factor in 50% of social work assessments and in over half of all serious case reviews. Various ‘whole family’ approaches to tackling domestic abuse have been developed and tested under the DfE’s Children’s Social Care Innovation Programme. The approaches differ but all view family members as one part of a complex picture and all include perpetrators in this picture as far as possible. These programmes have delivered promising outcomes, including significant reductions in repeat MARAC referrals and reductions in the proportion of children becoming looked after in cases which feature domestic abuse. Further work is needed to identify and adapt a model which would best ‘fit’ for Hull. The additional investment will be used to secure a model which has integrity and a strong evidence base in order to maximise impact and positive outcomes.
Council Commitment to Carbon Neutrality
19. The 2030 Carbon Neutral Strategy for Hull sets out the key challenges and activity required to meet the direction set by the Climate Emergency motion at Council in March 2019. The strategy identifies actions across eight themes; heat, power, mobility, consumption, innovation, skills and jobs, fair transition and carbon sequestration. The Capital Strategy identifies a number of projects primarily focused upon the energy and mobility themes at present some of which have the potential to generate a return on investment in the near term and support revenue budgets.
20. The delivery of the strategy requires enhanced resources within the climate change area and the revenue budget provides for three additional full time members of staff to create a climate change team within the Regeneration Service area and £200,000 has been included in the budget to meet these enabling costs. The staff will provide additional capacity to move the capital programme projects forward, enable wider engagement with stakeholders, deliver a communications plan internally and externally, build coalitions of partners around the key themes of action, develop new projects and seek external funding. In addition there is revenue funding to undertake the assessment work required to develop future spend to save projects and develop detailed roadmaps for the themes to build upon the strategy and create targeted investment streams with defined carbon savings to drive carbon neutrality forward across Hull over the next five years.
Staff Training
21. As budgets are squeezed and service demands increase the training and development of the Council’s staff is of critical importance. A review of the essential training and development requirements of staff identified a shortfall in available funding and as a result an additional £250,000 has been allocated to the Training Budget.
Capital Investment
6 Page 104 of 324 22. There is a need to invest in the Council’s assets and infrastructure in order to ensure the security of future service delivery. Details of the planned investment is included within the Capital Strategy and the associated increase in borrowing costs, £350,000, is reflected in the revenue budget.
Kat Card
23. The scheme is for young people up to 20 years of age and allows for unlimited travel across seven days on either of the bus operators networks. Bus operators discount the cost of the card alongside and the Council provide a further subsidy of £3.39 per card taking the cost to the customer down to £10 per card.
24. The scheme was funded from one off resources in 2018/19 and 2019/20, but has uptake has risen significantly in recent months and additional funding of £200,000 has been added to the base from 2020/21 to meet the expected costs.
Fly Tipping
25. £100,000 of additional resources have been allocated to enhance capacity in the dedicated team, improve response times and provide a more pro-active approach dealing with hotspot areas.
Taxi Marshalling
26. £60,000 has been allocated to fund a pilot scheme, to improve arrangements for both taxi drivers and passengers during busy periods.
Service Savings / Profiles
27. As part of the budget setting process, additional efficiency savings (i.e. those without direct impact on frontline services) of £1.229m (c0.5% of net spend) have been identified by Directors. The updated schedule of savings, totalling £4.279m (£3.050m brought forward from previous years including the final tranche of £2.800m arising from Adult Social Care Transformation) is shown at Appendix B(ii).
28. The forward projections, shown at paragraph 31 below, suggest that it is likely that the Council may face a material budget deficit in future years although the precise scale will not become clear until late 2020 at the earliest. As such it is essential that the Council protects its financial position by developing options capable of reducing the cost base, as maybe required through a programme of review activity.
29. It is not possible at this time to pre-determine the scale, or indeed the viability of savings associated with this programme of activity. Indeed, particularly with regard to the care services, the focus will be on delivering efficiencies and services benefits across the system thereby reducing future demand and cost. The focus over the coming years will be to develop, in good time options, which may include alternative service delivery models as well as potential savings, for Member consideration in the light of the prevailing financial context informed by Fair Funding. A schedule of proposed projects for further development is included at Appendix B(iii).
7 Page 105 of 324 30. Appendix B (iv) includes Service Profiles for individual departments, providing activity and operational information as context to the budget proposals.
2020/21 Budget and Forward Projections
31. The table below summarises the projected movements and identifies sums required to balance the budget in each of the next 3 years. In summary, after factoring in the approved savings, as detailed at Appendix B(ii), the projections show a balanced budget for 2020/21 but shortfalls in the next 2 years. The 2021/22 position will need to be addressed during 2020 when it is anticipated that the Government’s intentions regarding the future funding of Councils should be clearer. The 3 Year MTFP is shown at Appendix E with supporting narrative included in the paragraphs below.
32. Given the level of uncertainty with regard to future levels of local government funding, and the economy as a whole, together with the forecast budget deficit faced by the Council over at least the next 2 years, it is imperative that strict budgetary control is exercised across all services. The position within all services will continue to be closely monitored throughout 2020/21.
33. The provisional financial outturn providing details of 2019/20 actual spend against budget will be reported to Cabinet in May 2020 and this will inform the first formal revenue monitoring round for 2020/21. (The provisional outturn figures should be confirmed in July following the completion of the external audit of the Council’s accounts).
Table 2 – Year on Year Movements
2020/21 2021 /22 20 22/23 £m £m £m Movement in Resource Base -9,764 -9,257 -8,033
Contingencies and Budget 14,043 14,194 9,718 Pressures
Sum Required to Balance Budget 4,279 4,937 1,685
Savings - as at Appendix B(ii) -4,279 -250 0
Budget Shortfall after applying 0 4,687 1,685 savings Budget Shortfall – Cumulative 0 4,687 6,372
Funding
Council Tax
8 Page 106 of 324 34. Subject to Cabinet and Full Council approval, Council Tax projections have been reviewed and updated to reflect an assumed increase to the referendum level in operation for each year. The increase for 2020/21 includes 2% for a Social Care Precept that is available to authorities following the Chancellor’s announcement in the September Spending Round –this is assumed for one year only. So these amounts currently are:
• Increase of 3.99% in 2020/21; • Increase of 1.99% in 2021/22 and 2022/23.
35. Robustness of collection rates which have been maintained despite the introduction of the Local Council Tax Support Scheme and subsidy rules and the minimum charge of 20% for working age council tax support cases. The projections also reflect net increases in the number of homes which includes the Kingswood development.
Review of Charges for Council Services
36. Fee levels have been set at values consistent with recouping the cost of providing the service and protecting Council revenues whilst ensuring income targets are realistic in the light of the current economic climate. The achievement of income targets will be reflected within the in-year monitoring reports, along with the delivery of the approved savings. The proposed charges for 2020/21 are shown at Appendix C.
Business Rates and Enterprise Zones - Uplift in Business Rates
37. The Council is entitled to retain 100% of any increase in Business Rates arising within the designated Enterprise Zones. This additional funding can be used, in agreement with Local Enterprise Partnership (LEP), to support LEP priorities within the City .
38. The MTFP reflects the planned use of the EZ Business Rates uplift to support the Council’s regeneration activities through revenue funding of £2.7m in 2020/21 and in future years, with the balance earmarked to fund capital projects as part of the on- going regeneration of the City.
Employer Pension Contributions
39. Following the Triennial valuation of the East Riding Pension Fund as at 31 March 2019, the Actuary advised the value of employer’s contributions relating to the funding of historic service benefits would reduce by 1% (c£1.25m per annum) for 2020/21 to 2022/23.
40. In line with the Cabinet decision of January 2020 to approve the pre-payment of employer contributions for the period April 2020 to March 2023, the projected employer costs have been reduced to reflect the savings associated with the pre- payment.
Capital Financing
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41. The MTFP projections have also been updated to reflect latest information regarding the Capital Programme with Capital Financing Costs revised in line with latest expenditure projections. The projections in this report are consistent with the detail contained within the Capital Strategy elsewhere on this agenda.
Contingencies
42. Service budgets may be subject to further adjustments including the allocation of contingencies / provisions to meet cost pressures. These are technical adjustments which will not impact on approved service levels. Contingencies are shown within the MTFP at Appendix E and shown below at Table 3.
Table 3 – Contingencies to meet cost pressures
20 20 /21 20 21 /22 202 2/23 £000 £000 £000 - Energy Inflation (5% p.a.) 452 777 1,102 - Contractual Inflation – non Pay 1,624 3,124 4,624 - Pay Award (3% p.a.) 3,270 7,020 10,770 - Social care demographic fund 0 3,000 6,000 Total – Contingency Budgets 5,346 13,921 22,496
43. In addition to the assumptions set out above the following factors have also been taken into consideration .
Transformational Costs (Utilising Capital Receipts Flexibility)
44. The Secretary of State for Communities and Local Government issued guidance in March 2016, giving local authorities greater freedoms with how capital receipts can be used to finance expenditure. This Direction allows for the expenditure incurred in delivering revenue savings or service transformation, between 2016/17 and 2021/22, to be treated as capital and not be charged to revenue, subject to generating funding from asset disposals in the same period and Council approval of the planned use of the flexibility.
45. Between 2016/17 and 2019/20 it is anticipated that the Council will have funded £13.5m through this flexibility. The 2020/21 Budget includes £3m within the Capital Programme to meet the potential costs over the next 2 years of funding transformational activity within Children’s Services. The Council’s Strategy is included at Appendix F.
Schools Funding / DSG
46. The Council’s financial position is impacted by the way in which schools are funded and the ongoing transfers to academy status. Schools with Academy status, of which the number in Hull is 92 receive all their funding direct from the Government rather than through the Council.
10 Page 108 of 324 47. The Dedicated Schools Grant (DSG) receivable by the Council in 2020/21 of £55.1m compares to the 2019/20 value of £54m. This reflects our increase in funding from the DfE for High Needs of £4.7m but also the ongoing movement to academy status.
48. The DSG funding and costs must balance over time and, as highlighted in the successive monitoring reports to Members since 2017/18 some amendments to the pattern of expenditure will be required over the period of the MTFP. It is anticipated the DSG will end 2019/20 with a cumulative deficit of £3.2m, which is 1.4% of overall DSG. In 2020/21, it is anticipated there will be an in-year surplus of £1.6m which will be allocated to address the cumulative deficit with a view to achieving balance over 3 years.
49. The Council is continuing to work with the city’s schools on the measures required to meet the needs of children within the available funding envelope. Changes impacting on service delivery will be the subject of future reports to Cabinet.
50. The budget figures for 2020/21 for the Schools Block, the Central Schools Services Block, the High Needs Block and the Early Years Block are shown in Appendices K (i) to (iii).
Public Health Grant
51. The September Spending Round indicated the Public Health Grant would receive a real terms increase in 2020/21, this has been estimated at £0.5m (remains subject to confirmation) and will be used to commission early intervention services. There are no increases assumed in later years within the MTFP.
The 3 Year Medium Term Financial Plan 2019/20 – 2021/22
52. The Medium Term Financial Plan shown in summary at Table 4 and in detail at Appendix E has been developed based on the assumptions discussed above and summarised below.
i) MTFP reflects the funding allocations in 2020/21 in line with the 2020/21 Provisional Settlement. There is no indicative data relating to 2021/22 and 2022/23, so estimated inflationary increases in funding have been assumed in the absence of detailed intelligence. There is a risk that funding may be lower than currently modelled and the forecasts may need to be revisited as the government works toward a spending review in 2020. ii) Provision of resources to allow pay increases of 3% in 2020/21 and future years and an increase in non-pay budgets to reflect future contractual price increases. iii) Delivery of the budget savings set out in Appendix B(ii) iv) Council Tax increases to the referendum limit so currently 3.99% in 2020/21 and 1.99% in 2021/22 and 2022/23.
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Table 4 – Summary MTFP
2020/21 2021/22 2022/23 £m £m £m Expenditure Directorates (including Public Health) 232.0 232.0 232.0 Schools 55.1 53.1 53.0 Corporate Budgets (including provisions 24.8 42.1 51.5 for pay, prices, pensions) Net Budget requirement 311.9 327.2 336.5 Funding Government Grant / Retained Business -219.2 -230.8 -236.1 Rates Contribution (to) / Use of Revenue -3.5 0 0.3 reserves Contribution (to) / Use of Capital Reserves Council Tax (Increases of 3.99%/ -89.2 -91.7 -94.3 1.99% / 1.99% increase) Total Funding -311.9 -322.5 -330.1 Shortfall 0 4.7 6.4
Joint Commissioning with Clinical Commissioning Group (CCG)
53. As detailed in the table above, the latest projections indicate that the Council is faced with a budget shortfall in 2021/22 of £4.7m. Based on current projections the deficit is set to increase in 2022/23 to £6.7m. This primarily reflects the Council’s rising costs relating to the care of vulnerable children and the demand pressures within the wider adult and children’s care system and the health sector across the city.
54. The Council cannot seek to address these issues and cost pressures in isolation, and so must continue to work with our partners, and specifically the Clinical Commissioning Group (CCG), to manage demand across the system utilising the resources available within the City. The move towards joint commissioning between the Council and CCG is developing at both an Officer (Integrated Commissioning Officer Board) and Member (Committees in Common) level and this provides confidence that efficiencies and improved value for money can be achieved. The total joint funding “envelope” has been agreed with the CCG along with a schedule of commissioning and service reviews to be jointly considered over the coming years, are shown within Appendix I (i) and (ii). The outcome of the review work will be subject to approval by the Committees in Common.
12 Page 110 of 324 55. The move towards closer working with the CCG builds on the national drive to reduce public sector expenditure and improve the quality of care the Government is seeking to encourage closer working between Councils and the NHS. In broad terms there is a nationally recognised desire to reduce the cost of acute health care through better focussed and resourced community services designed to meet the care needs of individuals at an early stage and therefore reduce the call on expensive acute services.
56. To this end the Government introduced the Better Care Funding initiative in 2015/16 which sees significant resources from the NHS, and local Councils, jointly managed under the auspices of Health and Well Being Boards with a formal pooled budget arrangement. The MTFP for 2020/21 reflects the expected level of funding received from the NHS to support services.
Reserves
57. General Balances at April 2019 were £12.97m and the 2019/20 budget, as approved in February 2019, assumed an increase of £6.3m during the year.
58. A detailed risk assessment for the level of reserves is attached at Appendix G. In the light of the cost pressures recorded in 2019/20, the very real challenges faced by the Council in maintaining services whilst potentially suffering further cuts in funding and the continued uncertainty over government funding and the impact of BREXIT, the Risk Assessment continues to reflects the need to bolster General (Un-earmarked) Reserves to c£21m by 2020/21, as reflected within the budget proposal.
59. A schedule of Reserves movements is included at Appendix H.
Resilience Index
60. As part of the Government’s and the Local Government sector’s shared desire to better manage the financial risks faced by Councils, CIFPA have recently issue their Financial Resilience Index. The Index measures each Council against 9 indicators, relating to reserves, debt servicing, social care and income generation, and provides comparison against other authorities. Whilst the Index should be seen in the context that all Councils are individual in terms of history, circumstance and strategy, the measures provide a useful comparable tool. The critical factors are considered in the paragraphs below with a summary of Hull’s analysis included at Appendix L.
- Reserves
61. Critically, whilst the analysis provides a good degree of comfort in terms of financial sustainability which reflects the fact that the Council has not used General Reserves to support the Revenue Budget, the Index highlights that despite bolstering over the last 3 years, they remain at comparably very low levels. This highlights the importance of protecting the General Reserves position in the light of the Council’s forecast budget deficit in 2021/22 ahead of the long awaited Spending and Fair Funding Reviews.
- Servicing of Debt
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62. Whilst the Council’s recorded debt levels appear relatively high it is important to note that this is in line with expectations given that the Council retains a large housing stock, and the associated housing debt, and has benefited from significant PFI investment which taken together at £400m account for c50% of the Council’s recorded debt. Taking these adjustments into account HCC would move into the middle range which is consistent with the measure of interest costs as a proportion of total spend which places Hull around the average of comparable authorities.
- Social Care
63. This indicator is designed to highlight the future “flexibility” a Council may have in terms of reducing costs in services other than the statutory care services. The indicator places Hull in the middle range where social care costs account for c70% of expenditure with c30% on other services.
- Income Generation
64. The Index also highlights the very low tax base and relatively low levels of income generated from service users, which is consistent with being measured as a relatively deprived area, which in turn limits the scope for raising income locally through Council Tax or service charges. Similarly the Growth above Baseline measure highlights the relatively low level of growth in Business Rates but, given the planned “reset” of Business Rates whereby there will be a redistribution of such growth between authorities this translates into a low risk position for the Council.
Statutory Officer Comments
65. Under Section 25 of the Local Government Act 2003, and CIPFA Code of Practice, the Authority’s Chief Financial Officer (s151 Officer) is required to report on the robustness of the estimates made for the purposes of the budget calculations and the adequacy of the proposed reserves.
Members are required under the 2003 Act to have regard to the Chief Financial Officer’s report when making decisions about the budget calculations.
66. The Director of Finance and Transformation (section 151 Officer) has made the following statement:
The robustness of the budget estimates and the adequacy of the reserves are largely dependent on the levels of risk and uncertainty. The principal financial assumptions made in the budgets are noted in this report and attached appendices. Budget monitoring throughout the year will be an important tool in identifying at an early stage potential problems so appropriate action can be taken.
The delivery of the planned savings and major business projects is critical to the successful delivery of the Council budget strategy. Current activity provides adequate assurance as to the deliverability the 2019/20 budget with future year
14 Page 112 of 324 forecasts representing realistic planning assumptions which will be subject to review as part of the annual budget setting process.
The budget has been prepared reflecting known service pressures and following through reviews by City Managers of planned savings.
A risk based approach to consideration of the level of reserves is a component of the Council’s overall risk management framework. Operational risks should be managed within Services’ bottom line budgets and thus will not normally result in a call on the Council’s reserves.
Appendix G summarises the significant financial risks applicable to Un-earmarked Reserves. The total potential risk to the Council is estimated to be £18m in 2020/21. The Authority’s Un-earmarked Reserve was £8m at 31 March 2018 and is presently envisaged to be increased to £19m at 31 March 2020, and in the proposed budget it is planned to rise to £21m at 31 March 2021.
As noted above at paragraphs 60, comparison with all unitary councils, continues to show that Hull has a relatively low level of reserves when set against the scale of its operations, and also that it is relatively highly dependent on receiving government RSG and grant funding. These issues have been highlighted consistently and have informed reporting and lobbying for a considerable period of time. The latter aspect in particular has informed matters such as the Council’s response to the Fair Funding consultation, when, along with many counterparts from elsewhere facing similar position, the case was made very clearly that deprivation and the difficulty of raising income locally should be prime factors driving a new, more equitable, system for the distribution of government funding.
My assessment of the process that has been undertaken set alongside the risk assessment, informed by the CIPFA Resilience Index, is that the budget calculations used in the preparation of the budget estimates are fair and robust and reserves are adequate to reflect known circumstances.
67. The Town Clerk (Monitoring Officer) has made the following statement:
The case of R (Buck) v Doncaster MBC [2012] the High Court confirmed that the role of Full Council in relation to the budget process is limited to the allocation of resources to meet the authority’s potential expenditure for the next financial year, which enables it to set an appropriate level of council tax.
The Town Clerk considers that the Leader’s proposals fulfil the statutory requirements set out below with regard to setting the amount of Council Tax for the forthcoming year and to set a balanced budget:-
S30 (6) Local Government Finance Act 1992 (the 1992 Act) This section requires that Council Tax must be set before 11 March, in the financial year preceding that for which it is set. Failure to set a budget by this date does not of itself render the Council Tax invalid.
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S31A the 1992 Act This section sets out the calculations to be made in determining the council tax requirement, including contingencies and financial reserves. Failure to undertake the required calculations renders any Council Tax void and unenforceable.
S31B the 1992 Act This section sets out the detail of the calculations required to meet the Council’s obligations as at S31A.
S25 (1) Local Governance Act 2003 (the 2003 Act) The Chief Finance Officer of the Authority (i.e. being the appointed S.151 Officer) must report to it on the following matters:-
a) the robustness of the estimates made for the purposes of the calculations; and b) the adequacy of the proposed financial reserves.
S25 (2) the 2003 Act When the Council is considering calculations under S31A, it must have regard to a report of the Chief Finance Officer (being the appointed Section 151 Officer) concerning the robustness of the estimates made for the purposes of the calculations and the adequacy of the proposed financial reserves.
The Local Authorities (Functions & Responsibilities) (England) Regulations 2000 (as amended) These Regulations set out what are to be the respective functions of Council and of the Executive. With regard to the setting of the budget and Council Tax for the forthcoming year, Regulations provide that the Leader formulates the plan or strategy (in relation to the control of the Council’s borrowing or capital expenditure) and the preparation of estimates of the amounts to be aggregated in making the calculations under S31A of the 1992 Act. The approval of such plan or strategy/calculations is the responsibility of full Council.
68. Comments of City Manager for Human Resources
The budget does not include identified funding for redundancies or to pay pension strain costs. The assumption is that staff can be redeployed when restructuring is required, however this is not always possible as posts have to be available at the right time and have to be suitable and a reasonable alternative. A full equality impact assessment will need to be completed when service changes impact on service delivery.
69. Comments of Overview and Scrutiny
This report, alongside the suite of other budget reports, is due to be considered by the Finance and Value for Money Overview and Scrutiny Commission at its meeting
16 Page 114 of 324 of 24 January 2020. Any comments or recommendations agreed at the meeting will be tabled at January Cabinet for consideration alongside the report. (Ref. Sc5693)
Collection Fund and Council Tax Implications
70. The Local Government Finance Act 1992 (as amended by the 2003 Act and the Localism Act 2011) sets out the powers and duties of the Council in setting the annual Council Tax. The key requirements are that:-
i) Council Tax is set at Full Council.
ii) Council Tax is set at a sufficient level to meet its proposed budget requirements for the ensuing year (see Sections 31A and 31B of the Act).
iii) The level of Council Tax is set before 11 March to enable circulation of Council Tax bills to enable people to pay on and after 1 April (see Section 30(6) of the Act).
iv) The Chief Finance Officer must report on the robustness of estimates and the proposed adequacy of reserves (see Section 25 of the Act and paragraph 56 above).
71. The Council is required to set a Council Tax sufficient to balance the Collection Fund account it maintains. Based on the projections at November 2019 and looking back at the income received in 2019/20, it is forecast that there will be a surplus on this account at year end. The balance is required to be distributed to the contributing or precepting authorities (the Council, Police and Fire & Rescue). Hull City Council’s net surplus is forecast to be £1.5 m and will be used in funding the 2020/21 budget as per Appendix E.
72. Under section 52ZB of the Act, each billing authority must determine whether its relevant basic amount of council tax for a financial year is excessive. If an authority’s relevant basic amount of council tax is excessive, a referendum must be held in relation to that amount. Using the Governments’ principles determined by the Secretary of State under section 52ZC of the Act, the Councils’ relevant basic council tax for 2020/21 is not excessive and therefore no referendum is required.
73. The Council approved a Council Tax Base of 62,554 (Band D equivalents) for 2020/21 at its meeting on the 16 January 2020. Given the Council Tax requirement of £89,200,127, the Band D Council Tax proposed for 2020/21 is £1,425.97. This represents an increase of 3.99% over the 2019/20 charge. This is below the limit of 4% (including 2% for Social Care), above which the Government require a local referendum to take place to confirm such an increase.
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Table 6 Proposed Council Tax Charge per Band
Band Charge 2019/20 Proposed Increase Increase per Charge 2020/21 week £ £ £ £ A 914.17 950.65 36.48 0.70 B 1,066.54 1,109.09 42.55 0.82 C 1,218.90 1,267.53 48.63 0.94 D 1,371.26 1,425.97 54.71 1.05 E 1,675.98 1,742.85 66.87 1.29 F 1,980.71 2,059.73 79.02 1.52 G 2,285.43 2,376.62 91.19 1.75 H 2,742.52 2,851.94 109.42 2.10
NB These figures exclude the charges for the Police and Fire Services. Total charge is shown at Appendix J.
74. The precept for the Humberside Police and Crime Commissioner for 2020/21 is £14,276,074. When this amount is divided by the approved Council Tax base of 62,554, it gives a Council Tax charge for a Band D property in the Kingston upon Hull area of £228.22. This is an increase of £4.91 (2.2%) on the 2019/20 charge and is below the £10 level at which a referendum would be required.
75. The precept for the Humberside Fire Authority for 2020/21 is £5,419,053. When this amount is divided by the approved Council Tax base of 62,554, it gives a Council Tax charge for a Band D property in the Kingston upon Hull area of £86.63. This is an increase of 1.99% on the 2019/20 charge.
Equality Impact Assessment Analysis
76. Section 149 of the Equality Act imposes a Public Sector Equality Duty on 'public authorities' when exercising public functions to have due regard to the need to: (a) eliminate discrimination, harassment, victimisation and any other conduct that is prohibited by or under the Act (b) advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it (c) foster good relations between persons who share a relevant protected characteristic and persons who do not share it. 77. Relevant protected characteristics are – age, disability, gender reassignment, pregnancy and maternity, race, religion and belief, sex and sexual orientation and, to a more limited extent, to the protected characteristic of marriage and civil partnership .
18 Page 116 of 324 78. To ‘have due regard’ means that in making decisions and in its other day-to-day activities the Council must consciously consider the need to do the things set out in the general equality duty: eliminate discrimination, advance equality of opportunity and foster good relations. 79. The Council will only be able to comply with the general equality duty in relation to a decision, if the ultimate decision maker: • understands the Council's obligations under the general equality duty • has sufficient information • demonstrably takes this information fully into account throughout the decision - making process. 80. The courts have stressed the importance of having due regard before and at the time that a particular policy is being considered, and of exercising the duty with an open mind. 81. The proposals contained within this report relating to 2020/21 do not provide for reductions in service delivery beyond those previously approved by Council. However, in response to ongoing changes in services design and delivery, services will continue to consider ‘due regard’ for equality and demonstrate this via Equality Impact Analysis assessments. 82. It should also be recognised, that there will be positive impacts too from investment in capital projects supporting such as Housing Regeneration, Visitor Destination, Highways, A63 Bridge and infrastructure improvements which will particularly benefit older and disabled people. ICT improvements will likely mean better access for staff and customers particularly disabled, younger people and women. 83. The EIAs will be developed in consultation with stakeholders such as Elected Members, Trade Unions, protected groups, customers and users of services/policies.
Councillor Stephen Brady, Leader of the Council
Contact Officer – David Bell Tel. 01482 613084
Officer Interests: None
Background Documents:
(i) MTFP Cabinet Reports November 2019 / July 2019
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Implications Matrix
I have informed and sought advice from HR, Yes Legal, Finance, Overview and Scrutiny and the Climate Change Advisor and any other key stakeholders i.e. Portfolio Holder, relevant Ward Members etc prior to submitting this report for official comments I have considered whether this report requests a Yes decision that is outside the Budget and Policy Framework approved by Council Value for money considerations have been Yes accounted for within the report
The report is approved by the relevant City n/a Manager I have included any procurement/commercial Yes issues/implications within the report
I have considered the potential media interest in Yes this report and liaised with the Media Team to ensure that they are briefed to respond to media interest. I have included any equalities and diversity Yes implications within the report and where necessary I have completed an Equalities Impact Assessment and the outcomes are included within the report Any Health and Safety implications are included Yes within the report Any human rights implications are included n/a within the report I have included any community safety Yes implications and paid regard to Section 17 of the Crime and Disorder Act within the report I have liaised with the Climate Change Advisor Yes and any environmental and climate change issues/sustainability implications are included within the report I have included information about how this report Yes contributes to the City Plan/ Area priorities within the report
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21 Page 119 of 324
Page 120 of 324 Appendix A (i)
Summary of Consultation
Introduction
The Council regularly seeks the views of residents and partners on the priorities for investment, service provision and improvement through a variety of means to enable participation in the development of the budget. This includes using the Peoples Panel, which has now run for nearly ten years, the Budget Challenge, and individual service consultations.
The timelines for this year’s Council’s Budget report were first published in the Forward Plan on the 25 October 2019. Cabinet and the Finance and Value for Money Overview and Overview Scrutiny Commission have considered proposals put forward at a number of meetings during the Autumn, with full summary of the proposals being confirming General Fund budget proposals on the 25 November 2019. Formal comments on the proposals were invited to be submitted to David Bell, Director of Finance and Transformation by 17 February 2020. .
In addition, the following consultation meetings have also taken place with representatives of the City’s business community, voluntary sector and young people. In summary the engagements a shared understanding of the difficult financial environment in which the Council is operating and outlined the willingness to work together for the overall benefit and prosperity of the City. The key points raised at each meeting are detailed below.
Finally, in addition to inviting comment on the specific budget proposals relating to 2020/21, the Council continues to engage with residents through the People’s Panel on the provision of Council services and their relative priorities. This provides insight into the importance that residents place on different services and an understanding of the priorities of our customers.
During the most recent People’s Panel survey, residents identified their overall city priorities as:
1. Improving infrastructure, roads and transport 2. Encouraging new businesses to invest and support established businesses to be successful 3. Increasing the availability of secure, well-paid jobs 4. Reducing crime and improving community safety 5. Increasing affordable, quality housing and reducing homelessness
Youth Representatives - Meeting held 13 th January 2020 at the Guildhal l
The Portfolio Holder for Finance and Transformation and the Leader, with the support of Children Young People and Families and the Director of Finance & Transformation are due to meet with young people and their representatives to consider the issues affecting young people relevant to the future of the City
• benefits of enhanced leisure facilities, with good access in the City centre such as the Hull Venue and the potential replacement of the Ice Arena
Page 121 of 324 Appendix A (i)
• the wide benefits of providing cheaper bus passes for young people up to the age of 18 • the continuing popularity of Hull Fair • concern over access to mental health services among young people and stigma associated with mental health issues arising from a lack of understanding education • need for support to be provided to young carers who can be “hidden” and not in receipt of the help they require • the untapped potential of young people in adding to the City of Culture volunteers • need for the Council to develop a more sophisticated approach to the use of social media in order to better engage with young people, provide information and promote events e.g. utilising high profile “names” to access followers
Voluntary and Community Sector – Meeting held 9 January 2020 at the Guildhall
Over 60 voluntary and community sector organisations were invited to the budget briefing session at the Guildhall on Thursday 9th January 2020. 35 representatives attended where the Portfolio Holder for Finance, accompanied by the Director of Finance, Assistant Director (Community Safety and Early Intervention) and Procurement Manager (Adult Services Commissioning), presented the budget proposals for 2020/21.
The Director of Finance outlined that no financial details have been made available by the new Government apart from a one year settlement for 2020/21 which was received by the Council on 20 th December 2019. Ideally, a 4-5 year settlement would have been more welcome however the government has indicated its commitment to a spending and fair funding review for 2020 and this should give a clearer direction.
As a result of the above the Council has no significant proposals and 2020/21 will be a holding year. Subsequently, increases in social care costs due to an ageing population has meant HCC are in deficit which will have to be handled with one-off monies and a transformation programme of efficiencies. In addition, the Social Care White paper is yet to appear and the government’s focus at present is on the spending and fair funding review.
The Portfolio Holder for Finance and Transformation explained that a fairer funding mechanism is needed as the authority’s Council Tax precept for social care is lower than other authorities due to our low value housing. The two council service areas under pressure financially are Adult Social Care and Children & Young People’s services.
The Procurement Manager outlined the complexity of increasing demand for services and the requirement to invest more in prevention and early intervention operating models and that residential care is not always the right offer and there is a need to recognise the value of investment in community organisations.
The Council are looking to commission longer term contracts (8-10 years) to provide sustainability and security for staff as well as the ability for organisations to plan and
Page 122 of 324 Appendix A (i) invest. Some current services will be changing to community enablement and there will be opportunities for building on the benefits of existing organisations working in communities to provide better outcomes for people and cost benefits for the Council.
In addition, there will be more engagement with the VCS organisations and more joined up working with the Council and Hull’s Clinical Commissioning Group to fund community based services as well as the Council looking to streamline the procurement process for lower value contracts, whilst maintaining transparency and fairness and meeting legislative requirements. Issues raised by the VCS representatives included the need for more communication and engagement by the Council with the sector, providing staff to support community development at grass root levels and a mechanism to allow two-way feedback on outcomes for the people of Hull. The Procurement Manager agreed for his contact details to be circulated and commissioning engagement events to be held on a quarterly basis.
Business Sector – Meeting held on 29 January 2020 at the Guildhall
The Leader, Portfolio Holder for Finance and Transformation, and the Director of Finance and Transformation met with representatives of the Hull business community to consider the issues relevant to the future of the City faced by the Council and the nature of its response.
The key issues being the:
• positive impact of inward investment into the City and the on-going programme of physical investments in the Hull Venue, Public Realm, Indoor Market, Bond Street site and the bridge over the A63 • potential impact of climate change and the carbon neutral agenda • the need to link health, housing and education into regeneration • importance of complementary private sector investment, including development of supply chains, in maximising the benefits in Hull • challenges faced by the Council regarding the continued cuts in Government funding and the disproportionate impact on Hull given the relatively low property values and Council Tax base • benefits of closer working locally with the NHS to address the care needs of Hull’s residents and the need for a national solution to the long term funding crisis • continued support in the City for a devolution deal and the development of the Cruise Terminal • work of the LEP in drawing in additional funding to the region and the role of all parties including the Council and MP’s in promoting the economic case for further investment in improving rail transport links
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Page 124 of 324 Appendix A(ii)
FOREWORD TO THE LABOUR ADMINISTRATION REVENUE AND CAPITAL BUDGETS FOR THE BUDGET YEAR 2020
CONTINUING TO DELIVER DESPITE UNCERTAINTY
REVENUE
Local Authorities up and down the country; including Hull City Council, have been awaiting details of Government funding and of the formula for future funding throughout 2019. Unfortunately for local councils and local residents the Government appears to have been solely focused on internal Conservative Party rivalries, manoeuvring around votes in parliament and the General Election. Funding for local services has been an afterthought with the effect that at the last minute; 20 th December (4pm - 1hr before everyone broke for Christmas); we were informed that the funding for 2020/21 would be an extension of that of 2019/20. The political turmoil evident in central government has seen the implementation of the Fair Funding Review and the move to 75% Business Rate Retention delayed for one year. This uncertainty is a challenge in terms of future planning although the Government has indicated that that it will retain the system of ‘top ups and tariffs’ relating to Business Rates which are vital to authorities like Hull.
Having said he had a ‘plan’ to deal with Adult Social Care; (ASC); the Prime Minister, Boris Johnson, did not include any such plan; oven ready or otherwise; of additional funding for councils. Having stated that the Government would be putting Billions into ASC it is now revealed that what he actually meant was that Council Tax payers will be doing this instead by forcing councils that need extra funding for the elderly, sick and disabled to add another 2% ASC Precept to bills or fail to provide for the most vulnerable in our communities. Although the Government has given HCC an extra one off sum of £7m for next year this isn’t the plan or the resolution to his issue that we were promised.
It needs to be emphasised that Hull has one of the lowest returns for each 1% increase in Council Tax in the country whereas places like Westminster have the highest return. The ‘fair funding’ councils like Hull City Council we were promised four years ago has not materialised! While this provides no real certainty projecting forward, it at least means there will be no additional cuts to funding, or increases, for the coming year.
As with children’s services there has been a well reported national increase in need in ASC which means that we have had to provide for the sudden spike in placement need towards the end of the last financial year; 2018/19; which impacted in 2019/20. This spike requires addition investment of £3M in the coming financial year and a further £3M in the following year.
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In terms of the revenue budget for 2020/21 this means we can continue as we have protecting local services and delivering on our established commitments.
We continue to deliver certain revenue funding for key policies that the Labour administration and residents value. We will retain the funding for the anytime bus pass for pensioners, the chronically sick and the disabled, ensuring that these people can travel when they want and need to. The Labour administration understands that many families and young people are struggling and that times have been hard and will continue to get harder. As mentioned in previous years, young people in further education and training benefited from receiving the Education Maintenance Allowance, (EMA), which assisted in getting young people to college but the Coalition Government from 2010 to 2015 stripped this small allowance away and the Conservative Governments since 2015 have ignored their plight. In response to this the Labour administration listened to members of our Youth Parliament who flagged up the unaffordability of transport costs as a major reason young people were struggling to get by. In January 2019 this council launched a ‘KAT Card’ bus pass which enables any young person aged under 19 years to purchase a weekly rider ticket for £10; a reduction of 33%. The subsidy for this continues to be met jointly by Hull City Council, Stagecoach and East Yorkshire Motor Services with council funding coming from the fines raised from bus lane enforcement. This scheme, flagged up by Young People in Hull and acted upon by the administration, is one of the first such schemes in the country where bus operators and the local council have chipped in together to deliver a reduced cost scheme for young people. Since introduction this has really proved popular and to ensure it continues to meet the needs of local young people labour will commit a further £200,000 in 2020/21 and the same increase in 2021/22.
The Labour administration will continue to deliver the free bulky item collection service for household waste which re reintroduced in 2011; after it had been cut by the Liberal Democrats; and the extra fly-tipping blitz team which we introduced in 2018. We believe that these excellent policies are contributory factors to Hull continuing to have the highest recycling rates of any City in the UK. Despite these initiatives, fly tipping continues to be a problem and blights some areas of the city where local residents are rightly annoyed. In the six months from April to September 2019 Council Officers carried out 3,705 actions in relation to fly tipping across our city and were able to identify 23 people to issue fixed penalty notices to and additionally prosecute 33 others.
In response to the continued problem of fly tipping in our city this administration is committing an additional £100,000 to create additional capacity in this area and to also respond to removing chewing gum in city centre streets in a more proactive way. There will also be a tougher response to enforcement when individuals continue to drop litter on streets across our city. This is intended to change behaviour and improve the environment in which we all live, work and socialise.
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Often it is the case that as soon as an incident of fly tipping is cleared the offender quickly dumps more rubbish in the same spot. We will continue to try to identify those responsible for these environmental crimes, to issue fixed penalty notices and to prosecute wherever possible, because there is no excuse for this type of behaviour especially when accessible alternatives are provided.
The Labour administration is introducing a new ground breaking pilot initiative aimed at making our nigh time economy safer, especially for more vulnerable people or those travelling alone. We are investing £60,000 to create Street/Taxi Marshals at the city centre taxi ranks on busy weekend nights. This initiative stems from an Overview & scrutiny Commission task and Finish Panel into Taxis which was chaired by Councillor Aneesa Akbar. We know, following the work of the panel, that this initiative will be welcomed by residents, visitors, businesses and taxi drivers alike.
Hull City Council has suffered from reductions in Revenue Support Grant (RSG) and Core Funding of £130M since 2010, which represents a cut in funding of 55%. This process of hollowing out the council’s funding began with the Comprehensive Spending Review initiated by the Coalition Government in 2010 which continued after the 2015 and 2017 elections. The cutting of core funding to local councils was part of the imposed ideology of Austerity, welcomed by the Liberal Democrats in Hull and imposed by them in Government. While heavy reductions were imposed across most of local government, authorities like Hull with higher levels of need and also relatively low property values and economic growth have continued to suffer disproportionately as a result of the cuts that have been made. While any funding formula disregards deprivation and need this will continue to be the case and will worsen over time. Budget statements since 2011 have highlighted this concern and we must continue to do so as well as raise the need for a robust and responsive fair funding formula.
One of the most distressing effects of the imposition of ‘Austerity’ by the Coalition Government which has continued under the Conservatives, is the additional strain on our communities, already hard pushed families and the hollowing out of funding to support services for vulnerable young people and children. In Children’s Social Care the national spike in the numbers of children looked after is also reflected in Hull where the Looked After Children, (LAC), number has risen from 796 in March 2019 to 848 in January 2020.
In response to this trend, the Labour administration has rebased the children’s services budget twice putting in an additional £13 million since 2016 over and above the budget allocated. This is money taken from other areas of service to counter the failure of government to fund our city appropriately in order to safeguard local children.
This rising need over a protracted period of time means that we have to provision £1.7M to meet placement commitments from 2018/19 as well as an additional £1.5M
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Page 127 of 324 Appendix A(ii) for placements in 2019/20. We have a strong commitment to respond to the changing nature of care provision so that we are able to meet the challenges of communities and families under continued pressure and the consequences of this in the real world, which is why we put additional money in last year to provision additional residential placements in our city for our children, including small homes able to meet highly complex needs and why we are committing a further £1.2M in the coming financial year to allow significant transformation of service delivery.
During times of intense pressure and change it is important that Council staff are equipped to continue to deliver. A review of the essential training and development requirements of our staff identifies a shortfall in funding and as a result we will be making an additional £250,000 available in the Training Budget.
Last year this Council, along with our partners in the Private Sector and Renewable Industries funded a celebration of the future renewable opportunities that our close working has made possible in Hull. Hull City Centre held an electric car race which showcased the emerging technology that will be the future of all transport in the world and will contribute to our cities zero carbon target. Many companies and organisations engaged with young people, who are the future, to build and race around a city centre circuit. We think it is important that people experience the possibilities ahead and witness progress first hand so we will be committing our part towards this event being run again in 2020 with a £100,000 contribution towards its success.
In a similar vein we are committing a further £200,000 in the coming financial year and again in the year after to bolster our carbon neutral initiative.
As ever, the Labour administration have managed the City’s accounts prudently and have maintained a balanced position, unlike the chaos that ensued during the short but destructive Lib Dem administration”
Without knowing the funding proposals or arrangements that the new government will implement impacting on 2021/22 we are only able to project forward current spending commitments for the budget year 2021/22. When we know the intentions of the new government we will hopefully be able to re-profile and revise these figures; which was what we hoped would be the case throughout 2019/20, as explained previously.
While we have managed to reach a balanced position, the picture for the year 2021/22 is uncertain and unclarified by government. So called ‘Fair Funding’ was due to be implemented from 2020 but this has not happened and how that will look for cities like Hull remains unclear.
Our careful financial planning has resulted in a balanced financial position, with overspends mitigated against. This administration’s approach in Hull contrasts the position of some other local authorities; including Conservative ones. A recent
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Page 128 of 324 Appendix A(ii) investigation by the Times reported that councils spent a total of £244m on leisure and sports facilities in 2019, less than half the £565m spent in 2009, a cut of two- thirds if inflation is taken into account. Hundreds of leisure centres, pools and other facilities have closed and spending on sports development and community recreation cut from £267m to £93m over the same period. In Hull we have completely bucked this trend and shown the way that not only other councils should invest to regenerate but what government should do to reverse decline across communities in the nation.
It is worth underlining that the Labour administration has achieved financial balance while also delivering services, vast improvements to our city and a massively improved leisure offer, realising its potential as a place to live, work and visit. It is also worth pointing out that the last Liberal Democrat Budget for our city had 55% greater funding than that we have now as well as over £100m in reserves from the second KC shares windfall and they still needed to use £10m of reserves to balance the books while delivering no improvements or transformation of services.
The revenue element of Community initiative budgets will also be maintained, this money along with the Capital element can be used for Crime fighting initiatives, as the Labour controlled wards have proven by spending on average twice as much as Lib Dem controlled wards, proving once again who is serious about crime reductions and who just want sound bites for leaflets.
In terms of fairer funding, the Council and the Labour Group will continue to lobby tirelessly is responding to government consultations, via the LGA and SIGOMA to persuade the government to ensure equity in the distribution of resources and funding to properly reflect local needs and to highlight the impact, long-term, of a decade of imposed austerity on our services and communities.
CAPITAL
Given the pressure on the revenue budgets, the Labour administration continues to use its capital budget to continue the regeneration of the City. We said we would not be passive observers in the imposition of austerity in our city. Our bold regeneration plans, and good partnerships with retailers have seen the footfall figures in Hull City Centre buck the national trend, growing instead of dwindling away. Hull Council has also been shortlisted for the Council of the year. Our opponents have opposed all our major regeneration projects.
Throughout all off this the majority opposition have accused the Labour administration of “Maxing out the Hull Credit Card” and it would have been useful to have used the funds raised by the second KC shares sale which raised £104M but sadly the previous Liberal Democrat Cabinet tore through that sum in just four years from 2007, maxing out the KC windfall.
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Beyond the hype the reality is that our decisions have not only turned the ship around but when compared to all other local authorities, the vast majority of whom have not borrowed to invest as we have, we sit almost exactly in the middle in terms of CIPFA financial stress charts, nowhere near the Unitary Authorities most threatened by this. We were and are right to use public money to pump prime growth through regeneration investment and we are seeing these plans coming to fruition.
Continuing to Deliver Improvement in Culture, Leisure and Tourism.
While many local authorities across the nation have been closing culture and leisure facilities and reducing provision we have developed and maintained a strong culture and leisure offer for Hull residents and visitors from outside Hull. We have bucked the trend in doing this having halted the plans of the Liberal Democrats in 2010/11 which would have seen closures and reduced opening times, with facilities staffed by volunteers. This has been against a backdrop of continued financial strain.
Last year we committed to investing £3.75M to deliver projects such as the Lido and kick-start the revamp of the albert avenue site, we also committed to improving Beverley Road Baths and the behind the scenes equipment at Ennerdale, ensuring it continuance.
This year we build upon these commitments and drive forward on delivery of them.
As well as reintroducing the lido at Albert Avenue Baths we are revamping this very popular venue so that it can continue to serve the city and local people. We are investing £1,400,000 in improvements in 2020/21 and a further £1,800,000 in 2021/22, an overall increase in pledged investment of £2M from previously announced funding.
Beverley Road Baths will receive an additional input of £1.5M over 2020/21 and 2021/22 which will see £2.2M in 2020/21 and £400,000 in 2021/22.
We have previously reported the need for a new replacement for our Ice Arena but in the interim we will provide £100,000 in 2010/21 to ensure that the refrigeration system can continue to operate.
Our extensive and popular local library network will receive £400,000 each year for the next three financial years, a total investment of £1.2m which is £400,000 more than previously allotted by us.
Much has been said about how our parks and open spaces need some more attention as they are so well used by local communities so we will be allocation £200,000 to them each year for the next three financial years, an overall increase in that time of £200,000. In addition to this we are investing £500,000 on specific improvements in both East Park and on the Aviary in Pickering Park.
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In terms of these areas alone this amounts to increased allocation of funding of £4.1M.
We have continued to deliver and improve services to all communities, which demonstrates our commitment to the city and is one of the reasons that the city council, under this Labour administration, was recognised as the second most improved council in the whole country.
Continuing to Deliver Improvement in Economic Investment, & Regeneration
Residents in Hull are no strangers to the vagaries of the environment, being a ‘city on the sea’. Over recent months we have all been reminded of the consequences of ignoring climate change in the vain hope that it will go away or that it does not exist. The reality for the planet and for all of us must be faced and that means by individuals, communities, councils and the government. In Hull, we are fully committed to reducing our carbon emissions and we have a target of zero carbon emissions by 2030. Having an aim, or vision, is one thing, delivering on it over time takes planning and real change that builds upon change. Towards our commitment on this we have a carbon neutral objective and we will be committing £1,120,000 to it in 2020/21, rising to £3,850,000 in 2021/22 and £13,250,000 in 2022/23. This is a total investment in all our futures of £18,220,000 over the next three financial years. Green Renewable energy production and investing in saving energy has been a theme in previous Labour Budgets in Hull and this will continue as a major priority.
While planning for a carbon neutral future we must also maintain current facilities for car drivers and we are committing £250,000 on upgrade works to Pryme Street Multi-Story Care Park; (MSCP); to ensure it remains safe and fit for purpose. As well as this we are investing a further £308,000 in 2020/21 and £60,000 in 2021/22 to refurbish other MSCPs and in a feasibility study aimed at planning future parking needs and requirements.
For a number of years now we have been developing a strategy around how best to use our corporate building, minimising cost and ensuring current buildings are able to deliver what is needed and are where they need to be. In furtherance of this we will invest a further £1,318M.
We are continuing proposals to demolish the former vacated ITEC building and develop a further phase of factory units as an extension to the popular Boulevard Unit Factory Estate. The new build would create a new capital asset and would generate an additional annual rental stream, which would offset the cost of investment which in 2020/21 will be £1,150M and £75,000 in 2021/22.
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Continuing to Deliver Transformation in Learning Skills & Safeguarding Children
We identifies two years ago that there was a shortage of available residential children’s placements in the city and in particular in-house provision which left us vulnerable to the vagaries of the market and meant that children were having to be placed further afield, away from their families, friends and communities, when they could be accommodated here. Since then we have committed funding to create three new residential facilities, including two small homes that are better able to provide from young people with more complex needs in a small setting. In furtherance of this we will commit £839,000 in 2020/21 and £400,000 in 2021/22. A spend over the next two financial years of £1,239M which is an increase on previous committed funding of £800,000.
In ensuring that our stock of children’s homes are maintained at a good level we will also be spending an additional £500,000 on existing homes.
Similarly we will put a further additional £283,000 investment into schools that we are responsible for under BSF to ensure they continue to be fit for purpose in educating our children. Our Schools Maintenance and Improvement Programme will be increased by £4M seeing a spend of £8,202M in 2020/21, £4M in 2021/22 and another £4M in 2022/23, an overall investment of £16,202M.
As part of our commitment to Special Educational Needs we will invest £288,000 in the Special Provision Fund – SEN.
Continuing to Deliver Improvement in our Neighbourhoods, Communities & Environment
We will continue and extend our commitment to ‘Green Space, Area Based Projects’; (S106); and ‘Local Community Initiatives’ by an addition £1M in each of these areas, an increase over all on previous commitments of £2m. An additional £1,250M is allocated to the improvement and maintenance of the city’s traveller sites to ensure they remain fit for purpose.
Continuing to Deliver on Operational Services
In line with recent years our investment in this area is significant as we seek to improve and regenerate both out city centre and many areas around our communities as well.
In any city with a major river and different waterways running through it the investment in bridge maintenance should be a constant and major commitment. Where this has not been maintained in the past there have been greater problems to
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Page 132 of 324 Appendix A(ii) deal with further down the line, with greater disruption. This was the case in 2002-03 when the assessed repairs to North Bridge were delayed by the then Liberal Democrat Cabinet for fear of causing annoyance. In order to ensure safety and proper assessment, repair and maintenance we are allocating £12,470M in 2020/21 and £2,000M in 2021/22, an investment uplift in our bridges of £14,220M.
Recognising the significant increase in tourist attraction to our city, and that many coaches that have nowhere to stay simply pass through our city delivering visitors using our port to other destinations, we are providing £180,000 to develop a City Coach Park. This should benefit the local economy and enable many who would otherwise not stop off in our city the benefit of our excellent cultural and heritage offer which is set to be improved further as part of our Martine City status.
Residents feel safer and identifying anti-social behaviour and other criminal activity has been significantly aided by Labour’s decision to roll our city wide CCTV in 2003/4. It is now time for the latest round of CCTV Camera replacement and we have allocated £300,000 to achieve this.
Last year we committed to cycling network improvements across the city. In delivering this we commit £500,000 in 2020/21 and a further £450,000 in 2021/22. While restricted by a road network that is overcrowded these improvements are essential in also promoting the reduction of our carbon footprint and increasing health and fitness generally.
Along a similar theme we are providing £230,000 for Park and Ride facilities to try to reduce reliance on individual car journeys.
High Street regeneration has featured large in recent years and continues to do so with investment of a further £23,200M on top of that already committed. This latest stage should complete the face lift in our centre and build on the increased footfall, visitor attraction and local resident enjoyment and pride in our city centre.
The Labour administration has responded to calls for improved highways verge maintenance, sometime is very innovative ways with the planting of bee and wildlife friendly wildflowers. All communities should benefit from maintained verges and so we are committing an additional £500,000.
Highways Projects generally will benefit from an additional £8,951M to improve on the quality of our road network. This means a total spend in this area over the next three financial years of £21,002M. We promised to address the backlog of repairs to our roads and are delivering these to plan.
The total additional investment in Operational Services over the coming three years is £49,371M with £38,171M of that coming from assumed external funding bids.
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Continuing to Deliver Hulls World Class Visitor Destination Programme
In the run up to 2017 we determined a list of priorities for the coming years such as the Beverley Road Heritage Project, the developing of the Beverley Road 52a-54 Brunswick Arcade, a Dance Studio, looking into a feasibility study to deliver a District Heating programme and renovating the historic Guildhall Time ball. We are also committed to continued working with partners to deliver the Albion Street regeneration, the Heritage Action Zone and we are starting to see the regeneration of Pearson Park as part of the Pearson Park Heritage Investment.
These priorities along with our 2017 Legacy programme which includes further investment in our Museums, the exciting plan for a Riverside Berth/Cruise Terminal and the revamp of Queens Gardens mean an investment of £53,624M over the next three years with £42,700M coming from assumed external funding bids.
Councillor Webster has already met and consulted with over 50 representatives of the city’s voluntary sector and further consultations will be held with the Business Community and the Chamber of Commerce. We will also consult with the Youth Parliament and in previous consultations with them I have found that they often have a better understanding of Budgets and the implications of finance than many on the opposition benches.
Summary
Local Government has now had a decade of unrelenting pressure on Council Revenue budgets which in hull have seen reductions in funding of 55%, (£130M).
Political turmoil at the heart of central government has resulted in the failure to deliver the much promised implementation of the Fair Funding Review and the move to 75% Business Rate Retention has been delayed for one year. This uncertainty is a challenge in terms of future planning although the Government has indicated that that it will retain the system of ‘top ups and tariffs’ relating to Business Rates which are vital to authorities like Hull.
While we have taken decisions over the last nine years to strengthen our business rate generation and grow our local economy our artificially tight borders and available development space restricts us in a way rarely seen elsewhere and presents us with a problem that has not been dealt with by central government. Revenue generation in areas like Hull are restricted by large numbers of lower banded properties as well. Government reliance on local councils generating their own income in this way severely disadvantages areas like Hull.
It is important, however, for any National Government to ensure they plan to support all areas of the nation fairly and equally and we will continue to call for this alongside many other local authorities.
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Unlike other Councils, Hull has managed to safeguard vital services and even enhance key priorities. We have protected libraries, museums, sport centres, welfare advice and parks and will always put the children we are corporate parents for first.
Despite the desperate assertions of the majority opposition group in Hull over a number of years that we have ‘Maxed Out The Credit Card’ the CIPFA Financial Resilience Index Data that is provided in these budget documents shows this simply not to be the case. Hull sits right in the middle of all Unitary Authorities for ‘Interest Payable/Net Revenue Expenditure’, and has in fact benefited from many years of the lowest interest rates in generations. This has allowed us to resist the hardest impacts of long-term austerity, attract very significant inward business investments of over £3BN since 2016 and achieve that fastest jobs growth in Yorkshire and the Humber.
The Labour administration’s decision to modestly bolster the council’s reserves, opposed by the Liberal Democrats, has been validated by this same data set, although we are still classed as very low in comparison to other unitary Authorities. The Liberal Democrats were happy to squander £104M between 2007-11 as well as use up £10M in reserves on top, leaving the council perilously close to danger but still argue each year to divert money away from what little we have in reserves. Their approach presents a serious risk to the city councils ability to defend services and deliver for our residents.
We remain committed to the view that the time to invest is in a recession. Austerity is always a race to the bottom but Hull; under this Labour administration; will continue to offer a different narrative in which the creation of jobs and opportunities demonstrates that there is a better way. People have started to believe in their City, their community and their Council, which seeks to unleash potential for the brighter better future we envision and aim for. One that the people of this City deserve.
We commend our budget for approval.
Cllr. Philip Webster, Portfolio Holder for Finance. on behalf of Cllr. Steven Brady the Leader of Hull City Council.
January 2020
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Page 136 of 324 Appendix B(i)
MTFP - Revised Projections - In year movement (non-cumulative) 2020-21 2021-22 £000's £000's Budget Gap as per Approved Budget Report February 2019 4,116 6,660
Adverse movements
Impact of 2019/20 Pressures CYPS Placements arising in 18/19 1,700 1,700 Other CYPS Learning - Home School Transport 300 300 Further CYPS Placements 19/20 1,500 1,500
ASC Placements in 18/19 impacting 19/20 3,000 3,000 Further Increases 19/20 2,500 2,500
School Trading 500 500
Savings Non Delivery CYPS Non Pay 100 100 Disability Short Break 100 100
Pay Award - additonal 1% = 3% 1,200 2,400 Loss of Planning Income 200 200 Updated Capital Financing Projections 0 500
Commitments Electric Car Race 100 0 Grounds - assumed continuation of current service level 0 200 KAT Travel Card - increased uptake 200 200
Priorities CYPS Transformation 1,200 1,200 Carbon Neutral Initiative 200 200 Training 250 250 Fly Tipping 100 100 Taxi Marshalling 60 60 Borrowing Costs 350 550
Gap before mitigation 17,676 22,220
Beneficial movements
Pension Contributions -1,250 -1,250 Additional Precept -1,716 -1,716 RSG / Social Care Grant -2,340 -7,022 Public Health Grant Uplift -500 -500 Council Tax Base increase -670 -745 MRP /pFI -4,800 -4,800 Income Uplift -250 -250
One off mitigations
PFI Credit re Extra Care -3,400 Collection Fund Surplus -1,500
Savings
Directorate efficiencies (See Appendix B(ii)) -1,250 -1,250
0 4,687
C:\Program Files (x86)\neevia.com\docConverterPro\temp\NVDC\119D778A-CF90-456D-81E0-01D89BFAD57D\5b199e37-56dd-44c3-a8ee-8d7a6e8ea8dePage 137 of 324 19/02/2020 14:25
Page 138 of 324 Proposed Budget Savings 2020/21 Appendix B(ii)
1. Continuing Savings already included in the MTFP
Area Proposal Budget Saving Adult Social care IMPOWER Transformation £2,800,000
Cross Cutting Savings Customer Enablement £250,000
Total Savings b/f £3,050,000 2. Additional Efficiency Savings (Total £1,229,000)
Area Proposal Budget Saving Business Finance Delete vacant Grade 15 Post. Temporary cover arrangements to be made £100,000 permanent. Reduce staffing budgets in light of anticipated flexible retirements / part £20,000 time working / pensionable costs Transformation Reduce staffing budgets in light of anticipated flexible retirements / part £30,000 time working /pensionable costs Economic and Development Reduction in budget into Development Management as this will be met by £15,000 the 5% CIL receipts from 2020/2021 onwards. Over the last year this equated to @£12k but the £3k increase is reflective of more schemes being caught by CIL moving forward. This will have no impact on service delivery and will partially cover the funding for the S106/CIL officer post. Reduction in Budget into Development Management as will be met £15,000 through £15k Government Grant for Brownfield Register and custom/Self build work. This work is currently partially undertaken by a policy planner focussed on housing so provides an accurate reflection of the work undertaken currently which is currently paid for from revenue. Property and Assets Energy Budget – efficiency saving £50,000 Commercial Property Portfolio – increased rental income £25,000
Page 139 of 324 Reduce staffing budgets in light of part time working / pensionable costs £20,000 Capitalising the lease of specific shops £160,000 Streetscene Capitalising Staffing Costs £50,000 Waste Bin Liner Contract Efficiency £10,000 Optimisation of trade waste rounds such that expansion of the customer £20,000 base can be accommodated within existing resources. Additional income will therefore be received with negligible additional collection costs. Additional recurring revenue will be generated by a fixed term short term marketing/sales programme Reduce staffing budgets in light of part time working / pensionable costs £18,000 Kitchen Waste Promotion reducing disposal costs £20,000 Internalising Traffic Light Maintenance and reducing costs £15,000 Reduce non-pay budgets to reflect lower operating costs at Ferensway £15,000 Interchange ASC - Reduced use of Agency Reducing the spend in 2020-21 will result in the ability to increase the £200,000 Coverage vacancy allowance reducing ASC budget. ASC - Maximise in house Through Brokerage maximising use of in-house provision, and lower cost £275,000 provision alternatives before sourcing any external placement where Hull CC / others offer a relevant services. ASC -Reduction in Casuals The service is seeing an underspend on the use of casual staff, partly as £75,000 a result of continued efforts to fill vacancies and partly as a drive to reduce Agency / Casuals and overtime across the service. Neighbourhoods Some potential to make savings on staffing budgets £11,500 Housing Strategy Potential for further capitalisation of non pay costs £14,500 Print Unit, MFDs & External Print MFD efficiencies generate savings £20,000
Customer Services Planned Capital investment to be met from corporate ICT capital £30,000 resources Deputy Chief Exec Budget Saving from Restructuring £20,000 Total £1,229,000
Page 140 of 324 Appendix B(iii) Planning for 2021/22 Onwards
Expected Year of impact Services
Transport - ongoing 2020 All
Worksmart – ongoing 2020 All
ASC Transformation – ongoing 2020 ASC
Community Well Being Services 2021 ASC / CCG
0-19 / Early Intervention 2021 CYPS / ASC / CCG
Homelessness / Adults in need of support 2021 ASC/ Housing / PH
Commercial Property Review (Generation of receipts) 2021 Regeneration
Contract Review – Civica 2022 Finance / ASC
IT Migration to Cloud 2022 All
Youth Services 2022 CYPS
Energy from Waste / District Heating 2022 Regeneration
Residents City Card 2022 Regeneration
Contract Review – NPS 2023 Regeneration
Contract Review – Waste 2023 Regeneration
Wind Turbine(s) 2023 Regeneration
Page 141 of 324 MTFP Review Programme
Page 142 of 324 Appendix B (iv)
Service Public Health Directorate Public Health and Assistant Tim Fielding and Public Adult Social Care Director Protection
Key The key role of the Public Health service is to protect and improve the health and responsibilities wellbeing of the population of Hull. The Public Health Service area includes the following functions: • Public Protection • Public Health Improvement and Commissioning • Health Intelligence • Healthcare Public Health • Health Protection The public health function is system-wide, working with partners from all sectors across Hull and beyond. In addition to delivering against the specific statutory duties, the service have a wide-ranging function to advocate for health and wellbeing and work with partners to improve health and wellbeing and reduce inequalities through the environment and wider determinants of health, community engagement, legislative levers and service delivery. Public Protection has a key role in delivering a wide variety of essential statutory duties in the following areas: • Food Health and Safety • Licensing • Trading Standards • Environmental Regulation The Service’s mission is to assist in the creation and maintenance of a healthy, safe and attractive environment within the City of Hull; to protect the health, safety and welfare of residents, visitors, employees and the self-employed and to ensure a safe and fair trading environment in which industry and commerce can flourish.
Budget 20/21 £000’s Staff Costs 4,166 Budget Changes £000’s Other Expenditure 18,263 Savings Gross Expenditure 22,429 Fees & charges -7 Fees & Charges -924 Grant Income -400 Other Income -83 Gross Income -1,407 Investments
Page 143 of 324 Appendix B (iv)
Net Expenditure 21,022
Staff Establishment (FTE/staff) Headcount 92 103
Key dimensions Key outcomes of relevance that are monitored include: • Life Expectancy – inequalities gap • Healthy Life Expectancy at birth • Child Obesity rates • Sexual health related outcomes • Child development • Injury prevention • Suicide rates • Drug related outcomes • Alcohol-related outcomes • Workplace / occupational injuries • Workplace sickness rates • Infectious disease rates • Air quality • Smoking Prevalence • Breastfeeding rates • Dental health of children/adults
Significant • Support the establishment of the Fairer Hull Commission projects • Develop refreshed approach to Joint Strategic Needs Assessment • Lead or significantly contribute to the development/delivery of key strategies e.g.: • Joint Health & Wellbeing Strategy • Towards an Active Hull Strategy • Emotional Wellbeing and Suicide Prevention Plan • Alcohol Strategy • Air Quality Strategy • Oral Health Action Plan • Re-commissioning of Public Health Nursing 0-19 years service (i.e. Health Visiting and School Nursing) in integrated approach to services for children and families • Ongoing digitisation programme across Public Protection • Lead whole system approach to healthy weight in children (ie tackling childhood obesity) • Work with range of internal and external partners on wider determinants of health, for example in relation to spatial planning, housing and active/sustainable travel
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Significant • Capacity as a result of challenges in recruiting to some vacancies and ongoing Risks HR processes. Being managed through a range of mitigations. • Financial uncertainty due to local authority settlements not yet having been announced, including the Public Health Grant
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Service Adult Social Directorate Public Health Assistant Alison Barker Care Director
Key Adult Social Care includes six strategic and operational areas. responsibilities • Prevention and early help • Personalisation and long term support • Commissioning External Services • Regulated services • Quality, brokerage and performance • Transformation
Budget 20/21 £000’s Staff Costs 22,153 Budget Changes £000’s Other Expenditure 96,268 Savings -550 Gross Expenditure 118,421 Transformation Savings -2800 Fees & Charges -18,402 Fees & charges -27
Grant Income -24,307 Investments Other Income -205 ASC Increase 2500 Gross Income -42,914 ASC Placements 3000 Net Expenditure 75,507
Staff Establishment (FTE/staff) Headcount 714 875
Key Externally commissioned Delivered Annual dimensions Services provided to (circa Value people)
Residential Care to people 1,000 £25m 65 and over.
Residential Care to people 300 £15m under 65.
Homecare 1,000 £11m
Direct Payments 600 £10m
Supported Living 100 £5m
Day Opportunities 250 £3m
In addition, some services are provided internally.
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Significant • Continuing innovations in Social Work practice to modernise the support projects provided to people looking for support, based on the maxim, “A life not a service underpinned by support to help your-self; help when you need it and finally; help to live your life. • Ongoing integration with Health and the CCG • Significant work on commissioning a new Day Opportunities contract and a Supported Living framework. Initial work on re-commissioning a Homecare framework •
Significant • Increasing demand and pressures due statutory duties e.g Liberty Protection Risks safeguard implementation Oct 2020. • Instability in the local market resulting in market collapse and increasing costs. • Workforce and recruitment pressures
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Service City Children Directorate Children’s, Young Assistant Fiona Fitzpatrick Safeguarding People and Family Director Service
Key • Children’s Social Care includes 5 strategic and operational areas responsibilities • Early Help • EHASH and Vulnerable Young People • Locality & Assessment Teams • Looked After Children and Leaving Care Teams • Resources inc Children’s Homes and Fostering & Adoption Teams
Budget 20/21 £000’s Staff Costs 23,584 Budget Changes £000’s Other Expenditure 28,941 Investments
Gross Expenditure 52,524 CYP Placements 1 700 Fees & Charges -368 Further CYP Placements 19/20 1 500 Grant Income -4,482 CYP Non Pay 100 Other Income 0 CYP Transformation 1 200 Gross Income -4,849
Net Expenditure 47,675
Staff Establishment (FTE/staff) Headcount 618.91 765
Key dimensions • Contacts (Rate per 10,000) – 2640.7 (2018/19 • Early help Assessments (year-end Rate Per 10,000) - 187 figures) • Referrals (Rate Per 10,000) – 775.7 • Social Care Assessments (Rate Per 10,000) – 655.9 • Section 47 enquiries (Rate Per 10,000) – 375.3 • Initial Child Protection Conferences (Rate Per 10,000) – 120.1 • Children in Need (Rate Per 10,000) - 566.6 • Child Protection Plans (Rate Per 10,000) - 94.9 • Children Looked After (Rate Per 10,000) - 140 • Care Leavers (No. at Year End) - 227 • Adoptions (% Adopted) – 12%
Significant • Ofsted Improvement Plan projects • CYPS Transformation Programme • Placement Sufficiency Plan
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Significant • Not making sufficient improvement following the inadequate judgement from the Risks Ofsted inspection is a major risk to the Council • Capacity/caseloads compromise quality and oversight of risk • Workforce and recruitment pressures • Insufficiency of placements both internal and external to meet rising demand levels
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Service CYPFS Directorate Learning and Assistant Jo Moxon Skills Director
Key • School organisation, sufficiency and place planning responsibilities • SEND provision, quality and effectiveness • School Effectiveness and outcomes for children and young people: Partnerships and accountability • Inclusion and access to Learning for all children and young people • Virtual school for LAC • Hull Music Service • Early Years provision and partnerships • Education Safeguarding • Governance and accountability of education and inclusion issues with the Council and partners.
Budget 20/21 £000’s Staff Costs 4,364 Budget Changes £000’s Other Expenditure 3,034 Savings Gross Expenditure 7,398 Fees & charges -9 Fees & Charges -2,169 Grant Income -2,119 Other Income -581 Gross Income -4,869 Investments Net Expenditure 2,529 Home to school 300 transport
Staff Establishment (FTE/staff) Headcount 91 130
Key dimensions • Education standards in the city of Hull linked to employability post 16 • School readiness • Attendance and exclusion linked to children at risk and those with SEND • SEND provision and outcomes • Relationships with all partners including parents
Significant • Strategic oversight and action in of all aspects of education and inclusion via the projects Hull City Learning Partnership • Accountability and governance by the Council for areas of responsibility linked to Education and Inclusion ( Boards)
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• Early Language and Literacy( School Readiness) • Outcomes at Key stage 4 and beyond • Response and progress following the SEND Ofsted revisit • Home to School Transport
Significant • Loss of positive working partnerships and meaningful co operation with schools Risks and Academy CEOs • Lack of increase in school places in time to address the need. • Increasing demand on SEND budgets and provision • New Ofsted framework results in fewer good and outstanding schools
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Service CitySafe & Early Directorate Childrens, Young Assistant Tracy Harsley Intervention People & Family Director Services
Key Performance Service responsibilities Promote shared understanding and intelligence to maintain a clear line of sight with regard to the ownership of data and accountability for improved outcomes for Children, Young People and Family Services
HTAE 14-19 Team The Service has a key role to play in the delivery of the City’s response to some key issues, such as the City Plan and welfare reform and ensuring our activities are aligned to these and contribute to the success of the City. Our clear understanding of the skills need of employers enables the Service to play its part in closing the skills gap within the City. Our 14-19 team support the improvement of the quality of the education and training of young people aged 16-19; Support employer needs, economic growth and community development working with Local Enterprise Partnerships (LEPs) as appropriate; and support the development of provider and stakeholder networks that help to deliver the RPA targets.
Community Safety • Fulfil statutory function relating to Section 17 of the Crime and Disorder Act • Statutory Landlord Function for HCC under the ASB and Crime Act; • Statutory functions under Counter terrorism & security Act 2015 • Provide support services to vulnerable victims of Domestic Abuse; act as IDVA and deliver a perpetrator programme. • Statutory responsibility via the CSP to undertake Domestic Homicide reviews
Commissioning Provide lead Commissioning and support for commissioning in all areas of CYPFs, coordinating and working across the council to ensure high quality service provision through effective management of contracts, following all appropriate procedural legal requirements.
Budget 20/21 £000’s Staff Costs 14,590 Budget Changes £000’s Other Expenditure 6,386 Savings Gross Expenditure 20,976 Fees & Charges -659 Grant Income -12,235 Other Income -1,329
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Gross Income -14,223 Investments Net Expenditure 6,753
Staff Establishment (FTE/staff) Headcount 610 701
Key dimensions HTAE • HTAE adult education service provides training and education in the Humber region. Adult learning programmes and apprenticeships make up the great majority of the provision. • The Service provides a diverse range of occupational activities within the region and holds a funding contract with the Education and Skills Funding Agency (ESFA), we also receive European Social Fund and income directly from employers and learners. Apprenticeship, Traineeship and Study Programmes provision are mainly delivered in Engineering, Business Administration, Customer Service, Business, Creative and Digital Media and Construction. The Service also provides Apprenticeships and Study Programmes in the motor trades via one subcontractor. Through the Adult Skills and Community Learning Budgets the Service offers a range of accredited and non-accredited provision from pre-entry to level 5. We offer a wide range of courses including Supporting Teaching & Learning, Childcare, Health & Social Care, Leadership and Management, English, Maths, ESOL, ICT and Community Learning including Family Learning. • Our Young People Skills and Employability service operates primarily from Kenworthy House however also delivers its service from Schools, Colleges, Training Providers across the city: • Services are focused on supporting a range of vulnerable young people aged 14-29 into Employment, Education and Training either directly or indirectly. Direct services include the provision of face to face services and projects which with the support of partner agencies provide significant support to some of the most vulnerable young people across the city. Indirectly, the YPSE service works in partnership with most internal young people support services and in addition works with a number of external partner agencies who support vulnerable young people aged 14-29; these include: schools, colleges, training providers, employers, Job Centre Plus, City Health Care Partnership, Humber LEP etc. Community Safety • 3500 open ASB cases each year; average open caseload 450 per month • 2400 new DA referrals opened each year, average open caseload 453 per Month
Performance • Service responsible for all data and performance functions within the directorate and under considerable pressure due to high intensity and volume of work
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Significant HTAE projects External Grant activities: The YPSE service has been successful in obtaining external grant via either trading services with schools, colleges and training providers or tendering for external grant in association with local partners or directly. The service has been successful in obtaining a total of £9 million of European funds and local match to deliver the Youth Employment Initiative in partnership with the Humber Learning Consortium. This project has seen the YPSE team adding an additional 10 staff to its resources to support vulnerable young people aged 16-29 back into employment education and training. This project is delivered in partnership with additional commissioned partners, all with the same aim of supporting individuals into sustainable employment outcomes. Hull Training and Adult Education successfully deliver a significant proportion of the training and development elements of this project.
The YPSE service also delivers the Big Lottery Funded ‘Building Better Opportunities’ programme in partnership with Humber Learning Consortium. This programme offers similar services however is aimed at the 25+ age group and adds an additional 3 staff to our resource. Community Safety • Responding to DA Bill; • DA minimum standards development • Channel Panel reforms • Community Safety Partnership, rebrand and relaunch.
Significant HTAE Risks • Future clawback (courses) • Reduction in apprenticeship standard values in year • Recruitment of teaching staff • Aging IT software and equipment • Proposed accommodation relocations for HTAE • Local authorities devolution of the adult skills budget Community Safety • Demand becomes greater than capacity • DA service operating above recommended caseload guidance
Performance • Ensuring appropriate skill level and capacity within the team is a critical issue in order that effective oversight is in place
Commissioning • Ensuring appropriate skill level and capacity within the team is a critical issue in order that effective oversight is in place
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Service Economic Directorate Regeneration Assistant Alex Codd Development & Director Regeneration
• Key City Economy responsibilities • City Planning • Strategic Planning and Partnership
Budget 20/21 £000’s Staff Costs 5,649 Budget Changes £000’s Other Expenditure 3,026 Savings -50 Gross Expenditure 8,675 Fees & Charges -1,474 Grant Income -2,665 Investments Other Income -26 Gross Income -4,165 Loss of Planning Income 200
Net Expenditure 4,510
Staff Establishment (FTE/staff) Headcount 96 125
Key dimensions • Lead, corporate wide, responsibility for continually developing, agreeing and overseeing delivery of the City Plan, encompassing a long-term city- wide economic growth strategy. • Ensuring all new development is of a high quality of design which respects the heritage of the city is climate proofed and located in sustainable locations providing convenient access to employment, services and points of learning for all in a way which supports healthy lifestyles whilst minimising pollution • Strategic planning and business intelligence, including the development and oversight of the implementation, review and analysis of the Corporate Plan. • Lead on the climate change and Living with water agenda to enable the development of a low carbon, environmentally sensitive city • Enable the delivery of inclusive growth through embedding the principles of equality, fairness and digital enablement across the city • Supporting the employment, training and development of care leavers across the Council and other partners through the business Leadership Board • Enablement of key development sites through the development of funding bids to
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support the occupation of these sites, their acquisition or addressing constraints that preventing their delivery.
Significant • Delivery of a number of EU funded projects including CLLD funding, EU projects funding for Business Growth, EU River Hull Plus • Delivery of a number of LEP funded projects supporting investment in infrastructure to enable business and residential development • Delivery of the Councils responsibilities as a Lead Local Flood Authority • Review of the Local Plan and provision of implementation guides through the production of a suite of Supplementary Planning Documents. • Supporting the growth of new businesses through the provision of business support services with a particular focus on supporting those distanced from employment, the young and women.
Significant • ESIF and EU funding comes with a challenging timeline for Risks delivery/spend. Funds need to be carefully managed to achieve optimum results - a clear focus needs to be maintained. ESIF will require significant resource (staff) to manage and to ensure integrity of programme spend • Brexit - EU Structural Funding - risks concern level of access and management arrangements post Brexit. Leading to either/or loss of access to funding, lack of clarity regarding management of programmes. Resulting in impeded economic (and social) development opportunities - jobs and enterprises • The Service depends on significant amount of external funding through LEP, MHCLG, BEIS funding programmes for which the future of remains unclear. • Development income from planning , building control and archaeology remains volatile given the changes in building control and planning legislation, and a slowdown of the construction sector • A reshaped service will require a different set of skills and experiences so in the short term there may be a risk of competency within newly shaped teams
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Service Major Projects Directorate Regeneration Assistant Garry Taylor & Director Infrastructure
Key responsibilities The Major Projects and Infrastructure service is the Council’s driving force for the reinvigoration the city centre and plays a key role in coordinating partners to deliver cultural and economic growth.
Through the procurement of contracts and the delivery of capital schemes, the service ensures that opportunities to integrate communities, create jobs and provide opportunities for local labour and the wider supply chain are fully embraced in project work.
In delivering the Council’s strategic economic priorities, the service strives to ensure that the city’s built environment and transport network is well maintained and that capital project delivery contributes to the health and wellbeing of Hull’s residents. Uniting a diverse range of specialist teams, the service employs innovative solutions to meet national government objectives for improving green transport and works with harder to reach community groups to achieve social value.
Visitor Destination, City Centre, Culture, Arts, Tourism, Events and Visitor Economy • Increase and sustain the value of the local visitor economy (£328m 2018), including employment within the sector. • Delivery of CAPEX schemes across multiple MP&I Facets. • Maintaining custody of completed legacy project defects and warranty work. • Provide a high quality visitor welcome for the City. • Sustain the existing and draw in new economic uses into the City Centre through both an inward investment and direct delivery role. • Manage Trinity Market on a day to day basis, deliver a growth strategy to increase footfall and spend within the market. • Deliver the major annual events programme including; elections, Christmas lights, Hull Fair and Lord Mayors Parade. Provide event based technical solutions/support for city partners including Freedom Festival, Humber Street Sesh and Absolutely Cultured. • Support and encouragement of unique and independent cultural, economic and arts sectors within the City Centre. • Support critically engaged work within the independent arts sector including non-profit making organisations through funding initiatives, development advice and advocacy as well as direct intervention.
Culture & Leisure Commissioning
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Commissioning Leisure development services plus libraries, museums and galleries and civic catering, and the management of parks and theatres and halls.
Highways Capital Programme & Lighting Assets • Development and maintenance of a safe highway network and electrical assets for the benefit of residents, businesses and visitors to Hull. • Establishment of strategic direction for transport development and identifying the needs of the city in future years, ensuring that the highway infrastructure supports the needs of residents, businesses and visitors. • Supervision of all contractors working on highway network and developers promoting their works for adoption, ensuring compliance with national & local standards enabling transport access to support the growth of the city’s economy and creation of jobs. • Provision of convenient access to employment, services and points of learning for all in a way which supports healthy lifestyles.
Schools Capital Programme & Private Finance Initiative Contract Management • Deliver sufficient pupil places within mainstream and special educational needs school estate through refurbishment of existing schools and/or new build. • School asset management. • Contract management of the School and Extra Care PFI schemes. • Contract management of Bonus Arena.
Budget 20/21 £000’s Staff Costs 1,521 Budget Changes £000’s Other Expenditure 32,710 Savings Gross Expenditure 34,231 Fees & charges -79 Fees & Charges -13,089 Grant Income -11,756 Other Income -704 Gross Income -25,549 -6,687 Fees & Charges -11,756 Grants (inc PFI) -703.80 Other -6,402 Leisure RCCO Investments Net Expenditure 8,682
Staff Establishment (FTE/staff) Headcount
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91.64 97
The Major Projects and Infrastructure service covers the following key dimensions: Key dimensions • Delivery of the objectives of the following strategic programmes in partnership with key partners: o Hull Local Plan 2016 to 2032 o City Centre SPD and Associated Delivery Document o Hull Local Transport Plan o Hull 2017 Strategic Business Plan o Hull Cultural Strategy 2016 -26 o Five-year Strategic Tourism Action Plan in partnership with East Riding Council o Visit England Tourism Action plan (2015 -20) o Northern Powerhouse Strategy (2016) o Public Health Strategy o Public Art Strategy o Arts Council ‘ Great Art and Culture for Everyone’
• Delivery of circa £400m of CAPEX schemes, including but not limited to, Albion Square, Hull: Yorkshires Maritime City, Cruise Hull, Whitefriargate, Pearson Park, Schools Expansion Programme, District Heating, Cycle Network Enhancements and Major Roads Investment Programme. • Securing major funding bids and enhancing the the value of our assets and revenue base through investment in place and driving a buoyant economy. • Maintain Highways Maintenance Category 3, delivering a quality highways repair and investment programme to ensure full Growth Programme and reduce the level of financial liability for highways claims through. • Ensure that new highways are adopted to the highest standards and developments are sustainably linked to the existing highway network. • Provide direct support to delivering cultural programme in partnership with new cultural sector organisations. • Be part of the national conversation around Culture and Place with DCMS and sub-delivery agencies. • The encouragement of small scale, high quality, critically engaged work and support the independent arts sector including non-profit making organisations through funding initiatives, development advice and advocacy as well as direct intervention. • Support initiatives to develop and retain creative skills and talent, including the Hull University ‘Culture Campus’ initiative and the Hull College development. • Support the delivery of the new Hull and East Yorkshire Hospitals Trust Arts and health Strategy and contribute to Arts and Wellbeing initiatives of health partners. • Support the Local Cultural Education Partnership and the development of a
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cultural offer for young people of all ages. • Contribute to community cohesion and development through arts and cultural activity, reflecting the vitality and diversity of our city. • Develop a marketing initiative with Major Projects to support Invest Hull, particularly through providing a visible presence nationally for investors. • The focus is to improve the health and wellbeing of local residents, whilst improving the services currently delivered. Seeking to ensure the outcomes that residents live well and for longer; local people have healthy lifestyles and access to good cultural, leisure and recreational facilities.
Significant The service is delivering the following significant projects: projects • Albion Square development (mixed use – retail and residential) • Regeneration of Whitefriargate (Heritage Action Zone) • Cruise Hull • Hull: Yorkshire’s Maritime City • Queens Gardens refurbishment • Fruit Market regeneration scheme • District Heating & Green Energy Projects • Northern Park and Ride • River Hull East Bank development • Beverley Road Townscape Heritage Scheme • Pearson Park Restoration Scheme • National Picture Theatre Restoration Scheme • Guildhall Timeball Restoration Scheme • City Centre Public Realm Phase 3 and 4 • Stoneferry Corridor Improvement scheme • A63 Castle Street improvements, including iconic bridge and Roger Millward Way • Cycle Network Programme • Rail connectivity and electrification • Secondary Schools to the West of the City – additional pupil place capacity • Demolition and rebuild of Broadacre Primary School • Wave 13 Free School – 125 place Severe Learning Disability School • Development of the 10 year Library Strategy • Hull Culture and Leisure – Value for Money Review • Hull City Hall Review
Significant Overall Risks to MP&I Risks • Capacity issues and competing calls upon internal resources leading to a delay in delivery of the programmes • Projects are unable to attract enough interest from suitably qualified contractors (eg RIBA accredited architects) causing delays to delivery
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across the city.
Visitor Destination, City Centre, Culture, Arts, Tourism, Events and Visitor Economy • Maintaining sufficient skills within project teams to deliver the programme. • Lack of internal skills to meet diverse investment portfolio to meet increasing need to achieve elevated BREEAM standards and Carbon Neutrality, BIM following Grenfell and Project & Contract Management. • Change in scope of work to be delivered from Stakeholder leading to unrealistic delivery assumptions against scheme budget expectations. • Escalation of project costs due to inflation resulting from decision delays / programme creep relating to critical internal resource issues and procurement routes not being fit for purpose. • Income target for city centre and Hull Fair not being achieved. • Supplier costs for events significantly increasing including anti-terrorism & policing impact of not achieving income target and deliver the event to budget.
Culture & Leisure Commissioning • All debts, liabilities, obligations and expenses arising in relation to the Theatres and Halls and their operation are for the account of the Council, either directly or through the Management Fee. The budget also includes a sizeable income expectation. • Failure of HCAL to provide improved and sustained services. (the contract includes Leisure, Heritage, Catering, Parks, Libraries (statutory) and Sports Development services.) • It was intended that the amount of income generated by the company would rise year on year so that the Annual Payment may fall year on year. The Management fee has reduced over 3 years (2017/18, 2018/19 & 2019/20) by a total of £700k. 19/20 creates the biggest risk as £187k (of a £428k saving) has been allocated to the Theatre and Hall income target. • Highways Capital Programme & Lighting Assets • Failure to secure or monitor contractors leading to non-delivery of schemes or resulting in additional costs being incurred. • A63 scheme failing to secure Secretary of State Approval leading to non- delivery of the main scheme and failure to deliver the journey time saving benefits. • Loss of Category 3 status. • Failure of Statutory Undertakers buried services (eg. mains burst or sewer collapse). •
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School Capital Programme & Private Finance Initiative Contract Management • Failure to engage secondary schools to work with the Council to develop/remodel/expand their existing provision in order to create the additional pupil places within the secondary school estate.
• Changes to Government policy or legislation which may or may not adversely impact on the future of PFI schemes.
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Service Property & Directorate Regeneration Assistant Nick Howbridge Assets Director
Key • Strategic advice and professional services in relation to all land and property responsibilities matters across the Council • Estates and facilities management of operational land and buildings as corporate landlord including strategic management of the Council’s repairs and maintenance programmes and energy/utility budgets • Estate management of the Council’s investment and community assets portfolio and development sites including all sales and lettings, and facilitating development/private investment in economic regeneration and community facilities • Facilities Management of the Guildhall campus and Trinity Market including Guildhall business office, central post, delivery and scanning services, guildhall superintendents and Trinity Market care taking service • Partnership working across the public sector through Cabinet Office’s “One Estate” programme • Management and operation of the Council managed workspace portfolio • Contract management and client liaison for NPS Humber Ltd • Lead in terms of the property input to the Building Optimisation Programme/Worksmart to reduce size of operational estate and revenue costs associated from holding buildings • Delivery of major capital investment programmes and construction projects including spend to save/energy performance programmes • Acquisitions and disposals of assets in connection with regeneration programmes • Corporate and commercial building cleaning services • Hull catering including school meals and recent addition of commercial operations in the Guildhall, Endeavour and BBC building • Helping Hands cleaning service to vulnerable adults through the building cleaning service • Holiday Hunger – supporting the provision of food to children in deprived areas of the city through the Council’s catering service
Budget 20/21 £000’s Staff Costs 8,107 Budget Changes £000’s Other Expenditure 13,558 Savings -255 Gross Expenditure 21,665 Fees & charges -167 Fees & Charges -12,622 Grant Income -778 Other Income -2,228 Gross Income -15,628 Investments
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Net Expenditure 6,037 School Trading 350
Staff Establishment (FTE/staff) Headcount 351 582
Key dimensions • 300 corporate buildings ranging from offices, depots to crematorium & museums • 876 commercial lettings including range of ground leases, offices, industrial units, shops and offices with a rent roll of c.£5.0m pa • annual £4.0m land and property disposal programme to generate capital receipts to part finance the Council’s capital investment programme • strategic oversight and management of the Council’s energy budgets c.£4.50m pa • NPS Humber Ltd partnership company with a turnover of £10.70m and generating a profit of £460k with a service agreement contract that expires in 2023 • facilities management/building cleaning and Hull catering is an operational service carried out by a team of in-house building cleaning, catering and caretaking staff with over 620 employees (full & part time) • health and safety and building repairs & maintenance – budget reductions over the last two decade have left the operational buildings in such a poor state of repair that we have regular service failures in boilers/lifts and health and safety risks • aligning the service to the opportunities of the City Plan and Corporate Plan and changing the culture of staff to respond to new agendas and the opportunities that present themselves
Significant • Re-shaping the Commercial Property Portfolio Programme and reinvestment in projects corporate estate and start up business and factory units • HCAL Investment Programme (Ennerdale refurbishment) • Hull City Hall Refurbishment Programme (next phase stage replacement) • Guildhall Roof Replacement Project • Hepworth’s Arcade Roof Works • St Pauls Boxing Gym Roof Replacement & Disabled Lift • Louis Pearlman Managed Workspace Refurb & Extension of Boulevard Unit Factory Estate • Corporate Buildings Maintenance Programme • Corporate Energy Savings Programme • Strategic Property Purchase – more recent purchases McBrides – Sutton Fields & KCOM/Craven Park • Worksmart/Building Optimisation – Closure and Sale of Brunswick House/Refurb 79 Lowgate, Relocation of HCAL and Absolutely Cultured, closure and sale of Netherhall • Helping Hands • Holiday Hunger • Guildhall Campus Management – Civic Catering • Modernisation of Central Postal and Scanning Services
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Significant • Financial – variations on forecasts for income, expenditure and receipts as Risks arising from external factors or change • Health and Safety – as a property owner and manager the Council is exposed to a wide range of risks associated with buildings and construction, and through the provision of operational services such as facilities management, cleaning and catering there is exposure to a wider range of staff risks such as working at height, manual handling, loan working etc. • Time/Delivery – project and/or programme delay as result of unforeseen events/problems which delay delivery • Contractual – contractual problems arising from breaches of obligations leading to legal disputes • Political/Reputational – poor or negative publicity or social media arising from the activities of the service leading to reputational risk for the Council
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Service Streetscene Directorate Regeneration Assistant Andy Burton Director
Key Strategic and Operational Responsibility for; responsibilities • Domestic and Trade Waste • Environmental Enforcement • Street Cleansing, Fly-tipping • Grounds and Tree Maintenance • Parks and Open Space • Highway Reactive Maintenance (Ops responsibility only) • Highway Network Management • Infrastructure and Movement Management • School Crossing Patrols • Bridges and Structures • Civic Control - CCTV etc • Sports Ground Safety • Oil Pollution • River Work • Port Marine Safety and River Navigation • Highway Network Management • Traffic Signals • Quality Bus Partnership and Public Transport Oversight • Emergency Planning Forum • Severe Weather and Flood Response • Gully Cleansing • Passenger Transport • Car Parking and Parking Enforcement • Litter Enforcement • Fleet and Fleet Fuel Contracts
Budget 20/21 £000’s Staff Costs 18,295 Budget Changes £000’s Other Expenditure 28,033 Savings -148 Gross Expenditure 46,328 Fees and charges -125 Fees & Charges -9,868 Investments Grant Income -275 KAT Travel Cards 200 Other Income -1,904 Fly Tipping 100 Gross Income -12,047 Taxi Marshalling 60
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Net Expenditure 34,281
Staff Establishment (FTE/staff) Headcount 715 749
Key dimensions • c9m waste bin collections per annum • • c125,500 tonnes of waste handled each year • c6,000 fly-tips picked up • c1,700 commercial waste customers (approx. 20% of market) • c2,000+ litter bins serviced • c15,000 bulky item requests dealt with • Maintenance and cleansing of adopted 722kms of carriageway, 1531km of footway and 31km of road cycle track • Street Cleansing City centre and key sites to Keep Britain Tidy - Grade A and City wide – Grade B • c65,000 gullies serviced per annum • 151 Bridges, structures, subways and culverts maintained • c33million m 2 of grass cutting per annum • 6 major parks and 82 smaller parks/play areas, maintenance of a golf course • Trees – 19,000 on highways, 50,000 in parks/open spaces, 120,000 in young establishing woodland • 3 Multi-storey, 8 surface car parks and a park and ride site • c20,000 Penalty Parking Notices Issued per annum • c4,000 Wide-loads authorised per annum • c2,300 bridge lifts per annum • Public Transport ( 2018/19 figs): o Top 10 bus routes ( top five of both EYMS & Stagecoach ): ° Circa 11.3m passengers / journeys per annum ° The absolute total is proving more difficult to establish. o National Concessionary Scheme: ° Circa 6.1m journeys per annum ° Circa 37k pass-holders. o Hull Card: ° Circa 77k unit sales ° Circa 1.2m Journeys per annum o KAT Card: ° Circa 5k unit sales o Dial a Ride: ° Circa 12k journeys per annum • Passenger Transport: o Home to School / Respite: ° c 1050 Young People ° c 399k journeys per annum ° 217 Contracts (18 In House; 199 Private Sector) o Home to Day Care Centre / Respite: ° c 145 Adults
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° c 76k journeys per annum ° 11 Contracts (9 In House; 2 Private) o Additional Ad Hoc Respite Requests: • Circa 20k journeys. ° Civic Control Room 24/7/365 CCTV, Alerts and Monitoring
Significant In addition to routine business/service improvement projects, capital projects programme and continuous improvement, key projects currently are; • Carbon Neutral and Transport Modal Shift o Electric fleet (where appropriate and technologically available) o Bus Lane and Traffic Prioritisation o Parking charges o Active Travel (Led by Public Health) o Transport Review – On-going o Energy Estuary (University Led) o Highway Permit Scheme o Transport Co-ordination Unit o Living with Water (Regen Led) ° SUDS ° Flood Alleviation o Northern Corridor and Heywood Project tree planting schemes
• Circular Waste Economy o Waste Transfer Station Development o Renewal of Joint Waste Strategy and Future Contract Procurement o Implementation of Environmental Bill and New Government Resources and Waste Strategy (If and once passed) • Environment o Litter Enforcement – Pilot Concession Arrangement o Love Your Street Project o Humber Waste Alliance • Smart Cities o Smart Litter Bins o Smart Parking o Real Time Bus Information and Journey Planning – Interchange, bus stops, public space and personal o CCTV replacement and data capture for traffic modelling o Gold Standard Accreditation for CCTV Operations o Security in the Parks o Back Office Systems and Customer Reporting/Feedback in live time development o Smart Gullies o Smart Bus Information for Disabled People
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o Citilogik o Smart Freight (University Led) o Humberside Fire & Rescue Services – Collaboration for Bonfire Safety • Serious and Organised Crime Project (Police Led) • Modern Day Slavery (Citysafe Led) • Hull City Centre, Hessle Road and Beverley Road Corridor Projects (Multi- Agency) • Brexit o Border Force and Counter Terrorism Collaboration o Operation Wellington – Traffic Movement • A63 o Traffic Modelling and liaising with Highways England and ERYC to mitigate impacts • Depot Re-modelling at Stockholm Road • Fleet Contract Renewal
Significant • Resources required for the pace of environmental change are outstripped by Risks societal demand and/or climatic impacts. Capacity to change in a timely manner or for known sound climate/economic reasons. Services impacted include waste, parking, cycling, electric vehicles, mobility congestion, active travel, economy and budget. External influences include capacity of utility companies to put in the infrastructure required and Government Departments to get beyond “Pilot” and fund roll out. • If the Place Board and Multi-Agency working doesn’t continue to build on the strong base it has. • The need for Government departments to move from Capital to Revenue led funding streams based on tech and data-based services – It is widely accepted however a way forward needs to be identified • New Government Resources and Waste Management Strategy – Could have significant implications for future design of waste collection services • Maintenance of assets o As money becomes even more scarce due to growing demands – a continued focus on existing assets, the adoption of new assets and their pressure on existing budgets going forward and the need to spend on the unseen • Recognition that customer expectations do not diminish even when service cuts are explained. The needs of the customer change and services need to be in tune with those expectations. • Training and Development – To ensure our people are competent to undertake the duties being asked of them and to continuously adapt to the changing work, economic environmental and social influences. Ensuring a programme of recruitment and development into achieving the identified Corporate outcomes.
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Service Corporate Directorate Regeneration Assistant Jacqueline Gay Communications Director & Marketing
Purpose: Key responsibilities Leads and oversees the work to communicate the key priorities, policies, decisions and strategies of the council to a wide range of internal and external publics and stakeholders, including:
• Raising awareness of the council’s decisions, policies, strategies, priorities and services, helping to ensure that residents and other stakeholders can access these, get involved and have their say • Building/managing the reputation of the council and the city through effective media relations and reputation management. • Providing communications expertise and support to help the council meet its legal and statutory duties. • Developing, managing and creating content for the council’s core corporate channels in a complex, continuously changing multi-media environment. • Advice and co-ordination to ensuring all communications are accessible, timely and meet the needs of audiences including those who are hard to reach. • Developing, maintaining and monitoring compliance with the council’s corporate identity and the Hull place brand. • Leading, developing and supporting the delivery of council-wide internal communications. • IC Strategy and delivery, including supporting internal transformation and change communications. • Shaping and working with partners to deliver a consistent, co-ordinated approach to city marketing and reputation that maximises Hull’s presence regionally, nationally and internationally. • Providing crisis communications advice and services for the council, the city (as part of LRF) and to schools. • Effectively managing organisational demand for communications support in line with corporate priorities. • Communications and marketing advice and delivery of key comms services (see below) • Establishing/reviewing frameworks, guidelines and protocols within the organisation and with partners to ensure best/most appropriate use of people, resources and available channels.
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Budget 20/21 £000’s Staff Costs 542 Budget Changes £000’s Other Expenditure 94 Savings Gross Expenditure 636 Fees & Charges -23 Grant Income Other Income -25 Gross Income -48 Investments Net Expenditure 588
Staff Establishment (FTE/staff) Headcount 15.4 16
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Services: Key dimensions • Marketing/communications strategy development and implementation • Content creation/strategy/implementation for council owned channels including: hullccnews.co.uk and investhull.co.uk; HCC twitter, Facebook and Instagram; Public Health Hull twitter; and Hull, Yorkshire’s Maritime City website and social media channels • Copywriting and design of key corporate publications • Reactive and proactive media relations • Public Health and other behaviour change campaigns • Support for HRA communications with tenants and residents • Graphic design, illustration and video advice, services and commissioning • Management of the council’s Marketing and Design Framework • Management of the council’s outdoor advertising and city dressing network • Internal Communications strategy, planning, content creation and delivery including staff ezine, Team Talk cascades, internal campaigns and delivery of staff awards • Communications support for internal transformation programmes and wider organizational and cultural change • Communications planning, monitoring and evaluation • Media Training and Coaching • Media monitoring and news briefings
Annual Calendar includes: • IC Action Plan • Priority Campaigns Plan • Media Protocol/Editorial Guidelines Review • Media Training for officers and members • Staff Awards • Employee Communications Survey • Resident Communications/Trust Survey via People’s Panel • Corporate ID Review Every two years • Employee Survey (with Organisational Development/Insight Team) Every three years • Internal Communications Framework Review • Marketing and Design Framework procurement • Corporate ID and style guide
Significant • Hull Yorkshire’s Maritime City; HCC Major Projects/Capital Programme; Public projects Health and other behaviour change campaigns including carbon neutral agenda, waste, recycling and litter, city digital and customer programme; support for inward investment and city marketing; Children Young People and Family Services internal and external communications. • Delivery of 3-year internal communications framework including internal campaigns and development of new and existing channels to engage employees in the delivery of city and council objectives (City Plan/Corporate Plan), celebrate staff achievement and encourage new ways of working/transformation programmes. • Ongoing development of council owned communications channels across a
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range of traditional and new media. • Contribute to the delivery of joint priority campaigns and communications with key partner agencies including government, PHE, EA, CCG, Humber LRF, Humberside Police, Transport for the North, Yorkshire Water, Humber authorities etc.
Significant The ability of the team to meet organisational demand for its support and expertise Risks in order to deliver on the ambitions and priorities of the City Plan and Corporate Plan and other key priorities and strategies (as highlighted above). Ensuring the team has the latest knowledge, skills and capacity required to deliver communications within a complex, 24/7 multi-channel environment and which meets the needs of all of the council’s public and stakeholders, including those who are hard to reach. Potential impacts include: Decline in reputation of council and city affecting ability to attract investment, create jobs and secure growth including the population/workforce needed for Hull to thrive Citizens and businesses not aware of the full ranges of services, support and opportunities on offer through the council and its partners Residents and visitors unaware of what is going on the city and therefore unable to take advantage of what it has to offer
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Service Town Clerks Directorate Director of Legal Assistant n/a, included and Partnership Director within Director Services role
Key • Legal, Procurement, Committee Services, Digital and Print media, Information responsibilities Governance, Customer Services and Customer Feedback, Member Support, Elections, Welfare Rights, Registrars, Coroners, Crematoria
Budget 20/21 £000’s Staff Costs 5,474 Budget Changes £000’s Other Expenditure 1,461 Savings -20 Gross Expenditure 6,935 Fees & Charges -299 Grant Income -1 Other Income -875 Gross Income -1,175 Investments Net Expenditure 5,760
Staff Establishment (FTE/staff) Headcount Estimated (excl Cust Services) 102 114
Key dimensions • Council wide governance in relation to partnership working, decision making, information management, complaints. whistleblowing, transparency and digital and print publication, excluding internal audit. Procurement and legal advice services including welfare rights. Registration services including voter registration, land charges, coronial services, births deaths and marriages. Crematoria management.
Significant • 1. Combined Police and Crime Commissioner and Local Elections May projects 2020 • 2. Procuring and entering into legal agreements for all (major) projects undertaken by the Council (eg Maritime, Albion Square, Stoneferry Road) • 3. Expanding number of proceedings with increased complexity to safeguard the welfare of vulnerable children and adults • 4. Implementation of Dynamic Purchasing Systems across Adult Social Care to facilitate efficient service delivery • 5. Transport Savings Board – corporate wide leadership in relation to delivery of transport savings and implementation of climate change agenda • 6. Smart City implementation - Corporate Leadership and engagement across the city and with external national and international partners on the delivery of the themes of activity which comprise the Smart City Strategy • 7. Establishing Cooperative Partnership arrangements with the University of
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Hull • 8. Re-purposing of Town Hall Chambers • 9 Expanding burial provision across the city • 10. Implementing revised ICT systems within Registrars Service for Registrations and Crematoria management • 11. Citywide digital access points implementation for Customer Services • 12. Corporate Data Protection Act assessment management under GDPR
Significant • Significant increasing pressure on Children’s Social Care and Adult Social Care Risks legal teams creating risk of burn out, • Significant pressure on Commercial and Procurement teams from major projects testing capacity and challenge of recruitment • GDPR Data Protection Impact Assessments across all service provision ( up to £17m fine risk) • Individual high risk cases • Income pressure from external sources as resource required internally
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Service Human Directorate Legal Services Assistant Jacqui Blesic Resources and Partnerships Director
Key • Human Resources Advisory and transactional Services responsibilities • Learning and Development • Health and Safety • Corporate Equalities
Budget 20/21 £000’s Staff Costs 2,741 Budget Changes £000’s Other Expenditure 415 Savings Gross Expenditure 3,156 N/A Fees & Charges -207 Grant Income -10 Other Income -361 Gross Income -578 Investments School Trading 50 Net Expenditure 2,578 Training 250
Staff Establishment (FTE/staff) Headcount 63 57.90
Key dimensions • Workforce headcount • Number of different services and locations
Significant • Organisational restructuring projects • Industrial relations framework • Cross Directorate learning • Health and Wellbeing
Significant • Breakdown in industrial relations leading to strike action or work to rule impacts Risks on all Council Services. • Aging workforce leaves Council with significant skills gaps and shortages • Prosecution from failures in health and safety
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Service City Customer Directorate Legal Services Assistant Lisa Buttery Services and Partnerships Director
Key • Bereavement Services responsibilities • Registration Services • Coroners Service • Customer Experience Team (CET) • Customer Service Centres • Welfare Rights • Contact Centre
Budget 20/21 £000’s Staff Costs 4,153 Budget Changes £000’s Other Expenditure 2,551 Savings -30 Gross Expenditure 6,704 Fees & charges -93 Fees & Charges -3,554 Grant Income -979 Other Income -1,058 Gross Income -5,591 Investments Net Expenditure 1,113
Staff Establishment (FTE/staff) Headcount 117.65 130.88
Key dimensions • Welfare Rights service helps and supports over 22,000 customer per year and achieve over 5 million pounds worth of finance gains to residents. • Annual activity: - Number of registered births – 5,500 per year - Number of registered deaths per year 3,044 - Number of marriage notices per year 2,300 - Number of ceremonies per year 650 - Number of reported deaths to the coroner – 2,800 - Number that result in an inquest – 250 • Fact to face function demand is around 30,000 visitors per month • The contact centre is an outsourced function dealing with a demand of around 70,000 calls per month and 2,500 emails.
Significant • Priory Woods Cemetery projects • CSC Refurbishment • Website development
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• Bereavement services replacement computer system
Significant • Delay to Priory Wood cemetery may cause income pressures Risks • No funding for bereavement service system • Predictive call volumes for 2020/21 exceed contract target
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Service City Directorate Legal Services Assistant Dave Richmond Neighbourhoods and Partnerships Director & Housing
Key Housing Revenue Account responsibilities Management and maintenance of c. 23,500 council dwellings for rent, and the allocation of properties to prospective tenants. Neighbourhood & Housing GF Provision of private housing services, aids and adaptations, homesearch, asylym and refugee services, homelessness, area based regeneration and neighbourhood based management
Budget 20/21 £000’s Staff Costs 3,291 Budget Changes £000’s Other Expenditure 2,249 Savings -26 Gross Expenditure 5,540 Fees & charges -5 Fees & Charges -852 Grant Income -2,132 Other Income -3 Gross Income -2,987 Investments Net Expenditure 2,553
Staff Establishment (FTE/staff) Headcount Housing Revenue 327.9 396 Neighbourhoods & Housing GF 115.5 135
Key dimensions Housing Revenue Account C23,500 dwellings Approaching 4,000 tenants on Universal Credit Neighbourhoods & Housing GF Supporting elected members community leadership roles.
Housing Revenue Account Integration with DWP (esp Universal Credit), private contractors and Council companies as well as Adult Social Care & CYPS (Children leaving care) Neighbourhoods & Housing GF Interface with Planning, Health and Adult Social Care
Significant Housing Revenue Account projects - Implementation of new housing management system database (HMS - Cladding programme to improve energy efficiency to non traditionally
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built council properties
- New build programme of c 600 new properties over 4 years Neighbourhoods & Housing (GF)
- New private sector housing enforcement policy (subject to Court Case mid January) - Area based regeneration - Frontage improvements to private sector properties
Significant Housing Revenue Account Risks - Impact of Universal Credit on income collection - IT failure (especially around newly acquired HMS) - Increasing costs of labour and materials for construction and maintenance - Government funding Neighbourhoods & Housing (GF) - Changes in the property market - National migration picture and any changes - Impact of Brexit on costs and population - Government funding supporting homelessness, asylum and refugee services in particular - Court case re private sector housing enforcement
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Service City Treasurer Directorate Finance & Assistant Andy Brown Transformation Director
Key • Accountancy and Financial Planning responsibilities • Finance Support / Assurance • Corporate Transformation • Revenues and Benefits (Client function) • Cash and Banking • Internal Audit and Risk • Control and Payments
Budget 20/21 £000’s Staff Costs 5,215 Budget Changes £000’s Other Expenditure 7,934 Savings -150 Gross Expenditure 13,149 Fees & charges -5 Fees & Charges -2,981 Grant Income -511 Other Income -1,118 Gross Income -4,610 Investments Net Expenditure 8,539 School Trading 100
Staff Establishment (FTE/staff) Headcount 132.39 142
Key dimensions • Net Revenue Budget £285M • Capital Programme 2019/20-- 2021/22 £384M • Corporate Project / Change Support • Group Statement of Accounts • External Bodies Statement of Accounts • Valued Added Tax
Significant • Worksmart Programme projects • Customer Enablement and Empowerment Programme • Annual Audit Programme – Covering whole of Council • Digital Transformation Programme • Significant changes to accounting for leases (IFRS 16)
Significant • Ability to recruit and retain required staff and skills base Risks • Managing age demographic of staff
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• Dependency on contractors to deliver part of the audit plan including specialist work.
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Service ICT Directorate Finance Assistant Mike Kenworthy Director
Key responsibilities To deliver digital technology which provides a safe and secure foundation for innovative, integrated public services that cross organisational boundaries and deliver to those in most need, while supporting business to promote growth.
• Development and delivery of ICT and Digital strategy. • Working with partners support and develop the digital aspirations of the city. • Provision of ICT hardware and Connectivity to the council. • To maintain the safe storage of all digital records and data. • To ensure the security and resilience. • Supporting and enabling council and partners delivering services. • Delivering Value for Money. • Providing technical support and know how. • Supporting and enabling change across the organisation. • Delivering service specific and cross cutting Digital and ICT projects. • Providing solutions based on an analysis of business needs. • Provision of Data Analytics and business intelligence. • Providing a pro-active and supportive ICT service
Budget 20/21 £000’s Staff Costs 3,556 Budget Changes £000’s Other Expenditure 3,969 Savings Gross Expenditure 7,525 Fees & Charges -2,184 Grant Income 0 Other Income -861 Gross Income -3,045 Investments Net Expenditure 4,480
Staff Establishment (FTE/staff) Headcount 84 87
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Key dimensions • 4500 users • 2500 laptops/ 2500 desktops • 800 smart phone/ 1300 standard mobiles • 76 (approx.) different sites • 400 servers • 300 business applications • 75 different live projects • 350,000 potentially malicious email identified and blocked. •
Significant • Migration to Cloud. projects • Wan Upgrade. • Hardware refresh and Win 10 upgrade. • BYOD and Infrastructure • Wi-Fi modernisation and expansion. • ‘Smart Cities’ program • O365 roll out. • HMS roll out • Customer Enablement Programme • Wilson Centre Redesign • BARTEC Domestic & Trade Waste • Health and Safety System • Patch Management system • WorkSmart • Social care debt management. • Corporate Dara warehouse and master data management.
Significant • Increased revenue Risks • Appropriate level of skill within ICT team • Pressure on resources (staff) • Data Loss • Malicious attacks • Major system failures
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Fees and Charges
City Health & Wellbeing
Percentage Proposed Charge 2020/21 Comments if not increasing by 3% Uplift
Trading Standards Section
Petroleum Enforcing Authority (PEA) Petroleum licence Band - Litreage Annual Fee A - up to 2500 1 Year £44 0% Statutorily Set 2 Years £88 0% Statutorily Set 3 Years £132 0% Statutorily Set 4 Years £176 0% Statutorily Set 5 Years £220 0% Statutorily Set 6 Years £264 0% Statutorily Set 7 Years £308 0% Statutorily Set 8 Years £352 0% Statutorily Set 9 Years £396 0% Statutorily Set 10 Years £440 0% Statutorily Set B - 2500 - 50000 1 Year £60 0% Statutorily Set 2 Years £120 0% Statutorily Set 3 Years £180 0% Statutorily Set 4 Years £240 0% Statutorily Set 5 Years £300 0% Statutorily Set 6 Years £360 0% Statutorily Set 7 Years £420 0% Statutorily Set 8 Years £480 0% Statutorily Set 9 Years £540 0% Statutorily Set 10 Years £600 0% Statutorily Set C - Over 50000 1 Year £125 0% Statutorily Set 2 Years £250 0% Statutorily Set 3 Years £375 0% Statutorily Set 4 Years £500 0% Statutorily Set 5 Years £625 0% Statutorily Set 6 Years £750 0% Statutorily Set 7 Years £875 0% Statutorily Set 8 Years £1,000 0% Statutorily Set 9 Years £1,125 0% Statutorily Set 10 Years £1,250 0% Statutorily Set
Manufacture and Storage of Explosives Regulations 2005 Licence to store explosives where, by virtue of regulation 27 of, and schedule 5 to, the 2014 (These are the fees for HT4 fireworks, where the quantity stored is greater than 250kg NEQ) 1 Year £185 0% Statutorily Set 2 Years £243 0% Statutorily Set 3 Years £304 0% Statutorily Set 4 Years £374 0% Statutorily Set 5 Years £423 0% Statutorily Set Renewal of licence to store explosives where a minimum separation distance of greater than 0 metres is prescribed.
(These are the renewal fees for HT4 fireworks, where the quantity stored is greater than 250kg NEQ) 1 Year £86 0% Statutorily Set 2 Years £147 0% Statutorily Set 3 Years £206 0% Statutorily Set 4 Years £266 0% Statutorily Set 5 Years £326 0% Statutorily Set Licence to store explosives where no minimum separation distance or a 0 (These are the fees for HT4 fireworks, where the quantity stored is less than 250kg NEQ) 1 Year £109 0% Statutorily Set 2 Years £141 0% Statutorily Set 3 Years £173 0% Statutorily Set 4 Years £206 0% Statutorily Set 5 Years £238 0% Statutorily Set Renewal of licence to store explosives where no minimum separation (These are the renewal fees for HT4 fireworks, where the quantity stored is less than 250kg NEQ) 1 Year £54 0% Statutorily Set 2 Years £86 0% Statutorily Set 3 Years £120 0% Statutorily Set 4 Years £152 0% Statutorily Set 5 Years £185 0% Statutorily Set
Licence Variation Varying the name of licensee or address of site £36 0% Statutorily Set Any other kind of variation "Reasonable cost" 0% Statutorily Set Transfer of licence £36 0% Statutorily Set £36 0% Statutorily Set
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SPECIAL WEIGHING AND MEASURING EQUIPMENT
Subsequent WEIGHING MACHINE Single Machine Machine
Machines exceeding 1 tonne to 10 tonne £183.55 £146.86 3% Machines exceeding 10 tonnes £382.43 £305.96 3%
(ii) Where no calibrated weights are provided by the customer
Machines not exceeding 30kg £32.80 £25.70 3% Machines exceeding 30kg to 100kg £68.87 £54.39 3% Machines exceeding 100kg to 300kg £99.41 £79.60 3% Machines exceeding 300kg to 1 tonne £169.75 £135.82 3% Machines exceeding 1 tonne to 10 tonne £275.37 £220.32 3% Machines exceeding 10 tonnes £578.25 £458.49 3%
Machine of the same approval No *Submitted at the same time
MEASURING INSTRUMENTS FOR LIQUID FUEL AND LUBRICANTS
Container type (unsubdivided) £78.64 3%
Single/multi-outlets (nozzles) (a) First nozzle tested £128.30 3% (b) Each additional nozzle tested £78.82 3%
Testing of peripheral electronic equipment on a separate visit (per site/per £86.56 3%
Testing of credit card acceptor (per unit, per hour regardless of £86.56 3% number of slots/nozzles/pumps)
ROAD TANKER FUEL MEASURING EQUIPMENT (ABOVE 100 LITRES)
1. Meter measuring systems (where the customer provides a calibrated traceable master meter charging will be based solely on the hourly rate of £59.90) otherwise charges are as follows: (a) Wet hose with two testing liquids £275.37 3% (b) Wet hose with three testing liquids £321.26 3% (c) Dry hose with two testing liquids £305.93 3% (d) Dry hose with three testing liquids £352.00 3% (e) Wet/dry hose with two testing liquids £428.38 3% (f) Wet/dry hose with three testing liquids £458.94 3%
2. Dipstick measuring systems (a) Up to 7,600 litres (for calibration of each compartment and production of chart) (N.B.: for any compartment over 7,600 litres, basic fee plus additional costs at the rate of £67.57 per extra £187.37 3% officer/hour) (b) Initial dipstick £21.66 3% (c) Spare dipstick £21.66 3% (d) Replacement dipstick (including examination of compartment) £47.62 3%
CERTIFICATE OF ERRORS
For supplying a certificate containing results of errors found on testing (Certificate supplied upon £43.60 3% request of the submitter; fee applies when no other fees are payable)
Environmental Regulation Section
Pest Control Work Domestic Premises (All prices Inclusive of VAT unless otherwise stated) Mouse Control £62.59 3% Rat Control Free Bedbugs £84.87 3% Cockroaches £84.87 3% All other Insect Treatment (per treatment) £55.17 3% [Flea treatment (re-spray)] £27.58 3% Wasp Nest – ground level £55.17 3% Wasp Nest – 2 men (high level) £66.84 3% Squirrel / Bird trapping £40.00 to establish trap + £42.44 + £5.30 3% £5.00 per visit thereafter. Test Baiting £13.79 3% Missed Appointment £13.79 3%
Proofing
Weep hole inserts (fitted) £6.36 3% Commercial Premises (All prices Inclusive of VAT unless otherwise stated) Wasp Nest – ground level £60.10 3% Wasp Nest – 2 men (high level) £71.03 3% All other work is based on labour charge of £52.53 per hour £55.73 3% plus materials, plus other, plus VAT.
Drainage Works
(All prices Inclusive of VAT unless otherwise stated) Tenfoot Gully Clearance Free Drain Clearance Free
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Drain Tests / Investigations (smoke test, CCTV, dye tests, etc.)
Smoke Test for Rat investigation in privately Free Owned domestic property Free
All other work / premises £110.33 3% Service of Notice (admin charge) £22.28 3%
Animal Welfare
(All prices VAT Exempt unless otherwise stated) Licenses Pet Shops (annual) (1 year license) £135.50 3% Pet Shops (annual) (2 year license) £201.57 3% Pet Shops (annual) (3 year license) £249.31 3% Home Boarding (annual) (1 year license) £59.01 3% Home Boarding (annual) (2 year license) £86.99 3% Home Boarding (annual) (3 year license) £108.21 3% Kennel Boarding Establishments (annual) (1 year License) £142.06 3%
Kennel Boarding Establishments (annual) (2 year License) £212.18 3%
Kennel Boarding Establishments (annual) (3 year License) £265.23 3% Dog Breeding Establishments (annual) (1year license) £170.47 3% Dog Breeding Establishments (annual) (2year license) £254.62 3% Dog Breeding Establishments (annual) (3year license) £318.27 3% Day Care Establishments (annual) (1 year license) £142.06 3% Day Care Establishments (annual) (2 year license) £212.18 3% Day Care Establishments (annual) (3 year license) £265.23 3% Variation of license (all categories) £53.05 3%
Stray Dogs
(a) First Offence £41.12 + £6.18 3% [charge reduced to fixed fee of £38.00 if dog collected within 24 hours) (b) Second Offence £62.83 + £6.18 3%
Subsidised neutering available by arrangement with the dog wardens. Micro-chipping available at events organised by the dog wardens at a cost of £9.00 per dog. £9.27 3%
Default Works (Board Up’s. Alarms, Clearouts)
KWL (Net Price) £13 Admin Charge £14 3% Officer Time (See Below) Vat added on to total cost
Officers Time for Default Works Office Hours - 2 Hours @ £17.00 per hour (Total Cost £34.00) £36.07 3% Out Of Hours - 2 Hours @ £21.00 per hour (Total Cost £44.56 3% £42.00)
Contaminated Land Search Letter £62 3% Search Report £136 3%
Permitted Activities LAPPC (Part B) Charges Application Fee - Standard Process (including Solvent £1,650 Statutorily Set Emissions Activities) Application Fee - Additional fee for operating without a permit £1,188 Statutorily Set Application Fee - PVRI, and Dry Cleaners £155 Statutorily Set Application Fee - PVR I & Ii combined £257 Statutorily Set Application Fee - VRs and other Reduced Fee Activities £362 Statutorily Set Application Fee - Reduced fee activities: Additional fee for £71 Statutorily Set operating without a permit Application Fee - Mobile plant** £1,650 Statutorily Set Application Fee - for the third to seventh applications £985 Statutorily Set Application Fee - for the eighth and subsequent applications £498 Statutorily Set
Annual subsistence charge - Standard process Low £772.00 (+£104) Statutorily Set
Annual subsistence charge - Standard process Medium £1161 (+£156) Statutorily Set
Annual subsistence charge - Standard process High £1747 (+£207) Statutorily Set
Annual subsistence charge - PVRI, and Dry Cleaners L/M/H £79/£158/£237 Statutorily Set
Annual subsistence charge - PVR I & II combined L/M/H £113/£226/£341 Statutorily Set
Annual subsistence charge - VRs and other Reduced Fees £228/£365/£548 Statutorily Set Annual subsistence charge - Mobile plant, for first and second £626/£1034/£1551 Statutorily Set permits L/M/H** Annual subsistence charge - Late payment fee £52 Statutorily Set Transfer and Surrender - Standard process transfer £169 Statutorily Set Transfer and Surrender - Standard process partial transfer £497 Statutorily Set
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Transfer and Surrender - Reduced fee activities: partial transfer £47 Statutorily Set Temporary transfer for mobile plant - First transfer £53 Statutorily Set Temporary transfer for mobile plant - Repeat following £53 Statutorily Set enforcement or warning Substantial change - Standard process £1,060 Statutorily Set Substantial change - Standard process where the substantial £1,650 Statutorily Set charge results in a new PPC activity Reduced fee activities £102 Statutorily Set
**Not using simplified permits
LA-IPPC (Part A2) Charges Application £3,363 Statutorily Set Additional fee for operating without a permit £1,188 Statutorily Set Annual Subsistence LOW £1,447 Statutorily Set Annual Subsistence MEDIUM £1,611 Statutorily Set Annual Subsistence HIGH £2,334 Statutorily Set Late payment fee £52 Statutorily Set Variation £1,368 Statutorily Set Substantial variation (where 9 (2) (a) or 9 (2) (b) of the scheme £3,363 Statutorily Set applies Transfer £235 Statutorily Set Partial Transfer £698 Statutorily Set Surrender £698 Statutorily Set
Food Export Certificates £150 20% Food Premises Rescore Inspection £160 New Health and Safety Registration Acupuncture £265 4% Tattooing/Semi-Permanent Skin Colouring £265 4% Body/Ear Piercing £265 4% Electrolysis £265 4%
Licensing Taxi licensing Vehicles Hackney carriage / private hire vehicle - grant * £160 Vehicle licence issued during last three months of licence year * £112 Hackney carriage / private hire vehicle - renewal * £142 Application to replace hackney carriage / private hire vehicle * £59
Change of ownership of hackney carriage / private hire vehicle £36 Replacement identification plate £24 Replacement Be Safe stickers (pair) £12 Replacement internal door sticker £3 Replacement internal pouch £3
* The MOT fee is payable at the test centre on the day of the vehicle examination All Taxi fees and charges are ringfenced by law. There is a Drivers separate review of fees and charges Hackney carriage / private hire driver's licence - grant ^ £88 being undertaken and these are set Driver's licence issued during the last three months of the licensing year ^ £62 on a 3 yearly cycle Hackney carriage / private hire driver's licence - renewal £62 Additional driver's badge £34 Disclosure and Barring Service disclosure £44 Digital badge photographs £5
^ This fee does not include the DBS check or the driving assessment test in respect of grant applications. The driving assessment fee is payable at the test centre on the day of the test. Operators Licence to operate 1 vehicle £69 Vehicle renewal £69 Cost of each additional vehicle (applies to premises only) £12
Operators licence (last three months of the licensing year) £35 Cost of each additional vehicle (last three months of the licensing year) £6
Miscellaneous items Copies of by-laws Street trading Please be aware there is a £25.50 administration fee per application. The Commodity Hot food (day/night) Other commodities
Limited period street trading consent (per day or part day) The Street Trading and Pavement Fetes, carnivals or similar community based events where the trader is an Café Licensing Functions were integral part of the event and is trading with the permission of the organisers transferred to Planning from 1st of the event September 2019 Consents must be renewed on an annual basis on or before 31 March. Pavement cafe licence fees Applications are subject to a non refundable fee of £30. However, should an application be successful, this will be deducted from the first annual fee. Licences must be renewed on annual basis. Reminders will be sent out prior to the renewal date. However they are not guaranteed. Miscellaneous licences Miscellaneous Sex establishment application fee £2,160 3% Sex establishment grant £2,160 3% Sex establishment renewal or transfer fee £2,160 3% Sexual entertainment venue application fee £2,160 3% Sexual entertainment venue grant £2,160 3% Sexual entertainment venue renewal or transfer fee £2,160 3% Riding establishments ** £130 3% Dangerous wild animals ** £90 3% ** These fees cover administration costs only - inspection fees charged by the veterinary surgeon will be recovered as the second part of the fee payable by the licensee.
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Motor salvage operator/scrap metal dealer's
Motor salvage/scrap metal Grant application (site) £320 3% Grant application (collector) £212 3% Renewal (site) £320 3% Renewal (collector) £212 3% Variation (site to collector) £130 3% Variation (collector to site) £170 3% Variation (change of site) £170 3% Variation (change of site manager) £85 3% General administration charge (copy licence, change of details, £32 3% etc)
Licensing Act 2003 Premises licences and club premises certificates Fees relating to applications for premises licences, club premises certificates, variations, the Premises and club application and annual fees - each premise that is licensable will be allocated to Premises license application and annual fees BAND A Non-domestic rateable value £0 - £4,300 Application fee £100 Variation fee £100 Minor variation £89 Annual charge £70
BAND B Non-domestic rateable value £4,301 - £33,000 Application fee £190 Variation fee £190 Minor variation £89 Annual charge £180 BAND C Non-domestic rateable value £33,001 - £87,000 Application fee £315 Variation fee £315 Minor variation £89 Annual charge £295 BAND D Non-domestic rateable value £87,001 - £125,000 Application fee £450 Variation fee £450 Minor variation £89 Annual charge £320 BAND E Non-domestic rateable value £125,000 and over Application fee £635 Variation fee £635 Minor variation £89 Annual charge £350 Miscellaneous Licensing Act 2003 fees Other Licensing Act 2003 fees Fees Personal licence Renewal of personal licence £37 Minor Variation of a premises licence £89 Notification of interest in premises £21 Temporary event notice £21 Theft, loss, etc of premises licence or summary £11 Application for a provisional statement £315 Notification of change of name or address £11 Application to vary licence to specify individual as DPS £23 Application for transfer of premises licence £23 Interim authority notice following death etc of licence holder £23
Notification of change of name or alteration of rules of club £11 Theft, loss, etc of personal licence £11 Change of relevant registered address of club £11 Theft, loss, etc of temporary event notice £11 Duty to notify change of name or address £11
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Large events Exceptionally large events may give rise to exceptional problems. Such events might include major festivals and other events, which often involve the building of The additional charges should be calculated as shown below.
Number in attendance at any one time Additional fee Annual charge 5,000 - 9,999 £1,000 £500 All Licensing Act and Gambling fees 10,000 - 14,999 £2,000 £1,000 are statutorily Set 15,000 - 19,999 £4,000 £2,000 20,000 - 29,999 £8,000 £4,000 30,000 - 39,999 £16,000 £8,000 40,000 - 49,999 £24,000 £12,000 50,000 - 59,999 £32,000 £16,000 60,000 - 69,999 £40,000 £20,000 70,000 - 79,999 £48,000 £24,000 80,000 - 89,999 £56,000 £28,000 90,000 and over £64,000 £32,000 Gambling Act 2005 Gambling licences - part I Application type
Transitional fast track Transitional non- fast track New application application application
Premises type Existing casinos 300 £2,000 N/A New small casino N/A N/A £8,000 New large casino N/A N/A £10,000 Regional casino N/A N/A £15,000 Bingo club 300 £1,750 £3,500 Betting premises (excluding tracks) 300 £1,500 £3,000 Tracks 300 £1,250 £2,500 Family entertainment centres 300 £1,000 £2,000 Adult gaming centre 300 £1,000 £2,000 Gambling Act 2005 Gambling licences - part II Application type Licence application Application for re- Application for provisional (provisional instatement statement statement holders Premises type Existing casinos 1350 N/A N/A New small casino 1800 £8,000 £3,000 New large casino 2150 £10,000 £5,000 Regional casino 6500 £15,000 £8,000 Bingo club 1200 £3,500 £1,200 Betting premises (excluding tracks) 1200 £3,000 £1,200 Tracks 950 £2,500 £950 Family entertainment centres 950 £2,000 £950 Adult gaming centre 1200 £2,000 £1,200
Permit type Application fee Annual fee Renewal fee FEC Gaming machine 300 N/A £300 Prize gaming 300 N/A £300 Alcohol licensed premises - notification of two or less machines 50 N/A N/A Alcohol licensed premises - gaming machine permit - more than two 150 £50 N/A Club gaming permit 200 £100 N/A Club gaming machine permit 200 £50 £200 Club fast track for gaming permit or gaming machine permit 100 £50 £100 Small society lottery registration 40 £20 N/A
Permit type Change of name Copy of permit Variation FEC Gaming machine 25 £15 N/A Prize gaming 25 £15 N/A Alcohol licensed premises - notification of two or less machines N/A N/A N/A Alcohol licensed premises - gaming machine permit - more than two 25 £15 £100 Club gaming permit 100 N/A Club gaming machine permit N/A £15 £100 Club fast track for gaming permit or gaming machine permit N/A N/A N/A Small society lottery registration N/A N/A N/A
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City Adults Social Care Percentage Proposed Charge 2020/21 Comments if not increasing by 3% Uplift Homecare Services
Community Support Team (Reablement) – charge to other organisations - Day Time £28.70 3.24% Community Support Team (Reablement) – charge to other organisations - Night Time £38.20 3.24%
Meals
Day Service users £3.70 5.71% Day Services – refreshments (per day) £0.85 6.25% Staff – main meal £3.70 5.71% Staff – breakfast £1.70 6.25% Staff – tea/snack £1.05 5.00% Staff – evening meal £1.70 6.25%
Day Services
Half-day £30.00 3.09% Full day £60.00 3.09%
Transport Services
Charge per journey – Hull clients £6.00 33.33% Charge to other organisations £20.00 11.11%
Social Worker Assesments (where our social workers £330.00 3.13% undertake an assesment for another Local Authority).
In-house residential · Park View - £1,737.78 £1,855.00 3.02% · Pennine - £1,283.80 £1,370.00 2.99% · Pennine 1:1 - £14.50 p/h £22.50 2.97% · Preston Road High Dependency Unit - £1933.29 £2,065.00 3.08%
Shared Lives - Rent and household charges (payable by client)
Household Charges -100.00% Dependant on national housing Rent (1 bedroom LHA rate) -100.00% benefit changes. This is charged to Total rent & household charges -100.00% the cared for person but is payable
City Economic Development & Regeneration
Percentage Proposed Charge 2020/21 Comments if not increasing by 3% Uplift Schedule of charges for Pre-Application meetings with the Planning Committee February 2011
Planning Fees (Pre-application Charges)
1. Schemes up to and including 10 dwellings, or site area of 0.5 ha (1.25 acres), or floor space of £370
2. Schemes between 11 dwellings and 50 dwellings, or site areas of between 0.51 and 5ha, or floor £740 3. Schemes over the above criteria: £1,230 Where the Committee has specifically requested a subsequent
4. Householders: householder schemes for extensions or alterations to £60
Actual planning fees are set by Government These fees are set by the Planning Committee and reviewed on an Building Control annual basis (usually Februiary) for Small Domestic Building Work For Existing Dwellings the increase to occur in the April of that year. It is not appropriate for Application Type corporate finance to therefore Building involve themselves with the setting Regularis Type of Work Plan Fee Inspection Fee Notice of local fees without that support ation Fee Fee from planning committee. Fees Detached and Attached Garages Under 60m² £ 125.00 £ 145.00 £ 270.00 £ 369.00 have increassed by 23% in year and Garage Extensions under 60m² pre-applications have reduced so Conversion of Garage into Habitable Room £ 234.17 -£ 234.17 £ 331.00 done as an action to manage the Single Storey Extensions up to 4m2 current income target. The Building Control fees were also increased by Single Storey Extensions Over 4 and under 60m² £ 125.00 £ 280.00 £ 405.00 £ 521.00 8% in October 2019 and will Two Storey Extensions under 60m2 £ 125.00 £ 347.50 £ 472.50 £ 617.00 increase by a further 8% in October Loft Conversion £ 125.00 £ 286.67 £ 411.67 £ 535.00 2020. Loft Conversion with Dormer Re-roof N/A N/A£ 87.50 £ 140.00 Underpinning £ 125.00 £ 182.50 £ 307.50 £ 410.00 Renovation of Thermal Element £ 87.50 -£ 87.50 £ 140.00 Window Replacement per dwelling £ 87.50 -£ 87.50 £ 140.00 Electrical Installations £ 150.00 -£ 150.00 £ 225.00 Internal/ External Alterations Under £2000 £ 157.50 -£ 157.50 £ 224.00 Internal/ External Alterations £2001 - £5000 £ 226.67 -£ 226.67 £ 322.00 Internal/ External Alterations £5001 - 25000 £ 125.00 £ 165.83 £ 290.83 £ 400.00
Invoiced by With With When payment is due With Form HBC after start Form Form of work on site
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City Customer Services Percentage Proposed Charge 2020/21 Comments if not increasing by 3% Uplift Cemeteries & Crematoria Cemetery Fees and Charges Exclusive right of burial in earthen grave by Deed of Grant Price is for each Year right is taken, with a minimum purchase of 10 years £31.00 3.30% it is possible to purchase rights for a the maximum of 100 years, for which the appropriate fee will be charged (interment fee or permit fee for headstone not included). Provide duplicate deed at time of interment £26.00 4.00% Transfer ownership of rights or provide duplicate any other time. £88.00 3.50% Interment Fees Interment Fee in Full adult grave for funerals Monday to Friday £1,020 3.03% Additional Excavation fee. £150 3.40% Interment of Cremated Remains Exclusive Right of Burial in earthen grave for cremated remains Price is for each Year right is £31.00 3.30% taken, with a minimum purchase of 10 years Interment fee for Monday to Friday Appointments £278 3.00% Interment fee for a Saturday Appointment Interment fee for interments for a Sunday or Bank Holiday Appointment a period of 30 years by Deed of Grant Muslim Burials Exclusive right of burial in earthen grave in the Muslim Section of Eastern Cemetery £875.00 2.94% rounding down to the nearest pound Interment fee includes wood shoring £1,150 3.10% NATURAL BURIALS - PRIORY WOODS CEMETERY Exclusive rights of burial (no memorial rights) - PER ANNUM Price is for each Year right is taken, £31.00 3.30% to encourage natural burials by not increasing the difference between a Interment Fee (grave single interment only - cremated remains can be interred after full burial) £ 1,110.00 2.80% natural burial and a normal burial by too much Already reached its maximum price Woodland Bulb planting on grave (one off planting only) to be done by cemetery staff only. £ 95.00 0 threshold Interment of cremated remains (biodegradable urn only - Monday to Friday appointment) £278 3.00% Cremated Remains Graves - Daffodil Island - Priory Woods Exclusive rights of burial (no memorial rights) - PER ANNUM Already reached its maximum price Price is for each Year right is taken, with a minimum purchase of 10 years £ 25.00 0.00% threshold it is possible to purchase rights for a the maximum of 100 years, for which the appropriate fee will be charged (interment fee or permit fee for headstone IS not included). Interment of Cremated remains Monday to Friday Appointment £278 3.00% Babies Cemetery - Northern Cemetery & Eastern Cemetery exclusive rights of burial are not graves in baby cemetery Interment of child up to one year old in the reserved section of the cemetery
Interment fee for cremated remains in baby cemetery OTHER CEMETERY FEES Additional charge for Saturday funeral - burial Additional charge for Sunday funeral - burial Eastern Cemetery - use of chapel Monday to Friday £ 120.00 4.30% Eastern Cemetery - use of chapel Saturday Eastern Cemetery - use of chapel Sunday NO CHAPEL FEE WILL BE CHARGED FOR FUNERALS FOR ANY CHILD UP TO AND INCLUDING TWELVE YEARS OLD Permit Charges Permit charge for erection of a memorial/headstone 18" and over £ 139.00 3.00% rounded down to nearest £ Permit charge for a re-inscription of a memorial £ 139.00 3.00% rounded down to nearest £ Permit charge for erection of a memorial/headstone under 18". it is not possible to erect a headstone without production of the exclusive right of burial (deed) Right to place a memorial on a grave within a baby cemetery - under 18" Permit charge for installation of an approved grave kerb set - £72 2.86% rounded down to nearest £ HEADSTONE STABILITY Stabilise and re-fix memorial (up to 3ft in height), including installation of new sub base £ 180 2.90% rounded down to nearest £ FAMILY HISTORY/BURIAL REGISTER SEARCHES. Per name search with certificate Monday to Friday - appointment with officer to view a grave Saturday appointment with officer to view a grave (pending staff availability) Sunday and Bank Holiday appointment with officer to view a grave (pending staff availability) Please note it is possible to make an appointment to view the burial registers that are based at the Chanterlands Crematorium A brief introduction of 15 minutes will be provided - however, should you require assistance of a designated officer to assist with the lifting of the ledgers and searching of information - a fee is applicable and payable in advance Assistance to view the registers, inc advice and guidance - per hour - pre booked appointment only Cremation Fees and Charges Cremation of person over 12 years - full service/committal £ 799 5.10% Cremation of a child up to one year old
Cremation of child, 1-5 years.
Cremation of child, 6-12 years. Cremation without chapel service (delivery only) £ 620 1.60% to remain competative Contract funeral with HYMS £ 620 1.60% to remain competative no increase due to falling demand Early Morning Delivery £ 500 0.00% and increased competition NHS Trust - disposal of slides and blocks in accordance with £ 85 3.70% legislation includes maximum contract - 24socs.
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Individual Cremation in accordance with the Human Tissue Act £ 85 3.70% 2004 Medical referee, as per cremation regulations 2008 to meet £ 62 3.30% with applicant, this may increase if more then 1 hour is taken. Use of small or large chapel for extended service time (per no increase to encourage this to be £ 155 0.00% each extra time taken) Monday to Friday utilised Use of small or large chapel for memorial service with £ 215 4% burial/cremation elsewhere - Monday to Friday Use of small or large chapel for a memorial service or for funeral service followed by burial at priory, western or northern £ 125 8.70% cemeteries Monday to Friday Use of small or large chapel for extended service time (per each extra time taken) Saturday Use of small or large chapel for a memorial service or for funeral service followed by burial at priory, western or northern cemeteries on a Saturday Use of small or large chapel for extended service time (per each extra time taken) Sunday Use of small or large chapel for a memorial service or for funeral service followed by burial at priory, western or northern cemeteries on a Sunday Storage of cremated remains, per month Additional charge for Saturday funeral - cremation Additional charge for Sunday funeral - cremation Scattering, Monday to Friday following cremation at a crematorium other than at Hull Crematorium, Chanterlands £ 72 2.80% rounded down to nearest £ Avenue. Additional fee for a Scattering Appointment on a Saturday - Additional fee for a Scattering Appointment on a Sunday and Bank Holiday - Provision of cremation certificate where original has been £ 25 0.00% cannot justify a greater fee lost/misplaced Delivery of Cremated Remains to Applicant - Hull boundary £ 30 20.00% only Monday to Friday - dependant on staff availability, pre payment and advance arrangements only for addresses within the suburbs of Hull and Beverley, an additional fee of £2 per mile will be applicable Urns and Containers Polycontainer Baby urn Wooden casket £ 37 0.00% poor demand Daisy Biodegradable Urns inc cotton bag. £ 37 0.00% poor demand Exhumation of cremated remains. £ 112 3.70% Transfer of ashes into own container provided in advance £5 0 cannot justify a greater fee following cremation or at any other time COMMEMORATIVE MEMORIALS LAVENDER WALK (northern cemetery) New 10 year lease of vault including red or black granite plaque up to 80 letters and interment of cremated remains, Monday to Friday, & 1st posy vase. £ 880.00 Additional Fee for a Saturday Appointment Additional Fee for a Sunday or Bank Holiday Appointment
Cameo Photo arranged and fixed to plaque (4cm x 3cm). £ 125
Cameo Photo arranged and fixed to plaque (7cm x 5cm). £ 145 Replacement/new red or black granite plaque. £ 250.00 Re-painting of current plaque. £ 65 Renewal of 10 year lease. £ 465.00 Additional letters. £ 4 please note there is no fee for the removal of remains, although an exhumation licence is required MILLENNIUM WALK (northern Cemetery) New 10 year lease of granite vault and black granite plaque & lettering (80 letters) interment, Monday to Friday appointment and 1st posy vase. £ 922.00 Additional Fee for a Saturday Appointment Additional Fee for a Sunday or Bank Holiday Appointment
Cameo Photo arranged and fixed to plaque (4cm x 3cm). £ 125
Cameo Photo arranged and fixed to plaque (7cm x 5cm). £ 145
Heart shaped cameo photo, arranged and fixed to plaque £ 190 Replacement of black granite plaque (excluding photograph) up to 80 letters. £ 375 Renewal of 10 year lease £ 480.00 Additional letters. £ 4 NORTHERN CEMETERY COLUMBARIUM VAULTS/NICHES New lease niche, to include a 10 year lease and white marble £ 795.00 plaque, 1st interment inc. New lease of niche, to include 10 year lease and black granite £ 795.00 plaque, gold letters, 1st interment please note above fee is for fixings carried out Monday- Thursday 10am, 12noon or 2pm and Friday 10am. attended, fixing of plaque Saturday attended, fixing of plaque Sunday Renewal of 10 year lease £ 450.00 White marble plaque with lettering up to 60 letters (exc lease fee) £ 355.00 (fixing included). Black marble plaque with lettering up to 60 letters(exc lease fee) £ 355.00 (fixing included). Fixing of plaque - unattended £ 59 Removal of cremated remains and plaque at the service's discretion, no family present Removal of cremated remains and plaque family present £ 65 Monday to Friday Appointment Removal of cremated remains and plaque family present Saturday Appointment
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Removal of cremated remains, plaque family present Sunday or Bank Holiday Appointment Extra lettering (per letter) £ 4
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NORTHERN COLUMBARIUM - WALL PLAQUES ONLY (NO VAULT BEHIND) Purchase of new white marble plaque to include ten year lease (including fixing, and maximum of 60 letters). £ 545.00 Purchase of white plaque only (exc. fixing & lease, max of 60 £ 280.00 letters). Purchase of black plaque to include 10 year lease (including fixing). £ 545.00 Purchase of black plaque only(exc. fixing & lease - max 60 letters). £ 280.00 Renewal of 10 year lease £ 260.00 Removal of plaque at the service's discretion, no family present please note above fee is for fixings carried out Monday- Thursday 10am, 12noon or 2pm and Friday 10am. attended, fixing of plaque Saturday attended, fixing of plaque Sunday BABY CEMETERY PLAQUES - Northern Cemetery Purchase of black plaque for babies cemetery on a 10 year £ 270.00 lease Renewal of 10 year lease £ 165.00 EASTERN CEMETERY SANCTUM 2000 ABOVE GROUND VAULT New 10 year lease of granite vault and black granite plaque & lettering (80 letters) 1st interment and 1st posy vase.(exc photo & motif) £ 922.00 Interment of cremated remains at tree Monday to Friday Appointments Interment fee for a Saturday Appointment Interment fee for interments for a Sunday or Bank Holiday Appointment Decorative motifs/floral tribute on plaque Cameo Photo arranged and fixed to plaque (4cm x 3cm). £ 125
Cameo Photo arranged and fixed to plaque (7cm x 5cm). £ 145
Heart shaped cameo photo, arranged and fixed to plaque £ 190
Replacement of black granite plaque (excluding photograph) up to 80 letters. £ 375 Renewal of 10 year lease £ 500 Additional letters. £ 4 Repainting of current plaque. (depends of characters and motifs) Hedon Road Columbarium Renewal of 10 year lease £ 345.00 New white plaque with lettering up to 60 letters (including fixing). £ 355.00 New black plaque with lettering up to 60 letters (including fixing). £ 355.00 please note above fee is for fixings carried out Monday- Thursday 10am, 12noon or 2pm and Friday 10am. attended, fixing of plaque Saturday attended, fixing of plaque Sunday Removal of cremated remains and plaque at the service's discretion, no family present Removal of cremated remains and plaque family present Monday to Friday £ 65 Fixing of plaque - unattended £ 59 MEMORIAL STANDARD ROSE TREES (ALL LOCATIONS) Purchase of new rose tree with 10 year lease £ 650 excluding plaque. Renewal of 10 year lease fee £ 480 Interment of cremated remains at a memorial rose tree Monday £ 270 to Friday Appointment Interment fee for a Saturday Appointment Interment fee for interments for a Sunday or Bank Holiday Appointment MEMORIAL TREE (please note there are no trees available for new lease) Renewal of 10 year lease £ 450.00 Interment of cremated remains at tree Monday to Friday Appointments £ 270 Interment fee for a Saturday Appointment Interment fee for interments for a Sunday or Bank Holiday Appointment please note due to mature tree roots an interment may not be possible. OCTAGONAL PLANTER - Eastern Cemetery and Chanterlands Crematorium Purchase of 10 year lease and 12" x 3" plaque £ 420 Renewal of 10 year lease £ 270 New plaque £ 160 HEXAGONAL BENCH - Chanterlands crematorium and priory woods cemetery Commemorative seat with plaque and 10 year lease £ 880.00 Renewal of 10 year lease £ 430.00 New/additional plaque for bench (8x3) £ 150.00 VASE BLOCK TABLET Memorial vase block tablet with inscribed black or red tablet and 10 year lease, and first posy vase £ 555.00 Renewal of 10 year lease £ 355.00 New black or red plaque £ 210 Repainting of plaque. £ 59 MEMORIAL OCTAGONAL TOWER SANCTUM UNIT Memorial Vault - new £ 975.00 the initial fee includes 10 year lease, single posy vase, plaque and lettering on plaque up to 80 letters. Additional letters and motifs can be quoted for. No fee is applicable for the first or subsequent interments or removal of cremated remains that are in the vault Monday to Friday - Interment or Removal for attended Saturday Appointment Interment or Removal for attended Sunday or Bank Holiday Appointment Renewal of 10 year lease £ 475.00 Replacement/new plaque inc up to 80 letters £ 395.00 additional brass flower vase £ 57.00 Cameo Photo arranged and fixed to plaque (4cm x 3cm). £ 125
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Cameo Photo arranged and fixed to plaque (7cm x 5cm). £ 145
Heart shaped cameo photo, arranged and fixed to plaque £ 190
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MEMORIAL SANCTUM - CURVED 18 Memorial Vault - new £ 910.00 the initial fee includes 10 year lease, plaque & lettering up to and including 80 letters & single posy vase. Additional letters and motifs can be quoted for. No fee is applicable for the first or subsequent interments or removal of cremated remains that are interred in the vault Monday to Friday Interment or Removal for attended Saturday Appointment Interment or Removal for attended Sunday or Bank Holiday Appointment Renewal of 10 year lease £ 480 additional brass flower vase £ 57.00 Cameo Photo arranged and fixed to plaque (4cm x 3cm). £ 125
Cameo Photo arranged and fixed to plaque (7cm x 5cm). £ 145
Heart shaped cameo photo, arranged and fixed to plaque £ 190 Replacement/new plaque inc up to 80 letters £ 400.00 16 WALL TABLET UNIT Memorial plaque, inc 5 year lease and lettering on plaque £ 315.00 (does not include motif, additional costs and designs are available on request.) Lease renewal £ 190.00 New/replacement plaque £ 155 COMMEMORATIVE MEMORIAL CHAIRS Chanterlands Crematorium Only chairs will be placed in the chapel of your choice - dependant on availability the price includes a small plaque which has space for name only No increase in Commemorative there is no lease fee applicable Memorials due to them not selling. further terms and conditions are available from the admin team MEMORIAL WOODEN BENCH (where space available Crematorium, Eastern, Hedon Road, Western and Northern Only) Purchase of memorial wooden bench with memorial for a £ 1,300.00 lease period of 10 years, where if available, a suitable site exists, does not include installation of pavers. (Fee does not include maintenance of bench or carving of dedication) Inscription carved on the front panel of the bench - per letter £ 4 Installation of 3 Pavers for wooden bench £ 125 Installation of 6 Pavers for wooden bench £ 165 Installation of 6 Pavers for granite bench £ 190 Renewal of 10 year lease - please note this does not include £ 460.00 maintenance of the bench. New/Additional memorial plate for bench (8x3) £ 155 Please note we are not able to offer a refurbishment package for wooden memorial benches MEMORIAL WOODEN BENCHES - PRIORY WOODS A commemorative oak seat can be purchased and sited within the Priory Woods Cemetery. Areas have been identified, where families can choose to locate the seat. A commemorative inscription plaque can be placed on the bench, for a personal dedication to be recorded. The oak seats have been chosen to compliment the semi-rural setting of the cemetery. To obtain further details, please contact the team on 614976 or 614975 the benches are natural and do not require maintenance or treatment, and staining is not permitted no pavers are permitted for these type benches. Renewal of 10 year lease £ 470.00 Granite Benches - purchase of bench, but lease of area bench to be located. please note, that benches are only permitted where suitable sites exist - these are agreed with the bereavement services team upon appointment and site meeting. MEMORIAL VAULTED GRANITE BENCHES Single vault lease, including lettering of plaque and 10 year lease £ 1,010.00 Full bench lease, including lettering of both plaques and 10 yr lease £ 2,160.00 renewal of 10 year lease for single vault £ 450.00 renewal of 10 year lease for bench £ 890.00 new/replacement plaque inc lettering. £ 360 motifs and pictures can be placed on the plaques, designs and prices on request. No fee is applicable for interments or removals from the vaults for Monday to Friday Appointments Interment or Removal for attended Saturday Appointment Interment or Removal for attended Sunday or Bank Holiday Appointment please note should the family wish to purchase the bench and lease the ground space prices can be provided on request.
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BOOKS OF REMEMBRANCE Entries in Book of Remembrance The books of remembrance are displayed in a crematorium grounds and are accessible every day of the year. The pages are turned each morning, so that day's entries can be viewed. Please note that the 1st line of inscription is for the name only. All other subsequent lines are for the dedication. Each line must consist of a maximum of 40 characters only. Order forms with grid for text and layout are available from the crematorium. Please note that the council cannot guarantee entries are inscribed immediately. Please allow at lease 4 months prior to the date that the entry is required for when placing the order. It is advisable to check with the admin team at the crematorium to confirm when the entry will be inscribed in the books. Entries will automatically be included in all electronic versions of the books. 2 lined inscription £ 81 5 lined inscription (1st line name only, 2nd -5th lines for £ 125 dedication) 8 lined inscription (1st line name, 2nd-8th line for dedication) £ 190 5 lined inscription with emblem (not coat of arms) £ 205 8 lined inscription with emblem (not coat of arms) Full Heraldic device with supporters, mantling etc, £ 275 with 8 lined inscription MEMORIAL CARDS AND BOOKLETS Crests, badges or floral emblems extra £ 100 Memorial card - Die stamped 2 lined inscription £ 60 5 lined inscription £ 65 8 lined inscription £ 70 Deluxe booklet with 1 inscription 2 lined inscription £ 82 5 lined inscription £ 102 8 lined inscription £ 120
Subsequent inscription in deluxe booklet 2 lined inscription £ 52 5 lined inscription £ 60 8 lined inscription £ 65 Officer to attend to turn the pages of the books, should a viewing be required out of office hours Saturday Sunday and Bank Holidays please note this is dependant on staff availability COMMEMORATIVE MARKERS(FOR ROSES & TREES) Bronze staked plaque 8 x 5 £ 185 Bronze staked plaque 8 x 5 with cameo photo plaque £ 290 Bronze 8 x 3 bench plaque £ 155 Bronze 11 x 3 bench plaque £ 200 Granite boulder - grey, wine, pink honeycomb with black or gold lettering £ 210 York Stone boulder with brown lettering £ 170 Wooden plaque 8" x 5" £ 170 GRAVE PLANTING Planting of lawn graves surrounding the headstone, with bedding plants only applicable to current agreements. (annual fee due) £ 95 BIRD TABLE, BIRD BOX & BAT BOX Please note the following sponsorship opportunities, are for set periods of 5 years, with a view to extend after the initial 5 years has expired. The city council will identify locations suitable for the strategic placement of the identified sponsorship items. No other items such as flowers, additional markers or gifts of any kind may be left at the items. Any such items will be removed without prior notification to the sponsor. please note there is not cost for cremation searches 5 year Sponsorship of Bird table, with small commemorative £ 450.00 plaque 5 year Sponsorship of Bird box, with small commemorative £ 290.00 plaque 5 year Sponsorship of Bat box, with small commemorative £ 290.00 plaque food for the boxes and tables is available from the cemeteries offices and crematorium office (free of charge) AILSA CRAIG MEMORIAL BOULDERS New memorial, 5 year lease, including plaque. £ 390.00 New memorial, 10 year lease, including plaque. £ 640.00 5 year lease renewal £ 230.00 10 year lease renewal £ 455.00 Refurbishment of plaque £ 57.00 New plaque, inc lettering £ 180 No fee is applicable for interments or removals from the vaults for Monday to Friday Appointments Interment or Removal for attended Saturday Appointment Interment or Removal for attended Sunday or Bank Holiday Appointment PRIORY WOODS - BIRD BATH PLAQUES TOP ROW New plaque, lettering and 5 year lease £ 300.00 New plaque, inc lettering and 10 year lease £ 510.00 Refurbishment of plaque £ 57.00 New plaque £ 145.00 MIDDLE ROW New plaque, lettering and 5 year lease £ 315.00 New plaque, inc lettering and 10 year lease £ 520.00 Refurbishment of plaque £ 57.00 New plaque £ 145.00
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BOTTOM ROW New plaque, lettering and 5 year lease £ 335.00
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New plaque, inc lettering and 10 year lease £ 530.00 Refurbishment of plaque £ 57.00 New plaque £ 165.00 5 year lease renewal - all rows £ 206.00 10 year lease renewal - all rows £ 400.00 PRIORY WOODS - BABY CEMETERY - MUSHROOM MEMORIALS New memorial, 5 year lease, including plaque. £ 320.00 New memorial, 10 year lease, including plaque. £ 490.00 Refurbishment of plaque £ 57.00 New plaque £ 145.00 5 year lease renewal £ 175.00 10 year lease renewal £ 345.00 PRIORY WOODS GRANITE VAULTS New 10 year lease of granite vault and black granite plaque & £ 922.00 lettering (80 letters) 1st posy vase.(exc photo & motif) No fee is applicable for interments or removals from the vaults for Monday to Friday Appointments Interment or Removal for attended Saturday Appointment Interment or Removal for attended Sunday or Bank Holiday Appointment Decorative motifs/floral tribute on plaque Cameo Photo arranged and fixed to plaque (4cm x 3cm). £ 125
Cameo Photo arranged and fixed to plaque (7cm x 5cm). £ 145
Heart shaped cameo photo, arranged and fixed to plaque £ 190 Replacement of black granite plaque (excluding photograph) up to 80 letters. £ 375 Renewal of 10 year lease £ 485 Additional letters. £ 4 Registration Service Certificate Service We are able to produce certified copies of registered life events that occurred with the Hull Percentage Proposed Charge 2020/21 Comments if not increasing by 3% Registration District since 1837. Some certificates are printable direct from the IT system, others Uplift Copy Certificates - SR Stock, available in 3 working days £11 Statutory fee, no planned increase Copy Certificates - SR Stock, available in 24 hour Enhanced £35 Statutory fee, no planned increase Service Copy Certificates - SR Stock available same day - Premium £35 Statutory fee, no planned increase Service postage fee cannot be charged Standard Post N/A following change to statutory fees postage fee cannot be charged Royal Mail Signed (recorded delivery) N/A following change to statutory fees Overseas
Overseas Signed For Notice of Marriage Before a couple can marry or form a civil partnership this must give formal notice of their intention to do so. Notice must be given in the Register Office of the district in which the couple reside. Notice of Marriage, charge is per person £35 Statutory fee, no planned increase Notice of Marriage - Designated Office, new scheme £47 Statutory fee, no planned increase Fee kept the same for ease of accounting / managing. This was Notice of Marriage, out of hours fee, charge per appointment £10 changed to an administration fee Administration fee per person last year rather than appointment fee which in effect doubled charge Ceremonies Registrars offer a number of ceremonies i.e. marriage, civil partnership, renewal of vows and baby Marriage and Civil Partnership Ceremonies This is a statutory fee. The fee for Register Office Ceremony in the Office of the Superintendent Registrar at the Wilson Centre Mon - the ceremony and certificate was £46 Fri split in February 2019, so changed from £50 to £46 + £11 3% rounded up for ease of Register Office Ceremony in the Guildhall Ceremony Room Mon - Thur £110 administration 3% rounded up for ease of Register Office Ceremony in the Guildhall Ceremony Room Friday £155 administration Registrars to attend Approved Venue to conduct ceremony Mon - Thur Registrars to attend Approved Venue to conduct ceremony Friday Registrars to attend Approved Venue to conduct ceremony Saturday Registrars to attend Approved Venue to conduct ceremony Sunday & Bank Holidays 3% rounded up for ease of Register Office Ceremony in the Guildhall Ceremony Room Saturday £165 administration Registrars to attend Approved Venue to conduct a ceremony Mon - Thur up to 5.00pm (2 x staff 3% rounded down for ease of £265 members) administration Registrars to attend Approved Venue to conduct a ceremony Mon - Thur 5.00pm - 7.00pm 3% rounded up for ease of £335 2 x staff members administration Registrars to attend Approved Venue to conduct a ceremony Mon - Thur 7.00pm - 9.00pm £360 2 x staff members Registrars to attend Approved Venue to conduct a ceremony Friday before 5.00pm 2 x staff £350 members Registrars to attend Approved Venue to conduct a ceremony Friday 5.00pm - 7.00pm 2 x staff 3% rounded down for ease of £390 members administration Registrars to attend Approved Venue to conduct a ceremony Friday 7.00pm and before 9.00pm 2 3% rounded down for ease of £430 x staff members administration Registrars to attend Approved Venue to conduct a ceremony Saturday - before 5.00pm 2 x 3% rounded down for ease of £380 staff members administration Can we justify different fees now Registrars to attend Approved Venue to conduct a ceremony Saturday - 5.00pm to 7.00pm £415 nolonger aligning to a payment per 2 x staff members ceremony? Registrars to attend Approved Venue to conduct a ceremony Saturday 7.00pm and before 9.00pm 3% rounded up for ease of £455 2 x staff members administration Can we justify different fees now Registrars to attend Approved Venue to conduct a ceremony Sunday & Bank Hol before 5.00pm £455 nolonger aligning to a payment per 2 x staff members ceremony? Registrars to attend ceremonies from 5.00pmto 7.00pm on a Sunday / Bank Holidays £510
Registrars to attend ceremonies from 5.00pmto 7.00pm on a Sunday / Bank Holidays £525
Page 200 of 324 Appendix C
Celebration Ceremonies , Vows Ceremonies following conversion of a CP, Commitment
Ceremony in the Guildhall Ceremony Room Mon - Thur £110
Ceremony in the Guildhall Ceremony Room Friday £155
Ceremony in the Guildhall Ceremony Room Saturday £165
Registrar to attend alternative venue to conduct ceremony Mon - Thur up to and including 5.00pm £165 (only one staff member needed) Registrars to attend alternative venue to conduct a ceremony Mon - Thur from 5.00pm and before £185 7.00pm Registrars to attend alternative venue to conduct a ceremony Mon - Thur 7.00pm and before 3% rounded down for ease of £205 9.00pm administration Registrar to attend alternative venue to conduct ceremony Friday before and including 5.00pm £200 (only one staff member needed) Registrar to attend alternative venue to conduct ceremony Friday after 5.00pm and before 7.00pm 3% rounded down for ease of £220 (only one staff member needed) administration Registrar to attend alternative venue to conduct ceremony Friday from 7.00pm and before 9.00pm 3% rounded up for ease of £250 (only one staff member needed) administration Registrar to attend alternative venue to conduct ceremony Saturday before and including 5.00pm 3% rounded down for ease of £215 (only one staff member needed) administration
Registrar to attend alternative venue to conduct ceremony Saturday after 5.00pm and before 3% rounded down for ease of £240 7.00pm (only one staff member needed) administration
Registrar to attend alternative venue to conduct ceremony Saturday from 7.00pm and before 3% rounded down for ease of £265 9.00pm (only one staff member needed) administration Registrar to attend alternative venue to conduct ceremony Sunday & B/Hol before and including 3% rounded up for ease of £300 5.00pm (only one staff member needed) administration Registrar to attend alternative venue to conduct ceremony Sunday & B/Hol before after 5.00pm and 3% rounded up for ease of £300 before 7.00pm (only one staff member needed administration
Registrar to attend alternative venue to conduct ceremony Sunday & B/Hol after 7.00pm onwards 3% rounded up for ease of £300 (only one staff member needed) administration Booking Fees Ceremonies can be provisionally booked more than one year in advance, some dates in particular Fee kept the same for ease of administration and to avoid to high a Booking Fee £50 % of overall cost of a Guildall ceremony as fee is retained in event of cancellation Other Fees Approved Venue License Fee Suggest leave fee the same or Charge made to venues that apply to become or renew their license to become approved for the consider reduction in attempt to £900 purpose of civil ceremonies. Fee levied includes legal fees and public notice. attract more venues / support local businesses. Approved Venue Fee
Propose to leave the same in attempt to not ut customers off using Non Approved Venue - Initial Visit £35 alternative location and so that we can compete with celebrants. Fee is rarely charged NCS Single Adult Appointment N/A Service nolonger provided
Single Child Appointment N/A Service nolonger provided Couple Appointment N/A Service nolonger provided Family Appointment (Two adults, two children) N/A Service nolonger provided Single parent appointment ( One adult, one child) N/A Service nolonger provided EPRS N/A Service nolonger provided
City Streetscene
Percentage Proposed Charge 2020/21 Comments if not increasing by 3% Uplift Annual Allotments. Charges - £s Annual with Water Concession (with water) Statutory Site To be determined Special Site To be determined Temporary Site To be determined Proposed increase rounded to Bulky Item Collections £23.50 2.2% nearest 50p. Commuter Car Park Pass. To be determined Various, dependant upon Off Street Car Parks. time. On Street Parking. To be determined Parking Permits, Residents To be determined Trade Waste To be determined Replacement Black Bins £36 Dangerous Structures Various New Roads & Street Works Act. Various Major Projects & Infrastructure New Roads & Street Works Act. Various Permits. Various Road & New Developments (S38 / S278) Various
Page 201 of 324 Appendix C
City Neighbourhoods & Housing
Percentage Proposed Charge 2020/21 Comments if not increasing by 3% Uplift Mandatory HMO Licensing Non Accredited Non Accredited Accredited Accredited 5-7 5-7 persons persons 5-7 persons £440 5-7 persons £490 £440 £490 8-10 8-10 persons Review of fee scructure in progress, persons 8-10 persons £500 8-10 persons £550 £500 Decision Record awaiting comments £550 11+person s £550 plus Fee per HMO for 5 years paid on application 11+persons £550 plus £20 11+persons Review of fee scructure in progress, £20 per 11+persons £500 plus per additional room over 10 £500 plus Decision Record awaiting comments additional room over £18 per £18 per additional Review of fee scructure in progress, additional room over 10 Decision Record awaiting comments room over 10 The Council’s Private Housing Service of statutory notices - cost of officer time reasonably Enforcement Policy is being incurred in the preparation and service of certain statutory challenged in the Court of Appeal in notices under the Housing Act 2004 January 2020. The 3% target is expected to be Agency fee for Disabled Facilities Grants (DFGs) - this is 13% of the cost of a DFG (average cost met, providing the level of grant of DFG £5,500). The agency service provides survey of property, costed schedule of works, 3% received is above £1.6m, as it is design, appointment of contractor, and overall project management. expected to be. Town Clerk Percentage Proposed Charge 2020/21 Comments if not increasing by 3% Uplift LOCAL LAND CHARGES FEES From 1st July 2014 STANDARD SEARCH TURNROUND TIMES ARE 5 WORKING DAYS Standard searches are those received via hard copy post or email ELECTRONIC SEARCH TURNAROUND TIMES ARE 3 WORKING DAYS Electronic searches are those received via PALC or NLIS Standard / Standard / Electronic Electronic £118.00 / LLC1 and CON29R (Residential) £115.00 / £90.00 0% £90.00 £148.00 / LLC1 and CON29R (Commercial) £140.00 / £115.00 0% £126.00 £40.00 / The Infrastructure Act 2015 allows LLC1 Only £22.00 £15.00 £22.00 / £15.00 0% £30.00 for the Chief Land Registrar (“the EXPEDITED SEARCHES ARE RETURNED WITHIN 24 registrar”) to incrementally assume 0% HOURS the local land charges statutory function by giving notice to a Searches are returned within 24 hours of time/date received 0% particular local authority specifying a date when the registrar will become £178.00 / Expedited LLC1 and CON29R (Residential) £165.00 / £140.00 0% responsible for local land charges in £150.00 relation to the area of that local authority. This is not therefore a £208.00 / Expedited LLC1 and CON29R (Commercial) £190.00 / £165.00 0% reliable source of income and £175.00 increasing the charges will create a OTHER 0% budget pressure as income is set to decrease. Additional Premises £11.50 each £11.50 each 0%
Additional Questions £10.00 each £10.00 each 0%
CON29O (Optional Enquiries) £10.00 each £10.00 each 0% (This authority does not answer Optional Enquiry No 4) Copy Documents Quote upon Request (Only chargeable for staff time & printing costs) Transactional Finance Services
Percentage Proposed Charge 2020/21 Comments if not increasing by 3% Uplift Deputyship Clients Application fee £ 365 0% Decreased by OPG Charge for work completed up to issue of Court Order £ 745 3% 1st year management fee (depending on balance) £ 775 3% Annual management fee (where balance exceeds £16,000) £ 650 3%
Annual management fee (where balance is below £16,000) not exceeding 3.5% 0% 0.5% increase only Annual report fee (if applicable) £ 216 3% Not currently charged but further Property management fee £ 300 0% clarification required from COP £5.00 per week where capital Corporate Appointeeship Management Fee 0% Not cost effective is greater than £1k Budget figure doesn't currently Interpretation & Translation reflect current external costs incurred
HR
Page 202 of 324 Appendix C
No increase. We are moving to a more efficient on line service next year but will need to charge less for this service not more and savings Disclosure and Barring (DBS) processing £12-£15 on the budget have already been made to reflect this. We've already lost a number of schools to other on line services and need to be competitive with the market.
Page 203 of 324 Appendix C
City Learning Percentage Proposed Charge 2020/21 Comments if not increasing by 3% Uplift Post 16 SEN Home to School Transport CitySafe & Early Intervention
Percentage Proposed Charge 2020/21 Comments if not increasing by 3% Uplift
Children Centres Room Hire
Page 204 of 324 BUSINESS UNIT BUDGET ANALYSIS Appendix D
2020/21 Budget (£000's) Transfer Running TOTAL Customer Grant Other TOTAL NET Service / Reporting Line Employees & Third Costs EXP Receipts Income Income INC BUDGET Party City Health & Wellbeing 2,657 387 0 3,044 -924 0 -83 -1,007 2,037
Public Health 1,509 16,982 894 19,385 0 -400 0 -400 18,985
City Adults Social Care 22,153 95,758 510 118,421 -18,402 -24,307 -205 -42,914 75,507
Culture and Leisure Commissioning 0 12,308 44 12,352 -6,402 0 0 -6,402 5,950
City Regeneration & Policy 5,649 3,023 3 8,675 -1,474 -2,665 -26 -4,165 4,510
City Property & Assets 8,107 13,469 89 21,665 -12,622 -778 -2,228 -15,628 6,037
Major Projects 1,521 20,147 211 21,879 -6,687 -11,756 -704 -19,147 2,732
City Customer Services 4,153 2,134 417 6,704 -3,554 -979 -1,058 -5,591 1,113
City Streetscene 18,295 27,968 65 46,328 -9,868 -275 -1,904 -12,047 34,281
City Neighbourhoods & Housing 3,291 2,229 20 5,540 -852 -2,132 -3 -2,987 2,553
City Treasurer 5,215 7,477 457 13,149 -2,981 -511 -1,118 -4,610 8,539
City Human Resources 2,741 412 3 3,156 -207 -10 -361 -578 2,578
Town Clerk 5,474 1,424 37 6,935 -299 -1 -875 -1,175 5,760
Digital & ICT 3,556 3,969 0 7,525 -2,184 0 -861 -3,045 4,480
City Children Safeguarding 23,584 28,908 34 52,526 -368 -4,482 0 -4,850 47,676
City Learning 4,364 1,589 1,445 7,398 -2,169 -2,119 -581 -4,869 2,529
CitySafe & Early Intervention 14,590 6,213 173 20,976 -659 -12,235 -1,329 -14,223 6,753
TOTAL SERVICE BUDGETS 126,859 244,397 4,402 375,658 -69,652 -62,650 -11,336 -143,638 232,020
Page 205 of 324
Page 206 of 324 Appendix E MEDIUM TERM FINANCIAL PLAN
Ref. Service / Reporting Lines 2020-21 2021-22 2022-23 £000's £000's £000's
1 City Health & Wellbeing 2 037 2 037 2 037 2 Public Health 18 985 18 985 18 985 3 City Adults Social Care 75 507 75 507 75 507 4 Culture and Leisure Commissioning 5 950 5 950 5 950 5 City Regeneration & Policy 4 510 4 510 4 510 6 City Property & Assets 6 037 6 237 6 237 7 Major Projects 2 732 2 732 2 682 8 City Customer Services 1 113 1 113 1 113 9 City Streetscene 34 281 34 081 34 081 10 City Neighbourhoods & Housing 2 553 2 553 2 553 11 City Treasurer 8 539 8 539 8 547 12 City Human Resources 2 578 2 578 2 578 13 Town Clerk 5 760 5 760 5 760 14 Digital and ICT 4 480 4 480 4 480 15 City Children Safeguarding 47 676 47 676 47 676 16 City Learning 2 529 2 529 2 529 17 CitySafe & Early Intervention 6 753 6 753 6 753
18 TOTAL SERVICE BUDGETS 232 020 232 020 231 978
19 DSG 20 Schools Block 4 940 3 779 3 779 21 High Needs Block 29 422 28 723 28 790 22 Early Years Block 18 133 18 133 18 133 23 Central Services 2 632 2 435 2 267
24 TOTAL DSG 55 127 53 070 52 969
25 TOTAL SERVICE REVENUE BUDGETS 287 147 285 090 284 947
26 Benefits Transfer Payments 480 480 480 27 City of Culture 205 0 0 28 Leaders Fund 100 100 100 29 HRA contribution 701 701 701 30 HRA CDC contribution ( 306) ( 306) ( 306) 31 HRA Pension Past Service contribution ( 775) ( 775) ( 775) 32 Levies 404 424 444 33 Corporate Items 638 538 538 34 Ongoing Pension Costs 13 062 13 062 13 062 35 Financing Charges 9 112 14 982 15 897 36 Interest/Dividend Receipts ( 550) ( 550) ( 550) 37 PFI Extra Care (3 400) 0 0
Provision to meet future cost increases 38 Energy Inflation 452 777 1 102 39 Contractual Inflation 1 624 3 124 4 624 40 Pay Inflation 3 270 7 020 10 770 41 Social Care Demographic Fund 0 3 000 6 000
42 Sub-total - Future Cost increases 5 346 13 921 22 496
Major Business Projects / Cross Cutting 43 Customer Enablement / Digital Agenda ( 250) ( 250) ( 250) 44 Income Maximisation / Uplift 0 ( 250) ( 250)
45 Sub-total - Major Business Projects & Cross Cutting savings ( 250) ( 500) ( 500)
46 TOTAL NET CORPORATE / STRATEGIC EXPENDITURE 24 767 42 077 51 587
47 TOTAL BUDGET REQUIREMENT 311 914 327 167 336 534
Page 207 of 324 Ref. Service / Reporting Lines 2020-21 2021-22 2022-23 £000's £000's £000's
FUNDED BY:
48 Housing Benefit & Council Tax Administration Grant (1 689) (1 689) (1 689) 49 New Homes Bonus Grant (2 500) (2 450) (2 450) 50 Better Care Health Funding (17 390) (17 390) (17 390) 51 Social Care Grant (9 580) (13 730) (17 730) 52 Public Health Grant (24 341) (24 341) (24 341)
53 Sub Total - Specific Government Grant (55 500) (59 600) (63 600)
54 Revenue Support Grant (24 400) (25 000) (25 600)
55 Business Rates - Baseline Top up Grant (39 884) (40 881) (41 747) 56 Business Rates (35 969) (43 927) (43 927) 57 Business Rates - Section 31 Grant (6 800) (6 800) (6 800)
58 Sub Total - General Fund funding (162 553) (176 208) (181 674)
59 Government funding Inflation increase 0 (1 500) (1 500)
60 CT Collection Fund Surplus (1 500) 0 0 61 Council Tax Requirement (89 200) (91 702) (94 269)
62 Dedicated Schools Grant (55 127) (53 070) (52 969)
Contributions from reserves 63 - City of Culture Legacy ( 205) 0 0 64 - Business Rate Appeals (7 000) 0 0
Contributions to reserves 65 - Contribution to General Reserve 1 695 0 0 66 - Business Rate Appeals 1 976 0 0 67 - Insurance Reserve 0 0 250
68 Sub Total - Earmarked Reserve Transfers (3 534) 0 250
69 TOTAL GRANT / INCOME (311 914) (322 480) (330 162)
70 FUNDING GAP / (SURPLUS) 0 4 687 6 372
Page 208 of 324 Appendix F
Policy for Flexible use of Capital Receipts
Purpose
1. This report reviews the statutory guidance on the flexible use of Capital Receipts and its application within this authority.
Background
2. Capital receipts can only be used for specific purposes and these are set out in Regulation 23 of the Local Authorities (Capital Finance and Accounting) (England) Regulations 2003 made under Section 11 of the Local Government Act 2003. The main permitted purpose is to fund capital expenditure and the use of capital receipts to support revenue expenditure is not permitted by the regulations.
3. The Secretary of State is empowered to issue Directions allowing expenditure incurred by local authorities to be treated as capital expenditure. Where such a direction is made, the specified expenditure can then be funded from capital receipts under the Regulations.
4. The Secretary of State for Communities and Local Government has issued guidance in March 2016, giving local authorities greater freedoms with how capital receipts can be used to finance expenditure. This Direction allows for the following expenditure to be treated as capital,
“expenditure on any project that is designed to generate ongoing revenue savings in the delivery of public services and/or transform service delivery to reduce costs and/or transform service delivery in a way that reduces costs or demand for services in future years for any of the public sector delivery partners.”
5. In order to comply with this Direction, the Council must consider the Statutory Guidance issued by the Secretary of State. This Guidance requires authorities to prepare, publish and maintain a Flexible Use of Capital Receipts Strategy with the initial strategy being effective from 1st April 2016 with future Strategies included within future Annual Budget documents.
Page 209 of 324 6. There is no prescribed format for the Strategy, the underlying principle is to support local authorities to deliver more efficient and sustainable services by extending the use of capital receipts to support the revenue costs of reform projects.
7. The Statutory Guidance for the Flexible Use of Capital Receipts Strategy states that the Strategy should include a list of each project which plans to make use of the capital receipts flexibility, together with the expected savings that the project will realise. The Strategy should also include the impact of this flexibility on the affordability of borrowing by including updated Prudential Indicators.
8. The Flexible Use of Capital Receipts Strategy is set out below.
Flexible Use of Capital Receipts Strategy
9. Government has provided a definition of expenditure which qualifies to be funded from capital receipts. This is:
“Qualifying expenditure is expenditure on any project that is designed to generate ongoing revenue savings in the delivery of public services and/or transform service delivery to reduce costs and/or transform service delivery in a way that reduces costs or demand for services in future years for any of the public sector delivery partners. Within this definition, it is for individual local authorities to decide whether or not a project qualifies for the flexibility.”
10. The 2020/21 Budget has been set to include provision to meet additional transformational costs following the Ofsted monitoring visit report on Children’s Safeguarding Services
11. The Council's has and intends to use capital receipts to fund the following:
16/17 17/18 18/19 19/20 20/21 Total Savings £m £m £m £m £m £m £m ASC Programme 1.2 2.5 0.6 - - 4.3 18.0 Other - 1.1 3.2 4.9 3.0 12.2 2.0 Transformational Schemes (incl. CYPFS)
Total 1.2 3.6 3.8 4.9 3.0 16.5 20.0
Page 210 of 324 Impact on Prudential Indicators
12. The guidance requires that the impact on the Council’s Prudential Indicators should be considered when preparing a Flexible Use of Capital Receipts Strategy.
13. The indicators that will be impacted by this strategy are set out below; • Estimates of Capital Expenditure Indicator. • Capital Financing Requirement, as capital receipts supported schemes within the existing programme that will now be financed by prudential borrowing. • Financing costs as a percentage of net revenue stream (%), no impact as the savings generated from these projects will meet the debt financing costs arising from the additional borrowing. • Incremental Impact on Council Tax / Housing Rents of Capital Investment Decisions - no impact as savings will meet the debt financing costs
14. The Prudential Indicators will show that this Strategy is affordable and will not impact on the Council’s operational and authorised borrowing limits.
Page 211 of 324
Page 212 of 324 Appendix G
General Reserves Risk Assessment
Likelihood of Happening Low = 0% - 25% Potential Reserve Requirement Net Medium = 26% - £000 50% 2020-21 2021-22 2022-23 High = 51% - 100% £000 £000 £000 No. Year Risk Event
20-21 The future years Government Grant Funding is Low – 25% 10,000 2,500 worse than anticipated 1 21-22 Low – 25% 10,000 2,500
22-23 Low – 25% 10,000 2,500 20-21 Non-delivery of Service Savings Medium – 25% 4,000 1,000
2 21-22 Medium– 25% 4,000 1,000
22-23 Medium – 25% 4,000 1,000 20-21 Cost of VET/Severance understated Low – 5% 10,000 500
3 21-22 Low – 5% 5,000 250
22-23 Low – 5% 5,000 250 20-21 Increased Social Care Costs Medium – 50% 10,000 5,000
4 21-22 Medium - 50% 15,000 7,500
22-23 Medium – 50% 15,000 7,500 20-21 Above inflationary increases in non-pay and Low – 20% 1,600 320 utilities greater than 1% 5 21-22 Low – 10% 3,200 320
22-23 Low – 10% 4,800 480 20-21 Increase in pay costs above pay contingency Medium – 20% 3,100 620
6 21-22 Low – 10% 4,650 465
22-23 Low – 10% 6,200 620 20-21 Partnership liability gives rise to grant clawback Low – 10% 1,000 100 guarantees 7 21-22 Low – 10% 1,000 100
22-23 Low – 5% 1,000 50 20-21 The level of funds within the self insurance Low - 10% 2,500 250 fund is unable to cover a catastrophic incident 8 21-22 affecting council houses or other operational Low – 10% 2,500 250 buildings. 22-23 Low – 10% 2,500 250 20-21 H & S breaches resulting in legal action. New Low – 25% 200 50 legislation means increased monitoring and 9 21-22 requirements. A new reporting system will help Low – 25% 200 50 identify trends. 22-23 Low – 10% 200 20 20-21 Employment tribunal action Low – 25% 2,000 500
10 21-22 Low– 20% 1,000 200
22-23 Low – 20% 1,000 200
Page 213 of 324 Appendix G
Likelihood of Happening Low = 0% - 25% Potential Reserve Requirement Net Medium = 26% - £000 50% 2020-21 2021-22 2022-23 High = 51% - 100% £000 £000 £000 No. Year Risk Event
20-21 TheMTFP future provides years for Government additional revenueGrant Funding funding is Low – 25%10% 400 40 to meet additional costs arising from capital 11 21-22 investment but costs may be understated Low – 10% 400 40
22-23 Low – 10% 400 40 20-21 Major fraud Low – 5% 100 5
12 21-22 Low – 5% 100 5
22-23 Low - 5% 100 5 20-21 LG Pension Scheme – employer contribution Low – 0% - - increase above budget 13 21-22 Low – 25% 2,000 500
22-23 Low– 25% 2,000 500 20-21 Failure to collect debt beyond provision Low – 5% 1,000 50
14 21-22 Low – 5% 1,000 50
22-23 Low – 5% 1,000 50 20-21 Adverse winter increases call on operational Low – 10% 500 50 costs 15 21-22 Low – 10% 500 50
22-23 Low – 10% 500 50 20-21 Capital programme deficit/prudential borrowing Low – 10% 2,000 200 to be funded from revenue 16 21-22 Low – 10% 3,000 300
22-23 Low – 10% 4,000 400 20-21 Fluctuation in borrowing costs/interest receipts. Medium –30% 1,000 300
17 21-22 Medium – 30% 750 225
22-23 Low – 25% 500 125 20-21 Waste recycling performance does not improve Low – 5% 2,000 100 resulting in Landfill Allowance Tax liabilities 18 21-22 above budget Low – 10% 3,000 300
22-23 Low –10% 4,000 400 20-21 Business rate income lower than expected Medium- 10% 70,000 7,000
19 21-22 Medium- 10% 75,000 7,500
22-23 Medium– 10% 75,000 7,500
TOTALS 18,585 21,605 21,940
Page 214 of 324 Balances and Reserves Appendix H
2019-20 2020-21 2021-22 2022-23 (Use) / (Use) / Opening Use of Contributions Closing Use of Contributions Closing Closing Closing Contributions Contributions Balance Reserves to Reserves Balance Reserves to Reserves Balance Balance Balance to Reserves to Reserves £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
General Fund General Balances - Unearmarked 12,968 6,305 19,273 1,695 20,968 20,968 20,968
Earmarked Reserves Insurance Reserve 4,062 4,062 4,062 4,062 250 4,312 Litigation Reserve 1,900 1,900 1,900 1,900 1,900 Business Rate Appeals 3,213 1,847 5,060 (7,000) 1,976 36 36 36 Flood Defence 1,288 (1,000) 288 288 288 288 City of Culture Legacy Reserve 410 (205) 205 (205) - - - Reorganisation 4,242 (2,160) 2,082 2,082 2,082 2,082 Seamen's Memorial 40 40 40 40 40
Total Earmarked Reserves 15,155 (3,365) 1,847 13,637 (7,205) 1,976 8,408 - 8,408 250 8,658
Total General Fund Reserves 28,123 (3,365) 8,152 32,910 (7,205) 3,671 29,376 - 29,376 250 29,626
Capital Funding Reserve 10,112 1,000 11,112 11,112 (2,500) 8,612 (2,500) 6,112
Schools Reserves 76 76 76 76 76
Housing Revenue Account General Balances - unearmarked 3,000 3,000 500 3,500 500 4,000 - 4,000 Modern Homes Reserve - earmarked 22,061 (1,278) 20,783 (10,011) 10,772 (2,495) 8,277 2,177 10,454 Major Repairs Reserve - earmarked - - - -
Total Housing Revenue Account Reserves 25,061 (1,278) - 23,783 (10,011) 500 14,272 (1,995) 12,277 2,177 14,454
Total 63,372 (4,643) 9,152 67,881 (17,216) 4,171 54,836 (4,495) 50,341 (73) 50,268
Page 215 of 324 Appendix H Purpose of Reserves
General Fund
General Balances - Unearmarked Required to protect the Council from unanticipated events and unforseen financial pressures
Earmarked Reserves
Insurance Reserve To fund future insurance claims and to fund self insured risk
Litigation Reserve To settle any on-going or future legal or other claims against the Council
Business Rate Appeals Required to smooth future volatility in Business Rates income due to appeals
Flood Defence To fund future maintenance or special projects to protect the city from the risk of flood
City of Culture Legacy Reserve To fund City of Culture legacy support for four years
Capital Funding Reserve To fund future capital expenditure
Page 216 of 324 Appendix I (i) Integrated Financial Plan December 2019 v1
High Needs and Children Early years Adult Social and (predominately Care Public Health Families funded by DSG) CCG Total £m £m £m £m £m £m
Est Gross service expenditure 2019/20 116.00 22.45 76.64 41.70 469.33 726.12
CCG corporate exp and running costs 0.00 0.00 0.00 0.00 6.20 6.20
Additional exp forecast at P7 4.70 0.00 3.70 1.30 0.00 9.70
Less: HCC service exp funded by Hull CCG -18.17 -0.06 -2.84 -0.08 0.00 -21.14 CCG service exp funded by HCC 0.00 0.00 0.00 0.00 -3.30 -3.30 HCC Service exp funded by Dedicated Schools Grant 0.00 0.00 -2.37 0.00 0.00 -2.37
Estimated service expenditure after adjustment 2019/20 102.54 22.39 75.13 42.92 472.23 715.21 Plus: CCG Cost increase 2.90 0.00 0.00 3.76 15.13 21.79 CCG cost increase contingency 0.00 0.00 0.00 0.00 2.46 2.46 CCG demand growth 2.50 0.00 0.00 0.00 10.08 12.58 Less: HCC MTFS/CCG QUIPP -3.10 0.00 -0.10 0.00 -8.66 -11.86 HCC service exp funded by Hull CCG 0.00 0.00 0.00 0.00 0.00 0.00 HCC Service exp funded by Dedicated Schools Grant 0.00 0.00 0.00 0.00 0.00 0.00
Estimated service expenditure after adjustment 2020/21 104.84 22.39 75.03 46.68 491.24 740.18 Plus: CCG Cost increase 3.00 0.00 0.00 0.08 10.98 14.06 CCG cost increase contingency 0.00 0.00 0.00 0.00 2.52 2.52 CCG demand growth 1.70 0.00 0.00 0.00 7.32 9.02 Less: HCC MTFS/CCG QUIPP 0.00 0.00 0.00 0.00 -9.26 -9.26 HCC service exp funded by Hull CCG 0.00 0.00 0.00 0.00 0.00 0.00 HCC Service exp funded by Dedicated Schools Grant 0.00 0.00 0.00 0.00 0.00 0.00
Estimated service expenditure after adjustment 2021/22 109.54 22.39 75.03 46.76 502.80 756.52 Plus: CCG Cost increase 3.00 0.00 0.00 0.00 15.50 18.50 CCG cost increase contingency 0.00 0.00 0.00 0.00 2.61 2.61 CCG demand growth 1.90 0.00 0.00 0.00 10.33 12.23 Less: HCC MTFS/CCG QUIPP 0.00 0.00 0.00 0.00 -9.96 -9.96 HCC service exp funded by Hull CCG 0.00 0.00 0.00 0.00 0.00 0.00 HCC Service exp funded by Dedicated Schools Grant 0.00 0.00 0.00 0.00 0.00 0.00
Estimated service expenditure after adjustment 2022/23 114.44 22.39 75.03 46.76 521.28 779.90 Notes to the above:
1. All figures are based upon estimated expenditure for 2019/20 and future years, figures are subject to change (ASC, PH and CYPFS Chameleon budget June/Aug 2019). 2. As the figures are based upon estimated expenditure, individual funding sources are not shown. 3. The Adult Social Care (ASC) gross expenditure figure of £116m includes iBCF funding for 2019/20 4. The CCG figures include the avaliable drawdown of historic surplus, agreed with NHS England - £0.955m per annum. 5. The HCC reserves not included in above figures as this reflects service expenditure only. 6. The CCG corporate expenditure and running costs include corporate commissioning costs. 7. The HCC service exp funded by Hull CCG 2019/20 includes the £5m planned realignment of funding to support the cost of Extra Care, s117, TCP and Children's 8. The High Needs and Early Years expenditure excludes the expenditure funded by the Dedicated School Grant relating directly to maintained schools.
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Page 218 of 324 Appendix I (ii)
Integrated Commissioning Programme NHS Hull CCG/Hull City Council
Theme: Developing an integrated approach to prevention, early help and specialist support for adults and children at risk of poor outcomes.
(i) Homelessness (Mental Health and Housing) – implementation of ‘Pathway’ a two year model of integrated healthcare for homeless people and rough sleepers by bringing together teams of NHS, Local Authority and voluntary sector professionals.
(ii) Paediatric Autism Assessment and Diagnosis Remodelling – improve outcomes for autistic children and young people through the implementation of a new operational model and reduce the waiting list.
(iii) Learning Disabilities Wellbeing/Health Checks – increase the number health check for GP registered people with a learning disability.
(iv) Paediatric Speech and Language Service –joint review with CCG, Early Years’ Service, Education and Parent reps, with the intention to develop initial pathways and improve service.
(v) Sensory Processing Disorder (SPD) Assessment and Support – review of service specification and delivery model. Pilot Project to be undertaken prior to implementation of new model.
(vi) Joint commissioning framework Children and Young People with SEND and their families – The joint OFSTED inspection revisit completed (Oct 19), SEND improvement plan reviewed and updated to include actions related to joint commissioning, including joint commissioning strategy for SEND, autism, Speech and Language therapy, sensory processing and short breaks.
(vii) Social Prescribing Service mobilisation – contract in place with primary care presence. Six rounds of targeted social prescribing grants completed with various community projects supported in order to broaden the services available for this service.
(viii) Care Leavers – development of a holistic offer for care leavers by improvement of joint working and provision of a fuller range of support services for care leavers.
(ix) NHS Health Checks – targeting health inequalities through the increase in the number of people in Hull receiving an NHS Health Check.
(x) NHS Specialist Support to treat tobacco dependency – targeting the reduction in number of people dependent upon tobacco through advice from health professionals.
(xi) A & E Alcohol Pathway – pilot underway in A&E following full training of nursing team to identify attendances due to drinking problems and appropriate interventions given.
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Theme: Ensuring consistent quality and cost effective provision for adults and children in vulnerable groups.
(i) Day opportunities review project underway and market shaping with providers. Audits of existing provision completed, benchmarking and engagement with service users and providers commenced. Dynamic Purchasing System being established (DPS).
(ii) Homecare review (Community Wellbeing Services) – Continue review of existing commissioning arrangements. Engage with customers, carers, advocate consultation. Explore short-term/immediate solutions to create capacity in the market.
(iii) Residential placements for Looked after Children – review the regional commissioning arrangements with other Local Authorities.
(iv) Streamlining Integrated NHS and Social Care Pathways – review Adult and Children’s continuing care, benchmark the CHC service with other organisations. Develop joint policy and procedures.
(v) Personalised Care – jointly develop and implement policies, principles and operational guidance to ensure personalised care is embedded within the organisations and offer available to clients.
(vi) Moving with dignity – improve the quality of care offered to clients. Data review completed with Adult and Children’s Social Care to identify moving with dignity cases. Potential to increase the number of personalised care packages which could include alternative moving and handling methods.
(xii) Community Equipment and integrated wheelchair services – formal pooled budget commissioning lead CCG. This includes equipment for pupils in special schools and provision of hoists (Moving with dignity).
(xiii) Targeted Early Help Youth Provision – review and recommission provision to support young people.
(xiv) Improve outcomes for children and young people through jointly commissioned integrated public health and children’s services for 0- 19 year olds – Provider in place and partners are scoping the requirements for the recommissioning of the specialist public health nursing service (0-19)
(vii) Psychological therapies – depression and anxiety services – CCG contract in place and new operational processes in place to improve attendance statistics.
(viii) Estates development and identification of assets of strategic importance – Wilberforce scheme underway to support disposal of Brunswick House. Disability Short Breaks Programme includes review and exploration of opportunities for an Integrated Specialist Service and how that would shape the property requirement.
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COUNCIL TAX and PRECEPTS
The Council is recommended to resolve as follows:
1. Note that the Council, at its meeting on the 16th January 2020, calculated its Council Tax base for the year 2020-21 as 62,554 [item T in the formula in Section 31B(1) of the Local Government and Finance Act 1992, as amended (the “Act”)]. 2. Calculate that the Council Tax requirement for the Council’s own purposes for 2020-21 is £89,200,127
3. The following amounts be calculated by the Council for the year 2020-21 in accordance with Sections 30 to 36 of the Act.
(a) £514,254,127 being the aggregate of the amounts which the Council estimates for the items set out in Section 31A(2) of the Act.
(b) £425,054,000 being the aggregate of the amounts which the Council estimates for the items set out in Section 31A(3) of the Act.
(c) £89,200,127 being the amount by which the aggregate at 3(a) above exceeds the aggregate at 3(b) above, calculated by the Council, in accordance with Section 31A(4) of the Act, as its Council Tax requirement for the year.
(d) £1,425.97 being the amount at 3(c) above divided by the tax base at 1 above, calculated by the Council, in accordance with Section 31B of the Act as the basic amount of its Council Tax for the year.
(e) Valuation Bands
A B C D E F G H £ £ £ £ £ £ £ £ 950.65 1,109.09 1,267.53 1,425.97 1,742.85 2,059.73 2,376.62 2,851.94
being the amounts given by multiplying the amount at 3(d) above by the number which, in the proportion set out in Section 5(1) of the Act, is applicable to dwellings listed in a particular valuation band divided by the number which in that proportion is applicable to dwellings listed in valuation Band D, calculated by the Council in accordance with Section 36(1) of the Act, as the amounts to be taken into account for the year in respect of categories of dwellings listed in different valuation bands.
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4. That it will be noted that for the year 2020-21 the Humberside Police and Crime Commissioner has stated the following amounts in precepts issued to the Council in accordance with Section 40 of the Local Government Finance Act 1992, for each of the categories of dwellings shown below:
Valuation Bands
A B C D E F G H £ £ £ £ £ £ £ £ 152.15 177.50 202.86 228.22 278.94 329.65 380.37 456.44
5. That it will be noted that for the year 2020-21 the Humberside Fire Authority have stated the following amounts in precepts issued to the Council in accordance with Section 40 of the Local Government Finance Act 1992 for each of the categories of dwellings shown below:
Valuation Bands
A B C D E F G H £ £ £ £ £ £ £ £ 57.75 67.38 77.00 86.63 105.88 125.13 144.38 173.26
6. That having calculated the aggregate in each case of the amounts at 3(e), 4 and 5, the Council, in accordance with Section 30(2) of the Local Government Finance Act 1992, hereby sets the following amounts as the amounts of Council Tax for the year 2020-20 for each of the categories of dwellings shown below:
Valuation Bands
A B C D E F G H £ £ £ £ £ £ £ £ 1,160.55 1,353.97 1,547.39 1,740.82 2,127.67 2,514.51 2,901.37 3,481.64
7. The Council has determined that its relevant basic amount of Council Tax for 2020-21 is not excessive in accordance with principles approved under Section 52ZC Local Government Finance Act 1992. As the billing authority, the Council has not been notified by a major precepting authority that its relevant basic amount of Council Tax for 2020-21 is excessive and that the billing authority is not required to hold a referendum in accordance with Section 52ZK Local Government Finance Act 1992.
Page 222 of 324 Appendix K (i) Dedicated Schools Grant
Schools Block - Budget 2019-2020 and Estimate for 2020-2021 2018-2019 Dedicated Schools Grant: Schools Block Budget 2020-2021 2021-2022 Outturn 2019-2020 Schools Block Schools Block Notes Budget Projection
£ DSG Funding: £ £ £ 171,282,799 Schools Block Funding 175,945,243 185,997,783 185,997,783
1,125,150 Growth Funding 1,425,000 1,578,825 1,578,825.00 172,407,949 Schools Block Total Funding 177,370,243 187,576,608 187,576,608
£ Schools Block Expenditure £ £ £ 161,917,759 Academy Recoupment 167,947,932 181,753,809 183,797,783 8,503,000 Maintained Schools 7,696,000 3,360,938 2,200,000 862,040 Transfer to High Needs 301,311 883,036 0 Schools Forum to decide at it's meeting on 10th Jan 2020. 1,125,150 Growth Funding 1,425,000 1,578,825 1,578,825 £172,407,949 Total Schools Block Expenditure £177,370,243 £187,576,608 £187,576,608
£0 In Year Balance £0 £0 £0
Central Schools Services Block (CSSB) - Budget 2019-2020 and Estimate for 2020-2021 2018-2019 Dedicated Schools Grant: Central Schools Budget 2020-2021 2021-2022 Outturn Services Block 2019-2020 Budget CSSB Notes Projection
£ DSG Funding: £ £ £ 1,151,000 Historic Commitments 1,151,000 920,800 736,640 Reduced by 20% in 20-21 - may reduce further 1,742,916 Ongoing Functions 1,728,572 1,711,630 1,698,129.58 NFF - protected at 2.5% max reduction per pupil 2,893,916 CSSB Total Funding 2,879,572 2,632,430 2,434,770
£ CSSB Expenditure £ £ £ Historic Commitments 9,556 School Kitchens 0 0 0 150,000 Equal Pay 150,000 150,000 150,000 Capitalised backdated equal pay claims for schools, over 20 years from 2011-2012. 571,590 Prudential Borrowing 571,590 571,590 571,590 Annual repayment for TOPS; the scheme for the reorganisation of Hull’s Primary estate. Repayment over 31 years from 2006 - 2007.
203,812 Contribution to Pension Costs re TOPS 171,910 171,910 171,910 Ongoing pension costs for teachers who retired early following school reorganisations
934,958 Total Historic Commitments 893,500 893,500 893,500 Ongoing Functions 45,187 Schools Forum support 45,000 45,000 45,000 207,736 Copyright, subscriptions and licences 220,105 220,105 220,105 DfE charge 198,500 Admissions 202,500 202,500 202,500 1,298,090 Local Authority statutory duties and responsibilities (Previous ESG Grant) 1,324,090 1,324,090 1,324,090 £1,749,513 Total Ongoing Functions £1,791,695 £1,791,695 £1,791,695
£2,684,471 Total CSSB Expenditure £2,685,195 £2,685,195 £2,685,195
£209,445 In Year Balance £194,377 -£52,765 -£250,425
NB - These figures differ from those on the MTFP Summary due to academy recoupment for both mainstream academies and place funding for Special and AP academies
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Page 224 of 324 Appendix K (ii) High Needs block - Budget 2020-2021 19 February 2020 2018-2019 Dedicated Schools Grant: High Needs 2019-2020 2020-2021 2021-2022 2022-2023 High Needs Block Estimated High Needs High Needs High Needs Notes Outturn Outturn Budget Projection Projection DSG Funding: £ 25,804,769 High Needs Allocation 26,990,708 26,990,708 27,800,430 27,800,430 National Funding Formula 2,500,000 Basic Entitlement (Special School Pupils) 2,672,000 2,832,000 2,992,000 3,152,000 Assumed 40 additional pupils per year 168,000 Import / Export Adjustment 102,000 102,000 102,000 102,000 June 18 update from 8 to 28 pupils Funding for new CAMHS Provision 140,292 240,500 240,500 240,500 Unit to open Sept 19 Estimated Increase Due to NFF 3% cap on 0 809,721 Additional funding until match to full NFF & increases assumption of future increases 585,540 Additional DSG Funding 585,540 4,700,000 4,700,000 4,700,000 Additional funding for 2020-2021 - future years not yet announced
29,058,309 High Needs DSG Allocation 30,490,540 35,674,930 35,834,930 35,994,930 DfE Deductions (deductions for place funding in settings and academies not maintained by the local authority plus place -96,000 Postfunding 16 for- Recoupment post 16 High academies: Needs students: -96,000 -89,000 -84,000 -84,000 decreased places at poat 16 -62,500 Post 16 - Maintained Special schools: 0 0 0 0 FH converted Sept 18 -168,000 CCP and FE -240,000 -310,000 -360,000 -360,000 Increased places at FE -348,000 The Sullivan Centre (Hospital Education) -348,000 -348,000 -348,000 -348,000 25 places @ £13,920 The Sullivan Centre (New CAMHS Provision) -140,292 -240,500 -240,500 -240,500 13 places @ £18,500 opens Sept 19 -674,500 Total Deductions -824,292 -987,500 -1,032,500 -1,032,500
28,383,809 HN Block less deductions 29,666,248 34,687,430 34,802,430 34,962,430 Add: 63,573 Post 16 place funding 0 0 0 0 FH converted Sept 18 862,040 Additional Funding Transfer from Schools Block 301,529 883,000 0 0 Transfer allowable from Schools Block with Schools Forum permission. 0.5% 1819 & 0.17% 1920 DfE disapplication agreed.
£29,309,422 Total High Needs block funding: £29,967,777 £35,570,430 £34,802,430 £34,962,430
£ High Needs Block Expenditure £
Special Schools Total 6,050,000 Place Funding 6,335,833 6,517,500 6,392,500 6,392,500
6,889,250 Commissioning Funding (Top Up) 7,485,000 7,585,000 7,720,000 7,720,000
12,939,250 Sub total: 13,820,833 14,102,500 14,112,500 14,112,500 Other Hull SEN Places 72,917 Resource Bases 234,146 497,459 682,833 682,833
474,020 SEND Pupils placed in AP provision 750,000 732,000 732,000 732,000
85,000 Post 16 Pathway - total funding 102,667 176,000 176,000 176,000 0 Future Year pressures / In Year Commissioning 0 150,000 350,000 550,000 Estimate for sufficiency increases 983,000 Residential provision 983,000 983,000 983,000 983,000 Under review 194,582 PFI Affordability Gap 186,666 172,404 172,500 172,500 £14,748,769 Total Special School& SEN Places Funding £16,077,312 £16,813,363 £17,208,833 £17,408,833
Alternative Provision Total 2,235,000 Place Funding 2,178,333 2,140,000 2,140,000 2,140,000 Euler to open Sept 2021 - places will be charged from Sept 23 2,186,243 Commissioning (Top Up) 2,108,803 2,108,803 2,108,803 2,108,803 0 Additional In year Commissioning Adj 0 100,000 100,000 100,000 4,421,243 Sub total: 4,287,136 4,348,803 4,348,803 4,348,803 120,000 EAL Provision 120,000 120,000 120,000 120,000 under review -89,148 Exclusions -100,000 -100,000 -100,000 -100,000 £4,452,095 Total Alternative Provision: £4,307,136 £4,368,803 £4,368,803 £4,368,803
Outreach Support: 254,000 Autism Support 254,000 254,000 254,000 254,000 under review 150,000 Complex Needs Outreach 150,000 150,000 150,000 150,000 under review 203,825 Primary SEMH - Outreach 203,825 203,825 203,825 203,825 under review 108,793 Home Tuition 108,793 108,793 108,793 108,793 under review 310,000 Early Years Area SENCO's 349,000 349,000 349,000 349,000 £1,026,618 Total Outreach Support: £1,065,618 £1,065,618 £1,065,618 £1,065,618 SEN Allocations 2,548,487 Top Up Funding for pupils at Mainstream 2,820,000 3,000,000 3,200,000 3,300,000 not including settings with Education Health and Care Plans (Including Early Years settings) 783,117 Post 16 top up funding for settings other than 750,000 850,000 950,000 1,050,000 Special schools Page 225 of 324 19/02/2020 Page 1 of 2 2018-2019 Dedicated Schools Grant: High Needs 2019-2020 2020-2021 2021-2022 2022-2023 High Needs Block Estimated High Needs High Needs High Needs Notes Outturn Outturn Budget Projection Projection 213,924 SEN Allocations to Early Years Settings 210,000 275,000 300,000 300,000 (Inclusion Fund - see also amount in EY's block) 510,248 Disproportionality 844,000 650,000 650,000 650,000 £4,055,776 Total SEN Allocations £4,624,000 £4,775,000 £5,100,000 £5,300,000
Payments Outside the Authority 518,715 Other LA's schools with Hull's statement pupils 550,000 550,000 550,000 550,000
1,900,271 Independent School Places 1,700,000 1,700,000 1,700,000 1,700,000 £2,418,986 Total Payments Outside the Authority £2,250,000 £2,250,000 £2,250,000 £2,250,000 Specialist Support: 221,441 Language Unit 189,000 189,000 189,000 189,000 under review 118,908 Portage Service 120,000 120,000 120,000 120,000 1,781,186 Integrated Physical and Sensory Support 1,665,000 1,665,000 1,665,000 1,665,000 under review Service (IPaSS) 145,436 KIDS Contract 140,000 140,000 140,000 140,000 16,154 CASE 15,000 0 0 0 contract ended August 19
17,494 Local Offer Post 13,500 13,500 13,500 13,500 100,000 Pooled Equipment Budget 100,000 100,000 100,000 100,000 401,000 Contribution to Home to School Transport 401,000 401,000 401,000 401,000 £2,801,619 Total Specialist Support: £2,643,500 £2,628,500 £2,628,500 £2,628,500 Central support and related recharges: 591,500 Includes overheads relating to central provision 591,500 591,500 591,500 591,500 1.62% and direct school support £591,500 Total Central Support £591,500 £591,500 £591,500 £591,500
£30,095,363 Total High Needs spend: £31,559,066 £32,492,784 £33,213,254 £33,613,254
-£785,941 In Year Balance -£1,591,289 £3,077,646 £1,589,176 £1,349,176
Savings £516,000 £800,000 £1,000,000 To spend on priorities - High Needs -£1,000,000 -£1,000,000 -£1,000,000 To spend on priorities - Transferred from -£883,000 Schools Block -2,043,148 Carry forward: -2,829,089 -4,420,378 -2,709,732 -1,320,556 -£2,829,089 Cumulative Carry Forward -£4,420,378 -£2,709,732 -£1,320,556 £28,619 To be in balance by 2022-2023
NB - These figures differ from those on the MTFP Summary due to academy recoupment for both mainstream academies and place funding for Special and AP academies
Page 226 of 324 19/02/2020 Page 2 of 2 Appendix K (iii)
Early Years block - Budget 2020-2021 2018-2019 Dedicated Schools Grant: Early Years 2019-2020 Early Years 2020-2021 Early Years Early Years Notes Outturn Block Budget Budget
DSG Funding: £ £ Total Funding Per Nos of Total Per Nos of Total (£) Description Hour PTE Funding (£) Hour PTE Funding (£) 3 and 4 Year Old Funding 10,725,064 3 and 4 year Universal 15 hours £4.30 4347 10,654,191 £4.38 4347 10,852,720 2020-2021 Increased funding rate 3 and 4 year old additional 15 hours for working Updated in July 19 for Jan 19 2,671,043 parents 7/12ths from September 2017 £4.30 1154 2,827,452 £4.38 1154 2,881,076 numbers, will be updated in July 20 190,044Maintained Nursery Schools Funding £4.33 96 236,605 £4.33 96 236,605 for 7/12ths based on Jan 20 numbers 13,586,151 Total Funding for 3 & 4 Year Olds 13,718,247 13,970,401 Other DSG Funding 2020-2021 Increased funding rate 3,597,213 Deprived 2 Year Old Funding £5.20 1253 3,713,092 £5.28 1253 3,771,029 Updated in July 19 for Jan 19 68,880 Disability Access Fund 70,116 70,100 numbers, will be updated in July 20 305,452 Early Years Pupil Premium (EYPP) £0.53 1071 321,171 £0.53 1071 321,300 for 7/12ths based on Jan 20 numbers 17,557,696 Total DSG Funding 17,822,626 18,132,830 Funding Adjustments (280,937) Estimated Jan 19 adjustment reserved April 19 215,276 Final Adjustment January 153,874 - 223,000 Transfer from Central School Services Block Agreed at Schools Forum March 18
£17,715,035Total Early Years block funding: £17,976,500 £18,132,830
£ Early Years Block Expenditure £ £ Nos of Total Nos of Total Description PTE Funding (£) PTE Funding (£) Rates increased as agreed from September 2019. 2020-2021 showing rates increased by 8p this 3 and 4 Year Old Expenditure requires consultation 5,913,662 3 and 4 year Universal 15 hours - schools £4.05 2450 5,655,825 £4.13 2450 5,767,545 Estimates based on numbers funded 4,051,709 4 and 4 year Universal 15 hours - PVI £4.05 1897 4,378,936 £4.13 1897 4,465,728 and hourly rates and deprivation 3 and 4 year old additional 15 hours for working supplements set from April 2017. 2,312,140 parents 7/12ths from September 2017 £4.05 1,154 2,664,009 £4.13 1,154 2,716,631 190,044 McMillan Nursery - Block sum £4.33 96 236,691 £4.33 96 236,691 Based on Formula - updated July 18 200,000 100,000 110,104 Early Years Inclusion Fund See also inclusion fund amount in Additional expenditure required to meet 95% pass High Needs block through - added to inclusion fund 0 0 12,577,659 Total expenditure for 3 and 4 year olds. 13,135,461 13,286,595 Minimum pass through to providers 95% 96% 95%
Rates increased as agreed from September 2019. 2020-2021 Other Provider Expenditure showing rates increased by 8p this 3,405,813 Deprived 2 Year Old Expenditure £5.10 1253 3,642,471 £5.18 1253 3,699,608 requires consultation 20,295 Disability Access Fund 25,000 25,000 330,400 Early Years Pupil Premium £0.53 1071 321,300 £0.53 1071 321,300
Centrally Retained Funding 633,014 Early Years staffing 620,000 620,000 167,165 Central costs 167,165 167,165 6,711 Early Years training 10,000 10,000 3,948 Marketing promotion - capacity building 5,000 5,000 0 Milk 0 0 Saving Required to meet maximum cost 0 0
810,838 Total Centrally Retained Expenditure 802,165 802,165
17,145,005 Total Early Years spend 17,926,397 18,134,668
In Year Balance £570,030 £50,103 -£1,838 -435,954 Carry forward: 134,076 184,178 £134,076 Cumulative Carry Forward £184,178 £182,341
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Report to:
Council 27 February 2020 Wards All
Capital Strategy 2020-21 to 2022-23
Report of the Director of Finance and Transformation (S151 Officer)
This item is not exempt Therefore exempt reasons are not applicable
1. Purpose of the Report
1.1 To seek approval of the Council’s 2020/21 Capital Strategy which incorporates the 2020/21 to 2022/23 Capital Programme.
1.2 The Capital Programme has been compiled in the light of the latest funding assumptions and the financial implications are appropriately reflected within the revenue budget projections contained within the General Fund Revenue Budget relating to the Medium Term Financial Plan and also the Housing Revenue Account (HRA) Budget which are both separate reports on the agenda.
2. Executive Summary
2.1 The Capital Strategy became a new requirement for Council’s to produce from April 2018 following the publication of the revised Prudential Code for Capital Finance in Local Authorities 2017. It requires Local Authorities to demonstrate in the Strategy that capital expenditure and investment decisions are taken in line with service objectives and take account of stewardship, value for money, prudence, sustainability and affordability.
2.2 The Capital Strategy is a key document for the Council and forms part of the Council’s integrated revenue, capital and balance sheet planning. It provides a high level overview of how capital expenditure, capital financing and treasury management activity contribute to the provision of services. It also provides an overview of how associated risk is managed and the implications for future financial sustainability. It includes an overview of the governance process for approval and monitoring of capital expenditure.
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2.3 The Strategy maintains a strong and current link to the Council’s priorities detailed within the Council’s Corporate Plan 2018-2022, and to its key strategy documents notably the Treasury Management Strategy, Asset Management Strategy, Medium Term Financial Plan and the Corporate Plan.
2.4 Although the intention is for the Capital Strategy to consider a longer term view, it is currently very difficult to look beyond a three year timeframe, which is consistent with the Medium Term Financial Plan, in any detail in terms of funding assumptions in light of Fair Funding. The Council will, however, continue to support capital priorities going forward.
3. Recommendations
3.1 That Council approves;
i. The Capital Strategy as set out in this report. ii. The Capital Programme 2020/21 to 2022/23 as described at section 11 of the report and detailed at Appendix A.
4. Reasons for Recommendations
4.1 To ensure the Council adopts the requirements of the revised Prudential Code for Capital Finance 2017.
4.2 The Council is required to set a balanced budget and the Capital Strategy and subsequent Capital Programme form part of this process, along with the governance process to monitor and manage the programme.
5. Impact on other Executive Committees (including Area Committees)
5.1 The provision of reliable financial information supports the Council’s decision making processes and therefore impacts on all Council priorities.
6. Introduction
6.1 The primary purpose of this strategy is to identify and progress schemes to help deliver the Corporate Plan and to help make the Council better placed in order to be able to deliver the level of required services.
6.2 The Strategy sets out the Council’s capital spending programme and the principals which underpin this to deliver the Corporate Plan.
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7. Council Objectives and links to the Capital Strategy
7.1 The capital investment plans are linked to the Council’s Corporate Plan. The Corporate Plan is the Council’s key strategic document and outlines the Council’s overall vision, priorities and values for the next four years. This will guide everything the Council does as an organisation and how we will go about it as we work towards securing a positive and sustainable future for the city, through decisive leadership and the development of inclusive partnerships and communities. It focuses on major issues that require specific attention rather than listing every activity that we undertake. The Corporate Plan helps us target limited resources and provides a framework against which we can assess our progress.
7.2 The Corporate Plan has been refreshed and updated to sharpen its focus and ensure alignment with the City Plan, and was approved by Council on 17 January 2019.
7.3 The Corporate Plan is summarised as follows:
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7.4 These objectives reflect the ongoing commitment to ensure the Council works to serve the people of Hull. Aligned to corporate and service priorities, individual capital scheme proposals are included within the approved capital programme or are to be considered for a resource allocation over the period of the capital strategy.
8. The Capital Budget Setting Process
8.1 The Capital Programme is developed with consideration to a number of key criteria, these may include: • Maintenance of the essential infrastructure of the Council (including ICT) • Essential health and safety works • Essential rolling programmes • Whether wholly financed by internal/external resources • Match funded investment for regeneration projects • The outcome of feasibility studies • Spend to save schemes
8.2 The need for a capital scheme may be identified through one or more of the following processes: • Annual Service Delivery Plans identifying any capital investment required to meet future service demands • The Asset Management Strategy highlighting any deficiencies in the condition, suitability and sufficiency of the Council’s existing building stock and identifying future areas of need • The Local Transport Plan (Highways Strategy) tackling the problems of congestion and pollution, and looking at roads and the infrastructure needs of the city • Reviews and external inspections may identify areas that need capital investment • The need to respond to Government initiatives and new laws and regulations • The need to maintain and increase revenue income generation to contribute to the funding of services
8.3 Once key capital priorities have been identified, in preparing capital project proposals consideration should be given to the following:
Prudence • Recognition of the ability to prioritise and refocus following transformation work • Recognition of the capacity in the Council to deliver such a programme • Recognition of the knowledge and skills available and whether these are commensurate with the appetite for risk • Recognition of the future vision of the Council • The approach to treasury management and the management of risk as set out in the Treasury Management Strategy.
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Affordability • Revenue impact of the proposals on the Medium Term Financial Plan • The borrowing position of the Council, projections of external debt and the use of internal borrowing to support capital expenditure • The authorised limit and operational boundary for the following years • Whether schemes are profiled to the appropriate financial year
Sustainability • A long term view of capital expenditure plans, where long term is defined by the financial strategy of and risk faced with reference to the life of the project/assets • Provision for the repayment of the debt over the life of the underlying asset/debt as set out in the Minimum Revenue Provision Policy • An overview of asset management planning including maintenance requirements and planned disposals
8.4 Schemes are prioritised based on the above key criteria which results in: • Identifying essential capital investment for the next three financial year • Utilising feasibility studies where needed • Adopting a Gateway Review approach for larger strategic schemes to enter the programme at the required time • The ability to enter items into the capital programme in a managed way through the annual budget round and in year monitoring processes • Being mindful of the current level of the programme in relation to capacity to deliver, the financing of the schemes and any other running costs
8.5 The overall capital programme for the next three financial years, once established, is presented to Members in February each year, following scrutiny via all relevant scrutiny committees, and is approved by Full Council.
8.6 Members also approve the overall and associated borrowing levels at the February meeting each year as part of the Treasury Management Report. The taking of loans then becomes an operational decision for the Director of Finance and Transformation who will decide on the basis of the level of reserves and money market position whether borrowing should be met internally or whether to enter into external borrowing.
8.7 Once the Council has approved the capital programme, then expenditure can be committed against the approved schemes subject to the normal contract procedure rules and terms and conditions of funding.
8.8 Whether capital projects are funded from grant, contributions, capital allocations or borrowing, the revenue costs must be able to be met from existing revenue budgets or identified savings or income streams.
8.9 Following approval by Council the capital programme expenditure is then monitored on a quarterly basis and reported to Members accordingly.
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9. Monitoring of the Capital Programme
9.1 The annual capital programme, which is updated for new proposed schemes and revised profiling, is presented to Full Council each year. Council approval of the programme gives an allocation to Programme Managers to support specific schemes and ongoing programmes of work.
9.2 A key issue in managing the capital programme is in year movements of budgets from one financial year to another. Capital budgets can be reprofiled across years to reflect delays or spend brought forward to support accelerated schemes. However, reprofiling needs to be managed appropriately to ensure annual capital budgets are as accurate as possible.
9.3 The Council will continuously look to ensure that periodic projections during the year (three formal monitoring reports and an outturn report reported to Cabinet) are as accurate as possible, and where projects do slip, a robust process is in place to ensure Programme Managers provide a detailed explanation with evidence as to why the project needs re-phasing. The in year monitoring reports will be focussed around programme exceptions, following on from returns submitted by individual Programme Managers. Whilst the intention is to understand and address the reasons why spend against profile variances arise, it maybe that some exceptions are unforeseen, unavoidable or outside the control and influence of the Programme Manager or Council.
10. Methods of Funding Capital Expenditure
10.1 There are a range of methods for funding capital expenditure as follows: • Government Grants and Non-Government Contributions
Capital resources from Central Government can be split into two categories: - Un-ringfenced – resources which are delivered through grant that can be utilised on any project (albeit that there may be an expectation of use for a specific purpose). - Ringfenced – resources which are ringfenced to particular areas and therefore have restricted uses.
Where there is requirement to make an application to an external agency for external funding and, where appropriate, to commit Council resources as matched funding to any bid for external resources, a business cases must be completed for approval. This must justify the bid for external resources and any Council matched funding required prior to submission of the bid.
• Prudential Borrowing
The Council will investigate opportunities to resource capital projects using prudential borrowing where plans are sustainable, affordable and prudent. Where it is considered that Prudential Borrowing is the appropriate method of funding, but it requires additional revenue financing, the cost will be reflected in the Medium Term Financial Plan.
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Since 2012 the Council has been able to take advantage of the Public Works Loans Board (PWLB) certainty rate, whereby there is a 20 basis points (0.20%) discount on standard loans form the PWLB under the prudential borrowing regime for Authorities that provide improved information on their long term borrowing and associated capital spending plans. It has been confirmed that the Council has qualified for the certainty rate for the period 1 November 2019 to 31 October 2020.
• Prudential Borrowing (self-funded schemes)
For ‘spend to save schemes’ assistance may be provided to support initial set up costs or feasibility studies, but it is expected that in the longer term these schemes will produce savings and/or additional income that will as a minimum fund any additional operational or borrowing costs.
• Capital Receipts
A capital receipt is an amount of money exceeding £10,000 which is received from the sale of an asset. Capital receipts are usually restricted to use for: - Financing new capital investment - Reducing borrowing under the Prudential Framework They cannot be spent on revenue items.
However, following the 2015 Spending Review, in March 2016 the DCLG published statutory guidance on the flexible use of capital receipts for a three year period covering 2016/17 to 2018/19. This guidance allows Local Authorities to use capital receipts to offset the revenue cost of transformational projects which are expected to deliver future ongoing revenue savings. As part of the 2018/19 Provisional Local Government Finance Settlement, the Secretary of State announced an extension of this flexibility for a further three years to 2022. This was confirmed in the Final Settlement notification received in February 2018. The required Flexible Use of Capital Receipts Policy is laid down at Appendix F of the General Fund Revenue Budget Report.
• Revenue Contributions
Services may use their revenue budgets to fund capital expenditure. This may be via a capital reserve which is an internal fund set up to finance capital expenditure as an alternative to external borrowing.
• Section 106 Agreements/Community Infrastructure Levy (CIL)
In considering an application for planning permission, the Council may seek to secure benefits to an area through the negotiation of a ‘planning obligation’ with the developer. Such obligations are authorised by Section 106 of the Town and Country Planning Act 1990. The Council may therefore, in some instances, receive funds to enable it to undertake works arising from these obligations. Examples of works include, the provision or improvements of community facilities (parks/play areas), affordable housing and improved transport facilities.
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The Community Infrastructure Levy (CIL) is a planning charge based on legislation that came into force in April 2010. When adopted, a CIL allows the Council to raise contributions from new developments to help pay for infrastructure that is needed to support planning growth. Where a CIL charging schedule is in place, it largely replaces S106 obligations in delivering strategic infrastructure. However, S106 would still be used for affordable housing and site development infrastructure works.
11. Capital Programme 2020/21 to 2022/23
Introduction
11.1 The Capital Programme has been subject to review and amendment through the identification of anticipated future funding sources and resource demands.
11.2 This report sets out the proposals for the allocation of the available capital resources in the period 2020/21 to 2022/23 and presents an updated Capital Programme at Appendix A for approval. The programme provides for:
- A fully funded Capital Programme - Funding of annual demands, including maintaining the Council’s assets - Support for one-off projects over the next three years - Provide feasibility funding to develop schemes/enable external funding bids - Support for ‘spend to save’ schemes funded from revenue savings
11.3 The revised programme reflects an additional £159m in planned expenditure over the period. The majority (£131m) of this expenditure is funded from ‘ring fenced’ resources which have been used for specific purposes (including self- funded schemes) supplemented by the on-going commitment to ’passport’ targeted grant allocations, and for limited Prudential Borrowing to provide for on-going maintenance programmes.
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Capital Resources
11.4 The following table presents a summary of the ringfenced resources and additional resources available in the medium term to support the capital proposals:
Table 1 – Available Resources
Source of Available Resources £m Ringfenced and ‘Passported’ Resources - Unringfenced grant allocations 2022/23 7.500 - Prudential Borrowing – annual programmes 4.350 - Prudential Borrowing (Self-funded schemes) 22.826 - Revenue Contributions 0.500 - HRA 50.662 Sub Total 85.838
Available Resources - Prudential Borrowing 24.176 - Capital Receipts 4.250 Sub Total 28.426 TOTAL 114.264
External Grant Funding - Disabled Facilities Grants (Better Care Fund) 2022/23 2.200 - Highways (grant bids) 38.171 - Investment in Museums 2.700 - Beverley Road THI 0.597 - S106 Receipts 1.000 Sub Total 44.668
GRAND TOTAL 158.932
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Proposed New Allocations
11.5 The following table details the proposed allocations of the available resources with an indicative profile of spend with supporting narrative below:
Table 2 – Proposed Allocation of Available Resources identified in Table 1 – 2020/21 to 2022/23
Scheme Ref 20 20 /2 1 202 1/2 2 20 22/2 3 202 3/2 4+ Total £m £m £m £m £m Unringfenced ‘Targeted’ Grants Highways A - - 3.500 - 3.500 Schools B - - 4.000 - 4.000 Total - - 7.500 - 7.500
Annual Programmes and Self -Funded Schemes Albert Avenue Baths C 0.200 1.800 - - 2.000 Beverley Road Baths D 1.100 0.400 - - 1.500 Beverley Road THI E - 0.597 - - 0.597 Bridge Maintenance F 12.220 2.000 - - 14.220 Carbon Neutral 2030 G 1.120 3.850 13.250 - 18.220 Childrens Homes H 0.500 - - - 0.500 Backlog Maintenance Childrens Homes I 0.400 0.400 - - 0.800 Reprovision Corporate Buildings J 3.500 1.000 2.000 - 6.500 Maintenance/H&S Disabled Facilities Grant K - - 2.200 - 2.200 Highways Maintenance – L 2.000 4.401 0.500 - 6.901 cycle lanes/verges High Street Regeneration M 3.600 14.600 5.000 - 23.200 High Street/Queen Street N 1.000 250 - - 1.250 HRA O (22.189) 12.043 60.808 - 50.662 ICT P 3.046 2.660 2.701 - 8.407 ICT – Migration to Cloud Q 1.509 2.078 1.219 - 4.806 Investment in Museums R - - 2.700 - 2.700 Library Equipment S - - 0.400 - 0.400 Local Community T - - 1.000 - 1.000 Initiatives Multi Storey Car Parks U 0.250 - - - 0.250 Parks V - - 0.200 - 0.200 Pearson Park Road W 0.300 - - - 0.300 Private Sector Housing X 0.300 2.500 1.250 - 4.050 S106 Funded Schemes Y - - 1.000 - 1.000 Transformation Costs Z 3.000 - - - 3.000 Total 11 .856 48.579 94.22 8 - 154.663
GRAND TOTAL 11 .856 48.579 10 1.72 8 - 162 .163
Less: Reallocation of existing programme resources (3.231) TOTAL INCREASE 158.932
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Note – the table above identifies the additional resources available. Allocations arising from passported targeted grants and allocations for Local Community Initiatives, ICT, Corporate Buildings Maintenance, Parks and Private Sector Housing for 2020/21 and 2021/22 are contained within the existing approved programme as shown at Appendix A.
11.6 The following table summarises the proposed three year programme incorporating the above additions, and summaries the overall programme funding:
£m Existing Programme 240.275
Additional Funding 158.932
Total Proposed Programme 399.207
Funding: Grants 97.018 Capital Receipts 11.992 Borrowing 94.704 Revenue Contributions 5.500 NNNDR Uplift re Enterprise Zones 12.038 HRA 177.955
Total Funding 399.207
11.7 Additional commentary to provide some background to the proposed allocations in Table 2 is as follows:
A & B – Passporting of Targeted ‘unringfenced’ Grants
The continuation of ‘passporting’ Targeted Grants to fund associated Schools and Highways related programmes. These are indicative allocations only as grants are unconfirmed at this stage.
C – Albert Avenue Baths
Following approval of the refurbishment and upgrade of this Leisure Centre (Capital Strategy 2019/20) to facilitate improvements to dry side of the former small pool area and to restore the lido facility, significant backlog maintenance has been identified which is required to site and to support this scheme.
D – Beverley Road Baths
Following approval of the refurbishment and upgrade of this Leisure Centre (Capital Strategy 2019/20) to facilitate improvements to the changing rooms, a new sauna and new flooring in the downstairs gym, significant backlog maintenance has been identified which is required to site and to support this scheme.
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E – Beverley Road THI
Reflects additional grant funding to support the overall scheme which incorporates a grants programme for identified properties, public realm works, including boundary treatments at specifically targeted properties, and, a programme of educational & outreach activities.
F – Bridge Maintenance
A Local Highways Maintenance Challenge Fund bid has been submitted to the Department of Transport for £14.22m which incorporates HCC match funding support of £2m. The bid encompasses three elements of essential maintenance:
• Repairs and strengthening of Sculcoates Bridge • Strengthening of the Green Lane (High Flags Outfall) structure on Wincolmlee • Subsequent resurfacing of Wincolmlee due to structural failure.
G – Carbon Neutral 2030
To achieve the 2030 carbon neutral target for the city and decarbonisation aims of the Local Industry Strategy. Contribute to the city installed renewable energy targets.
Corporate Electric Vehicle Infrastructure Programme
To install 34 electric vehicle infrastructure points at corporate sites to facilitate electric vehicle penetration in the fleet.
Corporate Roof Top Solar Programme
To install roof top solar panels up to 1MW on all suitable Council building roofs including battery storage where suitable.
Corporate Wind Turbine Programme
To install up to 2 x 4.2MW wind turbines and battery storage facility on Council owned land to generate renewable energy for supply into the electricity grid and generate an income stream for the Council.
Green Bus Project
To provide 50% match funding to install 8 x 7kW electric vehicle charging points at Hull Interchange for use by rail travellers and the sharing of charging income profits
Corporate Parking Space Solar Programme
To install 1MW of energy generation through the installation of solar canopies on all Council owned surface parking spaces
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Hull Interchange Bus Electrification Infrastructure Programme
To support the installation of electric vehicle infrastructure at Hull Interchange to facilitate the take up of electric buses by the current operators in the city.
H – Childrens Homes Backlog Maintenance
Additional investment proposed to support essential backlog maintenance across the current portfolio of Childrens’ Homes, to include external roof repairs and internal repairs and refurbishments of toilets and bathrooms.
I – Childrens Homes Reprovision
Re-provisioning the disability short breaks overnight residential service for children 4 to 18 who have multiple learning disabilities, complex health needs and associated physical and sensory special needs, in order to support families in the caring task.
J – Corporate Buildings Maintenance/Health and Safety
Continuation of the annual funding stream to support prioritisation of repairs based on ensuring health and safety and other statutory compliance and service need. Further additional targeted funding is also proposed to support backlog maintenance and to support priority health and safety works and improvements required to corporate and public buildings.
K – Disabled Facilities Grant
Estimated annual ring fenced grant allocation for 2021/22 to support means tested mandatory grants to provide adaptations to enable disabled private residents to live independently at home.
L – Highways Maintenance
To design and deliver a comprehensive city wide cycle network. The City already has an extensive cycle network but it is difficult to navigate, is inconsistent in appearance and has gaps at critical locations. The core and secondary cycle network routes are currently being identified (work to complete in March 2020) alongside a list of ‘quick wins’ and a prioritised list of interventions that will form the long term investment plan. The additional funding allocation for 2020/21 will start to deliver the investment plan and a number of quick wins (the exact nature and locations of the schemes are still to be identified). The initial focus will be on the core network. The identified network and investment plan proposals will be reported to Cabinet in March.
A funding bid has been submitted to the Department for Transport for £4.951m (grant £3.951m, HCC £1m) to deliver repairs to sections of the key route network that are have structurally failed over significant lengths, including resurfacing over full lengths of each route and refurbishment and repairs to associated footways and cycle paths. Repairs are urgent and cannot be funded through the annual block allocation as the predicted costs exceed the yearly allocation by a significant amount.
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The proposals include full depth structural repairs to sections of each route that are red category, with surfacing repairs to the remainder of each route to ensure surface consistency, safety of operations and an improved user experience.
The key sections of the network include: 1. A165 Holderness Road – Witham to Southcoates Lane – a Category 2 strategic route. 2. A1105 Anlaby Road – Walton Street to City Boundary – a Category 3A Main Distributor road. 3. Hessle Road – Hawthorn to Rawling Way – a Category 3b Secondary Distributor road.
M – High Street
Following a successful first stage application, the Council is currently developing detailed plans for the Future High Street Fund scheme that will secure up to £22m of government investment in the city centre, focusing on Whitefriargate. The regeneration proposals include the repurposing of blocks of buildings on the street to deliver new commercial office space and residential units in line with the objectives of the Hull Local Plan. A new business support, cultural and learning facility will also be established to bring in additional footfall, increase dwell time and support the diversification of the traditional retail offer. The programme of regeneration works will be delivered between 20/21 and 23/24 and will require a Council match funding commitment of £1.2m.
N – High Street/Queen Street
The scheme will deliver environmental improvements that will support increased pedestrian and cycle movements arising from new development on Blackfriargate and the delivery of the A63 Castle Street scheme. The scheme will deliver footpath widening and surface improvements, carriageway resurfacing, traffic calming measures, pedestrian crossing facilities on Humber Street and Queen Street, junction realignment and reprioritisation of movements at the Queen Street/Humber Street junction.
O – Housing Revenue Account
Reflects the updated HRA capital investment plans as per the Housing Revenue Account Budget Setting 2020/21 and Beyond Report.
P – ICT
The continuation of the annual funding stream to support priority ICT network and infrastructure works to ensure they remain robust and fit for purpose.
Plus additional funding to complement the existing ICT programme allocations to support of key priorities, including:
• Desktop refresh – continued funding to support the rolling replacement of aging and out of support PC’s, increasing reliability and reducing support costs.
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• Microsoft Licensing – updating the PC systems from windows 7 (which goes out of support in January 2020) to windows 10. Rolling out Office 365 which will deliver the tools for more effective working including collaborative working, agile and remote working and support the Work Smart programme. • Unified Comms – delivering an integrated service providing a set of communication products that provides a consistent unified user interface and user experience across multiple devices and media communications to optimize business processes and increase user productivity. • Renewals, upgrades and specific projects – ongoing modernisation of existing software and hardware to ensure it remains fit for purpose. Provides capacity to consider new digital investments to improve service delivery through digital solutions and innovations.
Q – ICT Migration to Cloud
To deliver cloud technologies to improve the current ICT provision and digitally transform the way the Council delivers its services. This will enable the use of technology to delivery of more effective services, a better customer experience and support by data driven decision making. The empowerment of employees by supporting new ways of working including mobile, agile and collaborative working. Utilising new technical solutions to improve operational efficiency. The programme is subject to approval of a detailed business case outlining key workstreams and timelines.
R – Investment in Museums
Reflects the element of private contributions and funding raising required to support the delivery of the overall project.
S – Library Equipment
Continuation of the annual funding steam to support the purchase of resources, both physical and electronic, to enable the Council to provide a comprehensive and efficiency library service.
T – Local Community Initiatives
Provides capital for each ward to support community based projects which improve local facilities, support Council priorities and improve the quality of life for local residents. The funding stream is a continuation of the current programme allocation for one further year.
U – Multi Storey Car Parks
Additional funding required to support essential maintenance at Pryme Street MSCP.
V – Parks
The continuation of the annual funding steam to support the ongoing maintenance of the City’s parks and open spaces.
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W – Pearson Park Road
The project to restore Pearson Park using grant funding from the National Lottery Heritage Fund is currently being delivered on site. In order to provide extra value to the restoration works and help to improve the physical condition of the site’s heritage, additional improvements are being made to the highway the encircles the central grass area of the park. This involves improvements to the drainage and resurfacing of the perimeter road. Undertaking the highways improvement work at the same time as the NLHF funded scheme will provide a joined-up solution to the existing highways design and drainage issues and will deliver greater value from the £3m investment committed by the lottery.
X – Private Sector Housing
Continuation of the annual funding stream to tackle category one hazards in privately owned homes through local assistance.
Plus additional targeted funding into areas with poor quality private sector stock has been provided on top of the annual allocation.
Y – S106 Funded Schemes
Ringfenced funding to support Area and Community based schemes as agreed through the Area Committee framework.
Z – Transformation Costs
£3m has been identified to meet Transformational costs within CYPS, including £1m earmarked to support fostering and adoption initiatives, to be funded from capital receipts flexibility.
12. Risk Assessment
12.1 The Capital Strategy is compiled in line with the requirements of the 2018 CIPFA Prudential Code and 2018 Treasury Management Code.
12.2 The S151 Officer views the strategy to be prudent and affordable and is fully integrated with the Council’s Medium Term Financial Plan, Treasury Management Strategy and other Strategic Plans.
12.3 All proposed schemes contained within the body of the report and at Appendix A, are subject to a full risk assessments and ongoing monitoring.
13. Consultation
13.1 In developing the Capital Strategy and the Capital Programme for 2020/21 to 2022/23, the Council regularly seeks the views of residents and partners on the priorities for investment, service provision and improvement. This is completed through a variety of means to enable participation in the process.
13.2 Consultation will also be undertaken for specific programmes or individual schemes where appropriate.
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14. Comments of the Town Clerk (Monitoring Officer)
14.1 The Prudential Code promotes as a matter of good practice that the Capital Strategy be presented to Council as a separate strategy document to the budget report. The Council’s Auditors, both internal and external, properly expect that the Council follow the code.
14.2 In so doing the Capital Strategy should be adopted by the Council as part of the Council’s policy framework within the Constitution.
15. Comments of the Section 151 Officer
15.1 The Director of Finance and Transformation (S151 Officer) is the author of the report. The proposed programme is in line with the strategy and the revenue funding implications are consistent with the capital financing projections included in the revenue budget and MTFP.
16. Comments of the HR City Manager and Compliance with the Equality Duty
16.1 There are no staffing issues arising from the report. The capital schemes will require and equality impact assessment to be completed.
17. Comments of the Overview and Scrutiny
17.1 This report will be considered by the Finance and Value for Money Overview and Scrutiny Commission at its Budget meeting of Friday, 24 January, 2020. Any comments or recommendations agreed at the meeting will be tabled at January Cabinet for consideration alongside the report. (Ref. Sc5694)
David Bell Director of Finance and Transformation (S151 Officer)
Background Documents: CIPFA Prudential Code and Treasury Management Code of Practice (2018) Local Authorities (Capital Finance and Accounting) (England) (Amendment) Regulations 2008 Medium Term Financial Plan, Housing Revenue Account and Capital Programme – Update and proposals for consultation December 2019 Capital Programme Monitoring Reports 2019/20 Corporate Plan 2018-22
Officer Interest None
Contact Officer: David Bell/Mike Armstrong Telephone No.: 613084/613282
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Implications Matrix
I have informed and sought advice from HR, Yes Legal, Finance, Overview and Scrutiny and the Climate Change Advisor and any other key stakeholders i.e. Portfolio Holder, relevant Ward Members etc prior to submitting this report for official comments I have considered whether this report requests a Yes decision that is outside the Budget and Policy Framework approved by Council Value for money considerations have been Yes accounted for within the report
The report is approved by the relevant City Yes Manager I have included any proc n/a urement/commercial issues/implications within the report I have considered the potential media interest in Yes this report and liaised with the Media Team to ensure that they are briefed to respond to media interest. I have included any equalities and diversity There are no equality and diversity implications within the report and where implications within the report necessary I have completed an Equalities Impact Assessment and the outcomes are included within the report Any Health and Safety implications are included n/a within the report Any human rights implications are included within There are no human rights implications the report within the report I have included any community safety n/a implications and paid regard to Section 17 of the Crime and Disorder Act within the report I have liaised with the Climate Change Advisor n/a and any environmental and climate change issues/sustainability implications are included within the report I have included information about how this report Yes contributes to the City Plan/ Area priorities within the report
Page 18 of 18 Page 264 of 324 Capital Programme 2020/21 - 2022/23 Appendix A Possible Memo
Assumed Total Total External Future Revised Revised Revised Revised Change Funding Commitment Programme 2020/21 2021/22 2022/23 Bids 2023/24+ Total Ref £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Corporate Services ACFS System Refresh Project 110 229 0 339 0 0 0 0 Agile Working/Work Smart 2,100 0 0 2,100 0 0 0 0 Customer Enablement 337 0 0 337 0 0 0 0 Digital Programme 502 0 0 502 0 0 0 0 ICT - Migration to Cloud Q 1,509 2,078 1,219 4,806 4,806 0 0 0 ICT Infrastructure P 2,996 2,610 2,670 8,276 5,176 0 0 0
Culture, Leisure and Tourism Albert Avenue Baths C 1,400 1,800 0 3,200 2,000 0 0 0 Beverley Road Baths D 2,200 400 0 2,600 1,500 0 0 0 Ice Arena Gas Refrigeration 100 0 0 100 0 0 0 0 Library Equipment Resources S 400 400 400 1,200 400 0 0 0 Parks V 200 200 200 600 200 0 0 0 Parks - East Park, Pickering Park Aviary 500 0 0 500 0 0 0 0
Economic Investment, Regeneration & Planning, Land & Property Boulevard UFE Phase 4 1,150 75 0 1,225 0 0 0 0 Building Optimisation Programme 1,318 0 0 1,318 0 0 0 0 Carbon Neutral 2030 G 1,120 3,850 13,250 18,220 18,220 0 0 0 City Hall Shops 75 0 0 75 0 0 0 0 Corporate Operational Buildings Maintenance (inc H&S) J 4,650 2,000 2,000 8,650 6,500 0 0 0 Guildhall Roof 700 0 0 700 0 0 0 0 Multi Storey Car Parks (feasibility/refurbishment) 308 60 0 368 0 0 0 0 Pryme Street MSCP U 250 0 0 250 250 0 0 0 Wilson Centre Air Conditioning 200 0 0 200 0 0 0 0
Housing HRA: Council House Adaptations O 2,700 2,583 2,680 7,963 2,059 0 0 0 Empty Properties O 1,068 0 0 1,068 1,068 0 0 0 High Rise Fire Protection Works O 5,041 6,699 4,444 16,184 6,715 0 0 0 Housing Regeneration Schemes O 344 311 325 980 531 0 0 0 New Build O 11,308 22,645 25,840 59,793 19,019 0 0 0 Maintaining Decent Homes O 10,270 8,233 8,208 26,711 6,097 0 0 0 Mechanical and Electrical O 5,695 4,545 4,504 14,744 3,338 0 0 0 KWL Overheads O 2,400 2,479 2,571 7,450 1,972 0 0 0 Others (inc.client costs) O 1,460 1,514 1,579 4,553 1,214 0 0 0 RTB Grant O 729 1,000 500 2,229 1,229 0 0 0 Solid Wall Insulation O 12,258 13,865 10,157 36,280 7,420 0 0 0
Hull Neighbourhood Renewal Programme: Ings 505 0 0 505 0 0 0 0 Newington & St Andrews Programme 144 0 0 144 0 0 0 0 Preston Road 1,420 0 0 1,420 0 0 0 0 Priority Neighbourhoods Frontages X 2,508 2,500 500 5,508 3,300 0 0 0 0 0 0 Disabled Facilities Grant K 2,961 2,200 2,200 7,361 2,200 0 0 0 Private Sector Housing X 800 500 750 2,050 750 0 0 0
Learning, Skills & Safeguarding Children Children's Homes Reprovision I 839 400 0 1,239 800 0 0 0 Children's Homes Backlog Maintenance H 500 0 0 500 500 0 0 0 Investment in Schools (PCP/BSF) 283 0 0 283 0 0 0 0 Schools Maintenance and Improvement Programme B 8,202 4,000 4,000 16,202 4,000 0 0 0 Special Provision Fund - SEN 288 0 0 288 0 0 0 0 Service Transformation Costs Z 3,000 0 0 3,000 3,000 0 0 0
Neighbourhood, Communities & Environment Green Space/Area Based Projects (S106) Y 1,000 1,000 0 2,000 1,000 0 0 0 Local Community Initiatives T 1,000 1,000 1,000 3,000 1,000 0 0 0 Traveller Sites 1,250 0 0 1,250 0 0 0 0
Operational Services Bridge Maintenance F 12,470 2,000 0 14,470 14,220 12,220 0 12,220 City Coach Park 180 0 0 180 0 0 0 0 CCTV Camera Replacement 300 0 0 300 0 0 0 0 Cycling Network Improvements L 500 450 0 950 950 0 0 0 High Street Regeneration M 3,600 14,600 5,000 23,200 23,200 22,000 0 22,000 High Street/Queen Street N 1,000 250 0 1,250 1,250 0 0 0 Highways Estate Maintenance/Verges L 500 0 0 500 500 0 0 0 Highways Projects A&L 9,551 7,451 4,000 21,002 8,951 3,951 0 3,951 Highways Scheme Development 350 0 0 350 0 0 0 0 Park and Ride 230 0 0 230 0 0 0 0 Pearson Park Road W 300 0 0 300 300 0 0 0 Wawne View/Kingswood AAP 1,800 2,780 0 4,580 0 0 0 0
Sub Total 130,879 116,707 97,997 345,583 155,635 38,171 0 38,171
Page 265Page 1 of 324 Capital Programme 2020/21 - 2022/23 Appendix A Possible Memo
Assumed Total Total External Future Revised Revised Revised Revised Change Funding Commitment Programme 2020/21 2021/22 2022/23 Bids 2023/24+ Total Ref £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Hull World Class Visitor Destination Programme 2017 Priority Programme: Beverley Road Heritage Investment E 1,000 597 0 1,597 597 0 0 0 Beverley Road 52a-54 Brunswick Arcade 342 0 0 342 0 0 0 0 Dance Studio 50 0 0 50 0 0 0 0 District Heating (feasibility) 0 17,000 0 17,000 0 0 0 0 Guildhall Timeball 123 0 0 123 0 0 0 0 Heart of the City Regeneration (Albion Street) 602 0 0 602 0 0 0 0 Heritage Action Zone 179 0 0 179 0 0 0 0 Pearson Park Heritage Investment 1,745 0 0 1,745 0 0 0 0
2017 Legacy Programme: Investment in Museums R 10,650 10,598 6,100 27,348 2,700 0 0 0 Riverside Berth/Cruise Terminal 200 638 0 838 0 0 42,700 42,700 Queens Gardens 3,800 0 0 3,800 0 0 0 0
Sub Total 18,691 28,833 6,100 53,624 3,297 0 42,700 42,700
PROGRAMME TOTAL 149,570 145,540 104,097 399,207 158,932 38,171 42,700 80,871
Sources of Funding Revised Revised Revised Total Total 2020/21 2021/22 2022/23 Revised Change Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Specific Grants (e.g. DFC, DFG) 34,579 23,446 9,100 67,125 43,668 38,171 35,000 73,171 Annual Grants (e.g. Education and Transport) 13,893 8,500 7,500 29,893 8,500 0 0 0 Capital Receipts 8,962 3,030 0 11,992 4,250 0 0 0 Borrowing 35,363 36,052 23,289 94,704 51,352 0 7,700 7,700 Revenue Contributions 500 2,500 2,500 5,500 5,500 0 0 0 NNDR Uplift re Enterprise Zones 3,000 8,138 900 12,038 -5,000 0 0 0 HRA (grant, capital receipts, revenue, borrowing) 53,273 63,874 60,808 177,955 50,662 0 0 0 TOTAL 149,570 145,540 104,097 399,207 158,932 38,171 42,700 80,871
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Report to:
Finance and Value for Money Overview and Scrutiny Commission – 24 January 2020 Wards All Cabinet – 27 January 2020 Council – 27 February 2020
Treasury Management Strategy Statement, Minimum Revenue Provision Policy Statement and Annual Investment Strategy 2020-21
Report of the Director of Finance and Transformation (S151 Officer)
This item is not exempt Therefore exempt reasons are not applicable
This is a Non-Key Decision
1. Purpose of the Report and Summary
1.1 To provide details of the Treasury Management Strategy Statement (incorporating Prudential and Treasury Indicators), Minimum Revenue Provision Policy Statement and Annual Investment Strategy proposed for the financial year 2020-21.
1.2 The Council’s constitution requires that the Strategy and Policy Statements be approved by Council and this responsibility cannot be delegated.
1.3 The scope and content of this report are in line with the requirements of the Treasury Management Code of Practice and the Prudential Code for Capital Finance, therefore there needs to be more detail included than standard committee reports.
1.4 Due to the nature and complexity of this report, an overview is provided at Appendix 6 which provides Members of the Council with a summary of the main contents of the report. A Glossary of Terms is also included at Appendix 7.
2. Executive Summary
2.1 Treasury Management is an important part of the finance function of the Council. Under the Prudential Regime, the Council has greater freedom with regard to borrowing and investment decisions and the Prudential Indicators provide an important monitoring framework.
2.2 Through the Council’s Borrowing and Investment Strategies, the Director of Finance and Transformation will seek to minimise borrowing costs and maximise investment income whilst controlling the Council’s exposure to financial risk. Page 267 of 324
2.3 The Government guidance issued regarding repayment of debt on borrowings (Minimum Revenue Provision) provides the Council with the ability to set realistic levels of provision for the repayment of debt. It is proposed that the Council amends the current Minimum Revenue Provision Policy Statement from 2019/20. Appendix 4 details the revised MRP Policy Statement.
2.4 This report reaffirms the overall Treasury Management Strategy in place and proposes no changes in 2020/21 to the Treasury Management Strategy Statement, Borrowing and Investment Strategies.
3. Recommendations
3.1 That Council approves;
i. The Prudential and Treasury Indicators, as set out in the main body of this report and summarised at Appendix 1, numbered 1 to 9; ii. The Treasury Management Strategy Statement 2020-21, incorporating the Annual Investment Strategy 2020-21, as set out in the main body of this report, and specifically; iii. The Investment Instruments shown at Appendix 2; iv. The list of organisations used for the on-lending of surplus funds, shown at Appendix 3, up to the monetary limits stated; v. The Minimum Revenue Provision Policy Statement 2020-21 detailed at Appendix 4.
4. Reasons for Recommendations
4.1 Approval of the annual Treasury Management Strategy and Policy Statements cannot be delegated and therefore is required to be approved by Full Council.
5. Impact on other Executive Committees (including Area Committees)
5.1 This report has no impact on other Executive Committees.
6. Introduction
6.1 The Council is required to operate a balanced budget, which broadly means that cash raised during the year will meet cash expenditure. Part of the treasury management operation is to ensure that this cash flow is adequately planned, with cash being available when it is needed. Surplus monies are invested in low risk counterparties or ‘instruments’ commensurate with the Council’s low risk appetite, providing adequate liquidity initially before considering investment return.
6.2 The second main function of the treasury management service is the funding of the Council’s capital plans. These capital plans provide a guide to the borrowing need of the Council, essentially the longer term cash flow planning to ensure that the Council can meet its capital spending obligations. This management of longer term cash may involve arranging long or short term loans, or using longer term cash flow surpluses. On occasion any debt previously drawn may be restructured to meet Council risk or cost objectives.
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6.3 The contribution the treasury management function makes to the authority is critical, as the balance of debt and investment operations ensure liquidity or the ability to meet spending commitments as they fall due, either on day-to- day revenue or for larger capital projects. The treasury operations will see a balance of the interest costs of debt and the investment income arising from cash deposits affecting the available budget. Since cash balances generally result from reserves and balances, it is paramount to ensure adequate security of the sums invested, as a loss of principal will in effect result in a loss to the General Fund Balance.
6.4 Whilst any commercial initiatives or loans to third parties will impact on the treasury function, these activities are generally classed as non-treasury activities, (arising usually from capital expenditure) and are separate from the day to day treasury management activities.
6.5 CIPFA defines treasury management as:
“The management of the local authority’s borrowing, investments and cash flows, its banking, money market and capital market transactions; the effective control of the risks associated with those activities; and the pursuit of optimum performance consistent with those risks.”
7. Statutory Requirements
7.1 The Local Government Act 2003 (the Act) and supporting regulations requires the Council to ‘have regard to’ the CIPFA Prudential Code and the CIPFA Treasury Management Code of Practice to set Prudential and Treasury Indicators for the next three years to ensure that the Council’s capital investment plans are affordable, prudent and sustainable. These are shown in the report and are summarised in Appendix 1.
7.2 The Act therefore requires the Council to set out its Treasury Strategy for borrowing and to prepare an Annual Investment Strategy (as required by Investment Guidance subsequent to the Act and included in section 21 of this report); this sets out the Council’s policies for managing its investments and for giving priority to the security and liquidity of those investments as set out in Appendices 2 and 3. The ongoing turbulence in the international financial markets over the last few years highlights the importance of a robust and fully risk assessed strategy.
8. CIPFA Requirements
8.1 The Chartered Institute of Public Finance and Accountancy’s (CIPFA) Code of Practice on Treasury Management (revised 2017) was adopted by the Council on 25 February 2010.
8.2 The five primary requirements of the Code are as follows:
1. Creation and maintenance of a Treasury Management Policy Statement which sets out the policies and objectives of the Council’s treasury management activities.
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2. Creation and maintenance of Treasury Management Practices which set out the manner in which the Council will seek to achieve those policies and objectives.
3. Receipt by the full Council of an annual Treasury Management Strategy Statement - including the Annual Investment Strategy and Minimum Revenue Provision Policy - for the year ahead, a Mid-year Review Report and an Annual Report (stewardship report) covering activities during the previous year.
4. Delegation by the Council of responsibilities for implementing and monitoring treasury management policies and practices and for the execution and administration of treasury management decisions. 5. Delegation by the Council of the role of scrutiny of treasury management strategy and policies to a specific named body.
8.3 The Council is required to receive and approve, as a minimum, three main reports each year, which incorporate a variety of polices, estimates and actuals. These reports are required to be adequately scrutinised by committee. This role is undertaken by the Finance and Value for Money Overview and Scrutiny Commission.
8.4 Prudential and Treasury Indicators and Treasury Strategy which covers:
• The Council’s capital plans (including prudential indicators); • A Minimum Revenue Provision (MRP) Policy (how residual capital expenditure is charged to revenue over time); • The Treasury Management Strategy (how investments and borrowings are to be organised) including treasury indicators; • An investment strategy (the parameters on how investments are to be managed).
8.5 A Mid-Year Treasury Management Report – this will update members with the progress of the capital position, amending prudential indicators as necessary, and whether any policies require revision.
8.6 An Annual Treasury Report – this is a backward looking review document and provides details of a selection of actual prudential and treasury indicators and actual treasury operations compared to the estimates within the strategy.
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8.7 The Council has adopted the following scheme of delegation and reporting arrangements in accordance with the requirements of the Code:-
Authority/ Area of Responsibility Frequency Committee/ Officer Treasury Management Strategy / Annual Annually before the start of the Full Council Investment Strategy / MRP year policy Treasury Management Strategy / Annual Cabinet Mid year Investment Strategy / MRP policy – midyear report Treasury Management Strategy / Annual Investment Strategy / MRP Cabinet As necessary policy – updates or revisions at other times Annual Treasury Outturn Annually by 30 September Cabinet Report after the end of the year Director of Finance & Treasury Management Prudential Indicators to be Transformation (S151 Monitoring Reports monitored periodically Officer) Director of Finance & Treasury Management Transformation (S151 Updated on an ongoing basis Practices Officer) Scrutiny of Treasury Finance and Value for Management Strategy / Annually before the start of the Money Overview & Annual Investment year Scrutiny Commission Strategy / MRP policy Finance and Value for Scrutiny of treasury At outturn and mid-year Money Overview & management performance monitoring reports Scrutiny Commission
9. Treasury Management Policy Statement 2020-21
9.1 The Treasury Management Policy Statement recommended for adoption defines the policies and objectives of the Council’s treasury management activities:
This organisation defines its treasury management activities as:
• The management of the local authority’s investments and cash flows. Its banking, money market and capital market transactions; the effective control of the risks associated with those activities; and the pursuit of optimum performance consistent with those risks.
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• This organisation regards the successful identification, monitoring and control of risk to be the prime criteria by which the effectiveness of its treasury management activities will be measured. Accordingly, the analysis and reporting of treasury management activities will focus on their risk implications for the organisation, and any financial instruments entered into to manage those risks.
• This organisation acknowledges that effective treasury management will provide support towards the achievement of its business and service objectives. It is therefore committed to the principles of achieving value for money in treasury management, and to employing suitable comprehensive performance measurement techniques, within the context of effective risk management.
10. Treasury Management Strategy for 2020-21
10.1 The proposed strategy for 2020-21 in respect of the following aspects of the treasury management function is based upon the treasury officers’ views on interest rates, supplemented with leading market forecasts provided by the Council’s treasury management advisors, Link Asset Services.
10.2 The strategy for 2020-21 covers two main areas:
Capital Issues • the capital expenditure plans and the prudential indicators; • the Minimum Revenue Provision (MRP) policy.
Treasury Management Issues • the current treasury position; • treasury indicators which will limit the treasury risk and activities of the Council; • prospects for interest rates; • the borrowing strategy; • policy on borrowing in advance of need; • debt rescheduling; • the investment strategy; • creditworthiness policy; and • the policy on use of external service providers.
10.3 These elements cover the requirements of the Local Government Act 2003, the CIFPA Prudential Code, the Ministry of Housing Communities and Local Government (MHCLG) MRP Guidance, the CIPFA Treasury Management Code and the MHCLG Investment Guidance.
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11. The Capital Prudential Indicators 2020-21 – 2022-23
11.1 The Council’s capital expenditure plans are the key driver of treasury management activity. The outputs of the capital expenditure plans are reflected in prudential indicators, which are designed to assist Members’ overview and confirm capital expenditure plans.
11.2 Capital Expenditure – this prudential indicator is a summary of the Council’s capital expenditure plans, both those agreed previously, and those forming part of this budget cycle. Capital expenditure forecasts are summarised in the table below:
2018/19 2019/20 2020/21 2021/22 2022/23 Capital Expenditure by Programme Actual Estimate Estimate Estimate Theme Estimate £m £m £m £m £m Adult Services and Public Health 0.164 0.122 0.000 0.000 0.000 Corporate Services 7.964 8.669 7.554 4.917 3.889 Culture, Leisure and Tourism 0.701 3.769 4.800 2.800 0.600 Economic Investment, Regeneration and 4.207 12.594 9.771 5.985 15.250 Planning, Land and property Housing 5.384 7.661 8.338 5.200 3.450 Learning, Skills and Safeguarding 4.856 10.708 13.112 4.400 4.000 Children Neighbourhood and Communities 3.071 5.962 3.250 2.000 1.000 Operational Services 7.918 16.387 30.781 27.531 9.000 Hull World Class Visitor Destination 11.434 17.203 18.691 28.833 6.100 Other (LGF/Growing Places) 21.843 0.000 0.000 0.000 0.000 Non-HRA 67.542 83.075 96.297 81.666 43.289 HRA 32.903 32.137 53.273 63.874 60.808 Total 100.445 115.212 149.570 145.540 104.097
11.3 The above and below tables include other long term liabilities, such as Private Finance Initiative (PFI) and leasing arrangements which have their own borrowing instruments.
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11.4 The table below summarises the above capital expenditure plans and how these plans are being financed by capital or revenue resources. Any shortfall of resources results in a funding borrowing need.
2018/19 2019/20 2020/21 2021/22 2022/23
Capital Expenditure Actual Estimate Estimate Estimate Estimate £m £m £m £m £m Non-HRA 67.542 83.075 96.297 81.666 43.289 HRA 32.903 32.137 53.273 63.874 60.808 Total 100.445 115.212 149.570 145.540 104.097 Financed by: Capital receipts 5.775 14.915 13.773 9.260 4.847 Capital grants 38.001 37.737 51.768 32.846 16.600 Capital reserves 27.033 26.013 26.844 27.546 28.444 Revenue 0.417 5.212 3.500 10.638 3.400 Net financing need for the year 29.219 31.335 53.685 65.250 50.806
12. The Council’s Borrowing Need (the Capital Financing Requirement)
12.1 The second prudential indicator is the Council’s Capital Financing Requirement (CFR). The CFR is simply the total historic outstanding capital expenditure which has not yet been paid for from either revenue or capital resources. It is essentially a measure of the Council’s underlying borrowing need. Any capital expenditure above, which has not immediately been paid for, will increase the CFR.
12.2 The CFR does not increase indefinitely, as the minimum revenue provision (MRP) is a statutory annual revenue charge which broadly reduces the borrowing need in line with each assets life, and so charges the economic consumption of capital assets as they are used.
12.3 The CFR includes any other long term liabilities (e.g. PFI schemes, finance leases) brought onto the balance sheet. Whilst this increases the CFR, and therefore the Council’s borrowing requirement, these types of scheme include a borrowing facility and so the Council is not required to separately borrow for these schemes. The Council currently has £173 million of such schemes within the CFR.
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12.4 The Council is asked to approve the CFR projections below:
2018/19 2019/20 2020/21 2021/22 2022/23 Actual Estimate Estimate Estimate Estimate £m £m £m £m £m Capital Financing Requirement CFR – non housing 589.614 608.888 639.011 665.323 678.217 CFR - housing 242.441 239.322 237.027 253.185 271.801 Total CFR 832.055 848.210 876.038 918.508 950.018 Movement in CFR -0.092 16.155 27.828 42.470 31.510
Movement in CFR represented by Net financing need for the year (above) 29.219 31.335 53.685 65.250 50.806 - General CapEx - PFI liabilities Less MRP/VRP and other 29.311 15.180 25.857 22.780 19.296 financing movements Movement in CFR -0.092 16.155 27.828 42.470 31.510
13. Minimum Revenue Provision (MRP) Policy Statement
Background
13.1 Capital expenditure is generally expenditure on assets which have a life expectancy of more than one year e.g. buildings, vehicles, machinery etc. In accordance with proper practice, the financing of such expenditure is spread over several years in order to try to match the years over which such assets benefit the local community through their useful life. The Council is therefore required to pay off an element of the accumulated General Fund capital spend each year (the CFR) through a revenue charge (the minimum revenue provision - MRP), although it is also allowed to undertake additional voluntary payments if required (voluntary revenue provision – VRP), which is determined by the Council under guidance.
13.2 The Local Authorities (Capital Finance and Accounting) (England) Regulations 2003 (as amended by Statutory Instrument 2008 no. 414 s4) lay down that:
“A local authority shall determine for the current financial year an amount of minimum revenue provision that it considers to be prudent.”
13.3 For balance sheet liabilities relating to finance leases and on balance-sheet PFI contracts, the MRP Guidance suggests that the requirement to make prudent MRP would be regarded as met by a charge equal to the element of the rent/charge that goes to reduce the Balance Sheet liability. This is the Council’s current policy and has the effect that the total charge to revenue is equal to the actual rentals paid for the year.
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13.4 As at 31/3/19 the Council currently holds £173m of PFI Finance Lease Liabilities on the Balance, incorporating Schools (BSF) and Extra Care Facilities.
13.5 However, the key principle of MRP is that the annual amount set aside should be prudent. The relevant regulations state that Local Authorities are required to have regard to the MRP guidance when setting MRP Policy. The guidance gives flexibility in how it calculates MRP, providing the calculation is deemed prudent.
Government Guidance
13.6 The Council is legally obliged to ‘have regard’ to the guidance issued by MHCLG, which is intended to enable a more flexible approach to assessing the amount of annual minimum revenue provision (MRP) than was required under the previous statutory requirements. Although it is up to each Council to determine for itself how to calculate MRP, the guidance suggests four methodologies, with an overriding recommendation that the Council should make prudent provision to redeem its debt liability over a period which is reasonably commensurate with that over which the capital expenditure is estimated to provide benefits.
13.7 The requirement to ‘have regard’ to the guidance means that:
• Although four main options are recommended in the guidance, there is no intention to be prescriptive by making these the only methods of charge under which a local authority may consider its MRP to be prudent. • It is the responsibility of each authority to decide upon the most appropriate method of making a prudent provision after having had regard to the guidance
13.8 The current method of charging MRP on the PFI liability is based on the life of the PFI contract, i.e. 25 years.
Proposal
13.9 A further review of the MRP policy has identified that for PFI schemes, the council could prudently account for MRP over the life of the assets which it is acquiring, rather than over the life of the PFI scheme. This brings the policy on charging MRP for debt on PFI schemes into line with the policy for MRP on conventional borrowing.
13.10 Therefore for PFI liabilities, an MRP charge is proposed to be calculated on the basis of the expected life of the asset which has been acquired, using the same annuity basis as is used for general borrowing.
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Impact of Proposal
13.11 Although this change in Policy will lengthen the period over which the MRP charge is made, it is still prudent as it will better match the set aside period with the service potential of the assets. The change means that council tax payers will be charged for the cost of these buildings over the full period of time for which they are expected to be in use.
13.12 With regard to the charges for 2019/20 and going forward the schedule at Appendix 5 details the variation between the projected charges under the current and the revised methodologies. The proposal would reduce charges in every year up until 2041/42 from which point charges would be higher than under the current proposal. However, discounting these to their present value demonstrates the relatively immaterial increase in costs in later years, as it should be recognised that inflation will substantially erode the real value of these costs from 2042/43 onwards.
13.13 The Council’s proposed change for the PFI schemes is considered to be prudent. As reasonably newly constructed assets, that all considerably well maintained as part of the contract, the asset life would be at least 60 years. Therefore, it would appear to be reasonable for the Council to provide for its PFI on the same basis, by charging MRP on an annuity basis as from 2019- 20.
13.14 The Council’s S151 Officer considers that this approach is prudent, and it therefore complies with the Council’s statutory duties in respect of MRP, because:
• The cumulative amount of MRP at the end of the useful life of all assets will be exactly the same under this methodology as it would have been using the previous approach. • The time value of money and the likely increase in benefits in later years mean that this approach is fairer, as the Council’s budget would be bearing a higher burden of MRP than necessary or would have been paid under the annuity/asset life method. • The revised method of calculating MRP on an annuity basis is considered both more prudent, as the annuity/asset life method better reflects the flow of benefits from assets, as benefits generally increase in later years.
13.15 The Council’s revised MRP Policy Statement is detailed at Appendix 4.
14. Affordability Prudential Indicators
14.1 The previous sections cover the overall capital and control of borrowing prudential indicators, but within this framework prudential indicators are required to assess the affordability of the capital investment plans. These provide an indication of the impact of the capital investment plans on the Council’s overall finances. The Council is asked to approve the following indicators.
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14.2 The ratio of financing costs to net revenue stream. This indicator identifies the trend in the cost of capital (borrowing and other long term obligation costs net of investment income) against the net revenue stream.
2018/19 2019/20 2020/21 2021/22 2022/23 Actual Estimate Estimate Estimate Estimate % % % % % Non-HRA 2.7 2.9 2.7 4.5 4.6 HRA 35.3 56.4 35.0 35.1 35.8
The estimates of financing costs include current commitments and the proposals in the budget report.
14.3 The incremental impact of capital investment decisions on council tax. This indicator identifies the revenue costs associated with proposed changes to the three year capital programme recommended in the budget report compared to the Council’s existing approved commitments and current plans. The assumptions are based on the budget, but will invariably include some estimates, such as the level of Government support, which are not published over a three year period.
Incremental impact of capital investment decisions on the band D council tax
2018/19 2019/20 2020/21 2021/22 2022/23 Actual Estimate Estimate Estimate Estimate £m £m £m £m £m Council tax - band 1.91 2.58 2.87 8.67 13.42 D
14.4 The incremental impact of capital investment decisions on housing rent levels. Similar to the council tax calculation, this indicator identifies the trend in the cost of proposed changes in the housing capital programme recommended in this budget report compared to the Council’s existing commitments and current plans, expressed as a discrete impact on weekly rent levels. This indicator shows the revenue impact on any newly proposed changes, although any discrete impact will be constrained by rent controls.
Incremental impact of capital investment decisions on housing rent levels
2018/19 2019/20 2020/21 2021/22 2022/23 Actual Estimate Estimate Estimate Estimate £m £m £m £m £m Weekly housing 0.01 0.26 0.54 1.42 2.79 rent levels
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15. Treasury Management Strategy
15.1 The capital expenditure plans set out in Section 11 provide details of the service activity of the Council. The treasury management function ensures that the Council’s cash is organised in accordance with the relevant professional codes, so that sufficient cash is available to meet this service activity. This will involve both the organisation of the cash flow and, where capital plans require, the organisation of approporiate borrowing facilities. The strategy covers the relevant treasury / prudential indicators, the current and projected debt positions and the annual investment strategy.
16. Current Portfolio Position
16.1 The Council’s treasury portfolio position at 31 March 2020 with forward projections are summarised below. The table shows the actual external debt (the treasury management operations), against the underlying capital borrowing need (the Capital Financing Requirement - CFR), highlighting any over or under borrowing.
2018/19 2019/20 2020/21 2021/22 2022/23 Actual Estimate Estimate Estimate Estimate £m £m £m £m £m External Debt Borrowing at 1 619.201 616.562 647.897 680.965 733.175 April Expected change -2.639 31.335 33.068 52.210 41.905 in borrowing Other long-term 179.620 172.971 166.875 165.882 164.856 liabilities (OLTL) Expected change -6.649 -6.096 -0.993 -1.026 -1.059 in OLTL Actual gross debt 789.533 814.772 846.847 898.031 938.877 at 31 March CFR – the 832.055 848.210 876.038 918.508 950.018 borrowing need Over / (under) -42.522 -33.438 -29.191 -20.477 -11.141 borrowing
Total investments 47.192 50.000 50.000 50.000 50.000 at 1 April Total investments 60.661 50.000 50.000 50.000 50.000 at 31 March Investment change 13.469 0.000 0.000 0.000 0.000 Net debt 728.872 764.772 796.847 848.031 888.877
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16.2 Within the prudential indicators there are a number of key indicators to ensure that the Council operates its activities within well defined limits. One of these is that the Council needs to ensure that its gross debt does not, except in the short term, exceed the total of the CFR in the preceding year plus the estimates of any additional CFR for 2020-21 and the following two financial years. This allows some flexibility for limited early borrowing for future years, but ensures that borrowing is not undertaken for revenue purposes.
16.3 The Director of Finance and Transformation (S151 Officer) reports that the Council complied with this prudential indicator in the current year and does not envisage difficulties for the future. This view takes into account current commitments, existing plans, and the proposals in the budget report.
17. Treasury Indicators: Limits to Borrowing Activity
17.1 The Operational Boundary. This is the limit beyond which external borrowing is not normally expected to exceed. In most cases, this would be a similar figure to the CFR, but may be lower or higher depending on the levels of actual debt and the ability to fund under-borrowing by other cash resources.
2019/20 2020/21 2021/22 2022/23 Operational boundary Estimate Estimate Estimate Estimate £m £m £m £m Borrowing 616.562 647.897 680.965 733.175 Additional Borrowing 31.335 33.068 52.210 41.905 10% Net Budget 28.584 31.162 32.239 33.000 Requirement Other long term liabilities 166.875 165.882 164.856 163.797 Total 843.356 878.009 930.270 971.877
17.2 The Authorised Limit for external borrowing. A further key prudential indicator represents a control on the maximum level of borrowing. This represents a limit beyond which external debt is prohibited, and this limit needs to be set or revised by full Council. It reflects the level of external debt which, while not desired, could be afforded in the short term, but is not sustainable in the longer term.
17.3 The Authorised Limit is the statutory limit determined under section 3 (1) of the Local Government Act 2003.
17.4 The Government retains an option to control either the total of all councils’ plans, or those of a specific council, although this power has not yet been exercised.
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17.5 The Council is asked to approve the following Authorised Limit:
2019/20 2020/21 2021/22 2022/23 Authorised limit Estimate Estimate Estimate Estimate £m £m £m £m Operational Debt (as 843.356 878.009 930.270 971.877 above) Possible additional borrowing (grants/capital 52.652 65.541 42.106 21.447 receipts) Total 896.008 943.550 972.376 993.324
18. Prospect for Interest Rates and Economic Environment
18.1 The Council has appointed Link Asset Services as its treasury advisor and part of their service is to assist the Council to formulate a view on interest rates. The following table gives Link’s central view:
Link Asset Services Interest Rate View Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23
Bank Rate View 0.75 0.75 0.75 0.75 0.75 1.00 1.00 1.00 1.00 1.00 1.25 1.25 1.25 1.25 3 Month LIBID 0.70 0.70 0.70 0.80 0.90 1.00 1.00 1.00 1.10 1.20 1.30 1.30 1.30 1.30 6 Month LIBID 0.80 0.80 0.80 0.90 1.00 1.10 1.10 1.20 1.30 1.40 1.50 1.50 1.50 1.50 12 Month LIBID 1.00 1.00 1.00 1.10 1.20 1.30 1.30 1.40 1.50 1.60 1.70 1.70 1.70 1.70 5yr PWLB Rate 2.30 2.40 2.40 2.50 2.50 2.60 2.70 2.80 2.90 2.90 3.00 3.10 3.20 3.20 10yr PWLB Rate 2.60 2.70 2.70 2.70 2.80 2.90 3.00 3.10 3.20 3.20 3.30 3.30 3.40 3.50 25yr PWLB Rate 3.20 3.30 3.40 3.40 3.50 3.60 3.70 3.70 3.80 3.90 4.00 4.00 4.10 4.10 50yr PWLB Rate 3.10 3.20 3.30 3.30 3.40 3.50 3.60 3.60 3.70 3.80 3.90 3.90 4.00 4.00
18.2 Public Works Loans Board (PWLB) rates and forecast shown above have taken into account the 20 basis point certainty rate reduction effective as of the 1st November 2012.
18.3 The above forecasts have been based on an assumption that there is an agreed deal on Brexit, including agreement on the terms of trade between the UK and EU, at some point in time. The result of the general election has removed much uncertainty around this major assumption. However, it does not remove uncertainty around whether agreement can be reached with the EU on a trade deal within the short time to December 2020, as the prime minister has pledged.
18.4 It has been little surprise that the Monetary Policy Committee (MPC) has left Bank Rate unchanged at 0.75% so far in 2019 due to the ongoing uncertainty over Brexit and the outcome of the general election. Brexit uncertainty has had a dampening effect on UK GDP growth in 2019, especially around mid- year. There is still some residual risk that the MPC could cut Bank Rate at its 19 December meeting as UK economy growth is likely to be weak in 2020 due to continuing uncertainty over whether there could effectively be a no deal Brexit in December 2020 if agreement on a trade deal is not reached with the
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EU. Until that major uncertainty is removed, or the period for agreeing a deal is extended, it is unlikely that the MPC would raise Bank Rate.
18.5 Bond yields / PWLB rates. There has been much speculation during 2019 that the bond market has gone into a bubble, as evidenced by high bond prices and remarkably low yields. However, given the context that there have been heightened expectations that the US was heading for a recession in 2020, and a general background of a downturn in world economic growth, together with inflation generally at low levels in most countries and expected to remain subdued, conditions are ripe for low bond yields. While inflation targeting by the major central banks has been successful over the last thirty years in lowering inflation expectations, the real equilibrium rate for central rates has fallen considerably due to the high level of borrowing by consumers: this means that central banks do not need to raise rates as much now to have a major impact on consumer spending, inflation, etc. This has pulled down the overall level of interest rates and bond yields in financial markets over the last thirty years. We have therefore seen over the last year, many bond yields up to ten years in the Eurozone actually turn negative. In addition, there has, at times, been an inversion of bond yields in the US whereby ten-year yields have fallen below shorter-term yields. In the past, this has been a precursor of a recession. The other side of this coin is that bond prices are elevated, as investors would be expected to be moving out of riskier assets i.e. shares, in anticipation of a downturn in corporate earnings and so selling out of equities. However, stock markets are also currently at high levels as some investors have focused on chasing returns in the context of dismal ultra-low interest rates on cash deposits.
18.6 During the first half of 2019-20 to 30 September, gilt yields plunged and caused a near halving of longer term PWLB rates to completely unprecedented historic low levels. There is though, an expectation that financial markets have gone too far in their fears about the degree of the downturn in US and world growth. If, as expected, the US only suffers a mild downturn in growth, bond markets in the US are likely to sell off and that would be expected to put upward pressure on bond yields, not only in the US, but also in the UK due to a correlation between US treasuries and UK gilts; at various times this correlation has been strong but at other times weak. However, forecasting the timing of this and how strong the correlation is likely to be is very difficult to forecast with any degree of confidence. Changes in UK Bank Rate will also impact on gilt yields.
18.7 One potential danger that may be lurking in investor minds is that Japan has become mired in a twenty-year bog of failing to get economic growth and inflation up off the floor, despite a combination of massive monetary and fiscal stimulus by both the central bank and government. Investors could be fretting that this condition might become contagious to other western economies.
18.8 Another danger is that unconventional monetary policy post 2008, (ultra-low interest rates plus quantitative easing), may end up doing more harm than good through prolonged use. Low interest rates have encouraged a debt- fuelled boom that now makes it harder for central banks to raise interest rates. Negative interest rates could damage the profitability of commercial banks and so impair their ability to lend and / or push them into riskier lending. Banks could also end up holding large amounts of their government’s bonds and so Page 16 of 56 Page 282 of 324
create a potential doom loop. In addition, the financial viability of pension funds could be damaged by low yields on holdings of bonds.
18.9 The overall longer run future trend is for gilt yields, and consequently PWLB rates, to rise, albeit gently. From time to time, gilt yields, and therefore PWLB rates, can be subject to exceptional levels of volatility due to geo-political, sovereign debt crisis, emerging market developments and sharp changes in investor sentiment. Such volatility could occur at any time during the forecast period.
18.10 In addition, PWLB rates are subject to ad hoc decisions by H.M. Treasury to change the margin over gilt yields charged in PWLB rates: such changes could be up or down. It is not clear that if gilt yields were to rise back up again by over 100bps within the next year or so, whether H M Treasury would remove the extra 100 bps margin implemented on 9 October 2019.
18.11 Economic and interest rate forecasting remains difficult with so many influences weighing on UK gilt yields and PWLB rates. The above forecasts, (and MPC decisions), will be liable to further amendment depending on how economic data and developments in financial markets transpire over the next year. Geopolitical developments, especially in the EU, could also have a major impact. Forecasts for average investment earnings beyond the three- year time horizon will be heavily dependent on economic and political developments.
18.12 Apart from the above uncertainties, downside risks to current forecasts for UK gilt yields and PWLB rates currently include:
• Brexit – if it were to cause significant economic disruption and a major downturn in the rate of growth. • The Bank of England takes action too quickly, or too far, over the next three years to raise Bank Rate and causes UK economic growth, and increases in inflation, to be weaker than we currently anticipate. • A resurgence of the Eurozone sovereign debt crisis. • Weak capitalisation of some European banks, particularly Italian Banks. • German minority government. • Minority government vulnerability. • Austria, the Czech Republic, Poland and Hungary now form a strongly anti-immigration bloc within the EU. • Geopolitical risks, especially North Korea, but also in Europe and the Middle East, which could lead to increasing safe haven flows.
18.13 The potential for upside risks to current forecasts for UK gilt yields and PWLB rates, include: -
• Brexit – if agreement was reached all round that removed all threats of economic and political disruption between the EU and the UK. • The Bank of England is too slow in its pace and strength of increases in Bank Rate and, therefore, allows inflationary pressures to build up too
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strongly within the UK economy, which then necessitates a later rapid series of increases in Bank Rate faster than we currently expect. • UK inflation, whether domestically generated or imported, returning to sustained significantly higher levels causing an increase in the inflation premium inherent to gilt yields. 19. Investment and borrowing rates
19.1 Investment returns are likely to remain low during 2020/21 with little increase in the following two years. However, if major progress was made with an agreed Brexit, then there is upside potential for earnings.
19.2 Borrowing interest rates were on a major falling trend during the first half of 2019-20 but then jumped up by 100 bps on 9 October 2019. The policy of avoiding new borrowing by running down spare cash balances has served local authorities well over the last few years. However, the unexpected increase of 100 bps in PWLB rates may result in further review and monitoring of local authority treasury management strategies and risk management.
19.3 There will remain a cost of carry, (the difference between higher borrowing costs and lower investment returns), to any new long-term borrowing that causes a temporary increase in cash balances as this position will, most likely, incur a revenue cost.
20. Economic Commentary
20.1 The following paragraphs are designed to impart a degree of knowledge around factors impacting on the treasury management function at the Council. This environment is constantly changing, no more so than in recent years. Any significant issues that arise between the report being written and the actual committee date will be reported verbally.
UK Economy
20.2 Brexit. 2019 has been a year of upheaval on the political front as Theresa May resigned as Prime Minister to be replaced by Boris Johnson on a platform of the UK leaving the EU on 31 October 2019, with or without a deal. However, MPs blocked leaving on that date and the EU agreed an extension to 31 January 2020. In late October, MPs approved an outline of a Brexit deal to enable the UK to leave the EU on 31 January. Now that the Conservative Government has gained a large overall majority in the general election on 12 December, this outline deal will be passed by Parliament by that date. However, there will still be much uncertainty as the detail of a trade deal will need to be negotiated by the current end of the transition period in December 2020 which the Prime Minister has pledged he will not extend. This could prove to be an unrealistically short timetable for such major negotiations that leaves open two possibilities; one, the need for an extension of negotiations, probably two years, or, a no deal Brexit in December 2020.
20.3 While the Bank of England went through the routine of producing another quarterly Inflation Report, (now renamed the Monetary Policy Report), on 7 November, it is very questionable when faced with the uncertainties of where the UK will be after the general election. The Bank made a change in their Page 18 of 56 Page 284 of 324
Brexit assumptions to now include a deal being eventually passed. The Monetary Policy Report highlighted increased concerns among MPC members around weak global economic growth and the potential for Brexit uncertainties to become entrenched and so delay UK economic recovery. Consequently, the MPC voted 7-2 to maintain Bank Rate at 0.75% but two members were sufficiently concerned to vote for an immediate Bank Rate cut to 0.5%. The MPC warned that if global growth does not pick up or Brexit uncertainties intensify, then a rate cut was now more likely.
Conversely, if risks do recede, then a more rapid recovery of growth will require gradual and limited rate rises. The speed of recovery will depend on the extent to which uncertainty dissipates over the final terms for trade between the UK and EU and by how much global growth rates pick up. The Bank revised its inflation forecasts down – to 1.25% in 2019, 1.5% in 2020, and 2.0% in 2021; hence the MPC views inflation as causing little concern in the near future.
20.4 If economic growth were to weaken considerably, the MPC has relatively little room to make a big impact with Bank Rate still only at 0.75%. It would therefore, probably suggest that it would be up to the Chancellor to provide help to support growth by way of a fiscal boost by e.g. tax cuts, increases in the annual expenditure budgets of government departments and services and expenditure on infrastructure projects, to boost the economy. The Government has already made moves in this direction and it made significant promises in its election manifesto to increase government spending by up to £20bn p.a., (this would add about 1% to GDP growth rates), by investing primarily in infrastructure. This is likely to be announced in the next Budget, probably in February 2020. The Chancellor has also amended the fiscal rules in November to allow for an increase in government expenditure.
20.5 As for inflation itself, CPI has been hovering around the Bank of England’s target of 2% during 2019, but fell again in October to 1.5%. It is likely to remain close to or under 2% over the next two years and so it does not pose any immediate concern to the MPC at the current time. However, if there was a no deal Brexit, inflation could rise towards 4%, primarily because of imported inflation on the back of a weakening pound.
20.6 With regard to the labour market, growth in numbers employed has been quite resilient through 2019 until the three months to September where it fell by 58,000. However, this was about half of what had been expected. The unemployment rate fell back again to a 44 year low of 3.8% on the Independent Labour Organisation measure in September, despite the fall in numbers employed, due to numbers leaving the work force. Wage inflation has been edging down from a high point of 3.9% in July to 3.8% in August and now 3.6% in September (3 month average regular pay, excluding bonuses). This meant that in real terms, (i.e. wage rates higher than CPI inflation), earnings grew by about 1.9%. As the UK economy is very much services sector driven, an increase in household spending power is likely to feed through into providing some support to the overall rate of economic growth in the coming months. The other message from the fall in wage growth is that employers are beginning to find it easier to hire suitable staff, indicating that supply pressure in the labour market is easing.
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Global Economy
20.7 World Growth . Until recent years, world growth has been boosted by increasing globalisation i.e. countries specialising in producing goods and commodities in which they have an economic advantage and which they then trade with the rest of the world. This has boosted worldwide productivity and growth, and, by lowering costs, has also depressed inflation. However, the rise of China as an economic superpower over the last thirty years, which now accounts for nearly 20% of total world GDP, has unbalanced the world economy. It is, therefore, likely that we are heading into a period where there will be a reversal of world globalisation and a decoupling of western countries from dependence on China to supply products. This is likely to produce a backdrop in the coming years of weak global growth and so weak inflation. Central banks are, therefore, likely to come under more pressure to support growth by looser monetary policy measures and this will militate against central banks increasing interest rates.
20.8 The trade war between the US and China is a major concern to financial markets due to the synchronised general weakening of growth in the major economies of the world, compounded by fears that there could even be a recession looming up in the US. These concerns resulted in government bond yields in the developed world falling significantly during 2019. If there were a major worldwide downturn in growth, central banks in most of the major economies will have limited ammunition available, in terms of monetary policy measures, when rates are already very low in most countries, (apart from the US). There are also concerns about how much distortion of financial markets has already occurred with the current levels of quantitative easing purchases of debt by central banks and the use of negative central bank rates in some countries. The latest PMI survey statistics of economic health for the US, UK, EU and China have all been predicting a downturn in growth; this confirms investor sentiment that the outlook for growth during the year ahead is weak.
20.9 USA. The massive easing of fiscal policy in 2018 fuelled a temporary boost in consumption in that year which generated an upturn in the rate of growth to a robust 2.9% y/y. Growth in 2019 has been falling after a strong start in quarter 1 at 3.1%, (annualised rate), to 2.0% in quarter 2 and then 1.9% in quarter 3; it is expected to fall further. The strong growth in employment numbers during 2018 has weakened during 2019, indicating that the economy is cooling, while inflationary pressures are also weakening; CPI inflation fell from 2.3% to 2.0% in September.
20.10 The Fed finished its series of increases in rates to 2.25 – 2.50% in December 2018. In July 2019, it cut rates by 0.25% as a ‘midterm adjustment’ but flagged up that this was not intended to be seen as the start of a series of cuts to ward off a downturn in growth. It also ended its programme of quantitative tightening in August, (reducing its holdings of treasuries etc.). It then cut rates by 0.25% again in September and by another 0.25% in its October meeting to 1.50 – 1.75%. At its September meeting it also said it was going to start buying Treasuries again, although this was not to be seen as a resumption of quantitative easing but rather an exercise to relieve liquidity pressures in the repo market.
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Despite those protestations, this still means that the Fed is again expanding its balance sheet holdings of government debt. In the first month, it will buy $60bn, whereas it had been reducing its balance sheet by $50bn per month during 2019. As it will be buying only short-term (under 12 months) Treasury bills, it is technically correct that this is not quantitative easing (which is purchase of long term debt).
20.11 Investor confidence has been badly rattled by the progressive ramping up of increases in tariffs made on Chinese imports and China has responded with increases in tariffs on American imports. This trade war is seen as depressing US, Chinese and world growth. In the EU, it is also particularly impacting Germany as exports of goods and services are equivalent to 46% of total GDP. It will also impact developing countries dependent on exporting commodities to China. However, in early November, a phase one deal was agreed between the US and China to roll back some of the tariffs which gives some hope of resolving this dispute.
20.12 Eurozone . Growth has been slowing from +1.8 % during 2018 to around half of that in 2019. Growth was +0.4% q/q (+1.2% y/y) in quarter 1, +0.2% q/q (+1.2% y/y) in quarter 2 and then +0.2% q/q, +1.1% in quarter 3; there appears to be little upside potential in the near future. German GDP growth has been struggling to stay in positive territory in 2019 and fell by -0.1% in quarter 2; industrial production was down 4% y/y in June with car production down 10% y/y. Germany would be particularly vulnerable to a no deal Brexit depressing exports further and if USA imposes tariffs on EU produced cars.
20.13 The European Central Bank (ECB). At its March meeting it said it expected to leave interest rates at their present levels “at least through the end of 2019”, but that was of little help to boosting growth in the near term. Consequently, it announced a third round of TLTROs; this provides banks with cheap borrowing every three months from September 2019 until March 2021 that means that, although they will have only a two-year maturity, the Bank was making funds available until 2023, two years later than under its previous policy. As with the last round, the new TLTROs will include an incentive to encourage bank lending, and they will be capped at 30% of a bank’s eligible loans. However, since then, the downturn in EZ and world growth has gathered momentum; at its meeting on 12 September, it cut its deposit rate further into negative territory, from -0.4% to -0.5%, and announced a resumption of quantitative easing purchases of debt for an unlimited period; also increased the maturity of the third round of TLTROs from two to three years. However, it is doubtful whether this loosening of monetary policy will have much impact on growth and, unsurprisingly, the ECB stated that governments will need to help stimulate growth by ‘growth friendly’ fiscal policy
20.14 China . Economic growth has been weakening over successive years, despite repeated rounds of central bank stimulus; medium term risks are increasing. Major progress still needs to be made to eliminate excess industrial capacity and the stock of unsold property, and to address the level of non-performing loans in the banking and shadow banking systems. In addition, there still needs to be a greater switch from investment in industrial capacity, property construction and infrastructure to consumer goods production.
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20.15 Japan. Japan has been struggling to stimulate consistent significant GDP growth and to get inflation up to its target of 2%, despite huge monetary and fiscal stimulus. It is also making little progress on fundamental reform of the economy.
21. Borrowing Strategy
21.1 The Council is currently maintaining an under-borrowed position. This means that the capital borrowing need (the Capital Financing Requirement), has not been fully funded with loan debt as cash supporting the Council’s reserves, balances and cash flow has been used as a temporary measure. This strategy is prudent as investment returns are low and counterparty risk is still an issue that needs to be considered.
21.2 Against this background and the risks within the economic forecast, caution will be adopted with the 2020-21 treasury operations. The Director of Finance and Transformation will monitor interest rates in financial markets and adopt a pragmatic approach to changing circumstances:
• If it was felt there was a significant risk of a sharp FALL in long and short term rates, e.g. due to a marked increase of risks around relapse into recession or of risks of deflation, then long term borrowings will be postponed, and potential rescheduling from fixed rate funding into short term borrowing will be considered.
• If was felt that there was a significant risk of a much sharper RISE in long and short term rates than that currently forecast, perhaps arising from an acceleration in the start date and in the rate of increase in central rates in the US and UK, an increase in world economic activity or a sudden increase in inflation risks, then the portfolio position will be re-appraised. Most likely fixed rate funding will be drawn whilst interest rates are lower than they are projected to be in the next few years.
21.3 Any decisions will be reported to the appropriate decision making body at the next available opportunity.
Treasury Management Limits on Activity
21.4 There are three debt related treasury activity limits. The purpose of these are to restrain the activity of the treasury function within certain limits, thereby managing risk and reducing the impact of any adverse movement in interest rates. However, if these are set to be too restrictive they will impair the opportunities to reduce costs / improve performance. The indicators are:
• Upper limits on variable interest rate exposure. This identifies a maximum limit for variable interest rates based upon the debt position, net of investments.
• Upper limits on fixed interest rate exposure. This is similar to the previous indicator and covers a maximum limit on fixed interest rates.
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• Maturity structure of borrowing. These gross limits are set to reduce the Council’s exposure to large fixed rate sums falling due for refinancing, and are required for upper and lower limits.
21.5 The Council is asked to approve the following treasury indicators and limits:
2020/21 2021/22 2022/23
% % % Interest Rate Exposures Limits on fixed interest rates 90 90 90 based on net debt Limits on variable interest 75 75 75 rates based on net debt
Maturity Structure of interest rate borrowing (fixed and variable) 2020/21 Lower Upper
% % Under 12 months 0.00 35 12 months to 2 years 0.00 30 2 years to 5 years 0.00 50 5 years to 10 years 0.00 75 10 years and above 0.00 90
22. Policy on Borrowing in Advance of Need
22.1 The Council will not borrow more than or in advance of its needs, purely in order to profit from the investment of the extra sums borrowed. Any decision to borrow in advance will be within forward approved Capital Financing Requirement estimates, and will be considered carefully to ensure that value for money can be demonstrated and that the Council can ensure the security of such funds.
22.2 Risks associated with any borrowing in advance of activity will be subject to prior appraisal and subsequent reporting through the mid-year or annual reporting mechanism.
23. Debt Rescheduling
23.1 Rescheduling of current borrowing in our debt portfolio is unlikely to occur as the 100 bps increase in PWLB rates only applied to new borrowing rates and not to premature debt repayment rates.
23.2 All rescheduling will be reported to Cabinet, at the earliest meeting following its action.
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24. New financial institutions as a source of borrowing and / or types of borrowing
24.1 Following the decision by the PWLB on 9 October 2019 to increase their margin over gilt yields by 100 bps to 180 basis points on loans lent to local authorities, consideration will also need to be given to sourcing funding at cheaper rates from the following:
• Local authorities (primarily shorter dated maturities) • Financial institutions (primarily insurance companies and pension funds but also some banks, out of spot or forward dates) • Municipal Bonds Agency (no issuance at present but there is potential)
24.2 The degree which any of these options proves cheaper than PWLB Certainty Rate is still evolving at the time of writing but our advisors will keep us informed
25. Other Issues
Capital Strategy
25.1 In December 2017, CIPFA issued revised Prudential and Treasury Management Codes. As from 2019-20, all local authorities are required to prepare an additional report, a Capital Strategy report, which is intended to provide the following: - • a high-level overview of how capital expenditure, capital financing and treasury management activity contribute to the provision of services • an overview of how the associated risk is managed • the implications for future financial sustainability
25.2 The aim of this report is to ensure that all elected members of Council fully understand the overall strategy, governance procedures and risk appetite entailed by this Strategy.
25.3 The Capital Strategy allows all members to understand how stewardship, value for money, prudence, sustainability and affordability will be secured.
25.4 The Capital Strategy for 2020/21 to 2022/23 is presented to Council on this agenda.
26. Annual Investment Strategy
Investment Policy
26.1 The Council’s investment policy has regard to the MHCLG’s Guidance on Local Government Investments (the Guidance) and the CIPFA Treasury Management in Public Services Code of Practice and Cross Sectoral Guidance Notes 2017 (the CIPFA TM Code). The Council’s investment priorities will be security first, portfolio liquidity second, then return (yield).
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26.2 In accordance with guidance from MHCLG and CIPFA, and in order to minimise the risk to investments, the Council has below clearly stipulated the minimum acceptable credit quality of counterparties for inclusion on the lending list. The creditworthiness methodology used to create the counterparty list fully accounts for the ratings, watches and outlooks published by all three ratings agencies with a full understanding of what these reflect in the eyes of each agency. Using the Link ratings service potential counterparty ratings are monitored on a real time basis with knowledge of any changes notified electronically as the agencies notify modifications.
26.3 Furthermore, the Council’s officers recognise that ratings should not be the sole determinant of the quality of an institution and that it is important to continually assess and monitor the financial sector on both a micro and macro basis and in relation to the economic and political environments in which institutions operate. The assessment will also take account of information that reflects the opinion of the markets. To this end the Council will engage with its advisors to maintain a monitor on market pricing such as “credit default swaps” and overlay that information on top of the credit ratings. This is fully integrated into the credit methodology provided by the advisors, Link Asset Services in producing its colour coding which show the varying degrees of suggested creditworthiness.
26.4 Other information sources used will include the financial press, share price and other such information pertaining to the banking sector in order to establish the most robust scrutiny process on the suitability of potential investment counterparties.
26.5 The aim of the strategy is to generate a list of highly creditworthy counterparties which will also enable diversification and thus avoidance of concentration risk.
26.6 The intention of the strategy is to provide security of investment and minimisation of risk.
26.7 The key requirements of both the Code and the investment guidance are to set an annual investment strategy, as part of its annual treasury strategy for the following year, covering the identification and approval of the following:
• The strategy guidelines for choosing and placing investments; • The principles to be used to determine the maximum periods for which funds can be committed; • Specified investments that the Council will use. These are high security (i.e. high credit rating, although this is defined by the Council, and no guidelines are given), and high liquidity investments in sterling and with a maturity of no more than a year.
26.8 The investment instruments identified for use in the financial year 2020-21 are set out at Appendix 2 under the ‘Specified’ and ‘Non-Specified’ Investments categories. Organisations to which the Council will lend and associated counterparty limits are detailed at Appendix 3.
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Creditworthiness Policy
26.9 The Council applies the creditworthiness service provided by Link Asset Services. This service employs sophisticated modelling approach utilising credit ratings from the three main credit rating agencies - Fitch, Moodys and Standard and Poor’s. The credit ratings of counterparties are supplemented with the following overlays:
• Credit watches and credit outlooks from credit rating agencies; • Credit Default Swap (CDS) spreads to give early warning of likely changes in credit ratings • Sovereign ratings to select counterparties from only the most creditworthy countries.
26.10 Credit Default Swap (CDS) is a contract between two counterparties, which basically gives protection, or insurance, in case of credit default. The payments involved in the contract are based on a spread currently traded in the market. The spread of CDS indicates the market perception of the likelihood of a credit event or default occurring. The higher the spread the more likely the market considers an event of default will occur.
26.11 This modelling approach combines credit ratings, and any assigned Watches and Outlooks in a weighted scoring system which is then combined with an overlay of CDS spreads. The end product of this is a series of colour coded bands which indicate the relative creditworthiness of counterparties. These colour codes are used by the Council to determine the duration for investments. The Council will therefore use counterparties within the following durational bands:
• Blue 1 year (only applies to nationalised or semi-nationalised UK banks) • Orange 1 year • Red 6 months • Green 100 days • No colour not to be used
26.12 Link Asset Services creditworthiness service uses a wider array of information than just primary ratings and by using a risk weighted scoring system, does not give undue preponderance to just one agency’s ratings. The Council is satisfied with the level of security this provides for its investments. It is also a service which the Council would not be able to replicate using in house resources.
26.13 Typically the minimum credit ratings criteria the Council use will be a short term rating (Fitch or equivalents) of short term rating F1, long term rating A-. There may be occasions when the counterparty ratings from one rating agency are marginally lower than these ratings but may still be used. In these instances consideration will be given to the whole range of ratings available, or other topical market information, to support their use.
26.14 All credit ratings will be monitored on a weekly basis. The Council is alerted to changes to ratings of all three agencies through its use of the Link creditworthiness service.
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• If a downgrade results in the counterparty / investment scheme no longer meeting the Council’s minimum criteria, its further use as a new investment will be withdrawn immediately.
• In addition to the use of credit ratings the Council will be advised of information in movements in Credit Default Swap against the iTraxx benchmark and other market data on a daily basis via its Passport website, provided exclusively to it by Link Asset Services. Extreme market movements may result in downgrade of an institution or removal from the Council’s lending list.
26.15 Sole reliance will not be placed on the use of this external service. In addition this Council will also use market data and market information, as well as information on any external support for banks to help support its decision making process.
26.16 If financial institutions are upgraded in rating and therefore meet the Council’s criteria as defined, then committee approval will be sought prior to inclusion on the counterparty list.
26.17 UK Banks – ring fencing. The largest UK banks, (those with more than £25bn of retail / Small and Medium-sized Enterprise (SME) deposits), are required, by UK law, to separate core retail banking services from their investment and international banking activities by 1st January 2019. This is known as “ring- fencing”. Whilst smaller banks with less than £25bn in deposits are exempt, they can choose to opt up. Several banks are very close to the threshold already and so may come into scope in the future regardless
26.18 Ring-fencing is a regulatory initiative created in response to the global financial crisis. It mandates the separation of retail and SME deposits from investment banking, in order to improve the resilience and resolvability of banks by changing their structure. In general, simpler activities offered from within a ring-fenced bank, (RFB), will be focused on lower risk, day-to-day core transactions, whilst more complex and “riskier” activities are required to be housed in a separate entity, a non-ring-fenced bank, (NRFB). This is intended to ensure that an entity’s core activities are not adversely affected by the acts or omissions of other members of its group.
26.19 While the structure of the banks included within this process may have changed, the fundamentals of credit assessment have not. The Council will continue to assess the new-formed entities in the same way that it does others and those with sufficiently high ratings, (and any other metrics considered), will be considered for investment purposes.
Country Limits
26.20 The Council has determined that it will only use approved counterparties from the UK only.
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Investment Counterparty Selection Criteria
26.21 The primary principle governing the Council’s investment criteria is the security of its investments, although the yield or return on the investment is also a key consideration. After this main principle the Council will ensure that:
• It maintains a policy covering both the categories of investment types it will invest in, criteria for choosing investment counterparties with adequate security, and monitoring their security. This is set out in the Specified and Non-Specified investment sections below; and • It has sufficient liquidity in its investments. For this purpose it will set out procedures for determining the maximum periods for which funds may prudently be committed. These procedures also apply to the Council’s prudential indicators covering the maximum principal sums invested.
26.22 The Director of Finance and Transformation will maintain a counterparty list in compliance with the following criteria and will revise the criteria and submit them to Council for approval as necessary. These criteria are separate to that which determines which types of investment instrument are either Specified or Non-Specified as it provides an overall pool of counterparties considered high quality which the Council may use, rather than defining what types of investment instruments are to be used.
26.23 The minimum rating criteria use the lowest common denominator method of selecting counterparties and applying limits. This means that the application of the Council’s minimum criteria will apply to the lowest available rating for any institution. For instance, if an institution is rated by two agencies, one meets the Council’s criteria, the other does not, then the institution will fall outside the lending criteria. This is in compliance with a CIPFA Treasury Management Panel recommendation in March 2009 and the CIPFA Treasury Management Code of Practice.
26.24 Credit rating information is supplied by Link Asset Services, the Council’s treasury advisors, on all active counterparties that comply with the criteria below. Any counterparty failing to meet the criteria would be omitted from the counterparty (dealing) list. Any rating changes, rating watches (notification of a likely change), rating outlooks (notification of a possible longer term change) are provided to officers almost immediately after they occur and this information is considered before dealing. For instance, a negative rating watch applying to a counterparty at the minimum Council criteria will be considered for suspension from use, with all others being reviewed in light of market conditions.
26.25 On occasions ratings may be downgraded when an investment has already been made. The criteria used are such that a minor downgrading should not affect the full receipt of the principal and interest.
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26.26 The criteria for providing a pool of high quality investment counterparties (both specified and non-specified investments) is as follows:
• Banks 1 – a good credit quality – the Council will only use banks which are UK banks and hold a minimum Fitch rating of: • Short term – F1 • Long term – A-
• Banks 2 – part nationalised UK bank – Royal Bank of Scotland ring fenced operations. This bank can be included if it continues to be part nationalised or it meets the rating in Banks 1 above.
• Banks 3 – The Council’s own banker (Natwest Bank) for transactional purposes if the bank falls below the above criteria, although in this case balances will be minimised in both monetary size and time invested.
• Bank subsidiary and treasury operation – The Council will use these where the parent bank has provided an appropriate guarantee or has the necessary ratings outlined above.
• Building societies – The Council will use all societies which meet the ratings for banks as outlined above.
• Money Market Funds – AAA rating.
• Enhanced Money Market Funds – AAA rating.
• UK Government (DMADF)
• Local authorities.
Group Considerations
26.27 Due care will be taken will be taken to consider the group exposure of the Council’s investments. In addition limits in place above will apply to a group of companies.
Use of Additional Information other than Credit Ratings
26.28 Additional requirements under the Code require the Council to supplement credit rating information. Whilst the above criteria relies primarily on the application of credit ratings to provide a pool of appropriate counterparties for officers to use, additional operational market information will be applied before making any specific investment decision from the agreed pool of counterparties. This additional market information (for example Credit Default Swaps, negative rating watches/outlooks) will be applied to compare the relative security of differing investment opportunities.
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Time and Monetary Limits Applying to Investments
26.29 The time and monetary limits for institutions on the Council’s counterparty list are as follows (these will cover specified and non-specified investments):
Fitch Long Term Fitch Short Term Money Time Rating Rating Limit Limit (minimum) (minimum)
Banks 1 category high quality AA- F1+ £15 million 1 yr Banks 1 category medium quality A F1 £7.5 million 1 yr Banks 1 category lower quality A- F1 £5 million 1 yr Banks 2 category – part AA- F1+ £20 million 1 yr nationalised – high quality Banks 2 category – part A F1 £10 million 1 yr nationalised – medium quality Banks 2 category – part A- F1 £7.5 million 1 yr nationalised – low quality Limit 3 category – Council’s N/A N/A £2.5 million 1 day banker (not meeting Banks 1) UK Government (DMADF) N/A N/A Unlimited 6 mths Local authorities N/A N/A £15 million 1 yr Money Market Funds AAA £15 million liquid
26.30 The proposed criteria for Specified and Non-Specified investments are shown in Appendix 2 for approval.
27. Investment Strategy
In House Funds
27.1 Investments will be made with reference to the core balance and cash flow requirements and the outlook for short-term interest rates (i.e. rates for investments up to 12 months). Greater returns are usually obtainable by investing for longer periods. While most cash balances are required in order to manage the ups and downs of cash flow, where cash sums can be identified that could be invested for longer periods, the value to be obtained from longer term investments will be carefully assessed.
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Investment Returns Expectations
27.2 On the assumption that the UK and EU agree a Brexit deal including the terms of trade by the end of 2020 or soon after, then Bank Rate is forecast to increase only slowly over the next few years to reach 1.00% by quarter 1 2023. Bank Rate forecasts for financial year ends (March) are:
• Q1 2021 0.75% • Q2 2022 1.00% • Q1 2023 1.00%
27.3 The suggested budgeted investment earnings rates for returns on investments placed for periods up to 100 days during each financial year are as follows:
• 2019/20 0.75% • 2020/21 0.75% • 2021/22 1.00% • 2022/23 1.25% • 2023/24 1.50% • 2024/25 1.75% • Later years 2.25%
27.4 The overall balance of risks to economic growth in the UK is probably to the downside due to the weight of all the uncertainties over Brexit, as well as a softening global economic picture.
27.5 The balance of risks to increases in Bank Rate and shorter term PWLB rates are broadly similarly to the downside.
27.6 In the event that a Brexit deal is agreed with the EU and approved by Parliament, the balance of risks to economic growth and to increases in Bank Rate is likely to change to the upside.
Investment Treasury Indicator and Limit
27.7 Total principal funds invested for greater than 365 days. These limits are set with regard to the Council’s liquidity requirements and to reduce the need for early sale of an investment, and are based on the availability of funds after each year-end.
27.8 The Council is asked to approved the treasury indicator and limit:
Maximum principal sums invested > 364 days 2020/21 2021/22 2022/23
£m £m £m Principal sums invested > 364 days 0 0 0
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27.9 For its cash flow generated balances, the Council will seek to utilise its business reserve instant access and notice accounts, money market funds and short-dated deposits (overnight to 100 days) in order to benefit from the compounding of interest.
End of Year Investment Report
27.10 At the end of the financial year, the Council will report on its investment activity as part of its Annual Treasury Report.
Policy on the use of External Service Providers
27.11 The Council uses Link Asset Services, Treasury Solutions, as its external treasury management advisors.
27.12 The Council recognises that responsibility for treasury management decisions remains with the organisation at all times and will ensure that undue reliance is not placed upon our external service providers. All decisions will be undertaken with regards to all available information, including, but not solely, our treasury advisers.
27.13 It also recognises that there is value in employing external providers of treasury management services in order to acquire access to specialist skills and resources. The Council will ensure that the terms of their appointment and the methods by which their value will be assessed are properly agreed and documented, and subjected to regular review.
Training
27.14 The CIPFA Code requires the responsible officer to ensure that Members with responsibility for treasury management receive adequate training in treasury management. This especially applies to Members responsible for scrutiny. Members attended a Treasury Management update session, provided by the Director of Finance and Transformation and Council’s Principal Treasury Officer, in November 2017. Training requirements will be continually assessed and further training will be arranged as required.
27.15 The training needs of treasury management officers are periodically reviewed.
The Treasury Management role of the Section 151 Officer
27.16 The Director of Finance and Transformation (S151 Officer) will be responsible for:
• recommending clauses, treasury management policy/practices for approval, reviewing the same regularly, and monitoring compliance; • submitting regular treasury management policy reports; • submitting budgets and budget variations; • receiving and reviewing management information reports; • reviewing the performance of the treasury management function;
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• ensuring the adequacy of treasury management resources and skills, and the effective division of responsibilities within the treasury management function; • ensuring the adequacy of internal audit, and liaising with external audit; • recommending the appointment of external service providers. • preparation of a capital strategy to include capital expenditure, capital financing, non-financial investments and treasury management • ensuring that the capital strategy is prudent, sustainable, affordable and prudent in the long term and provides value for money
27.17 The responsibilities of the Director of Finance and Transformation (S151 Officer) has developed with the revision to the Treasury Management Code of Practice and Prudential Indicators in December 2017, which extends the definition of treasury management and investments to include non-financial assets (non-treasury investments).
28. Options and Risk Assessment
28.1 Although the content and criteria stated in the Treasury Management Strategy are statutory requirements, there are some options available to the Council in how this is managed, in terms of the following:
• Investment Options – alternative investment products, counterparties, limits and durations. • Prudential Indicators – alternative limits for certain indicators, i.e. debt maturity profile, interest rate exposure. • Minimum Revenue Provision – alternative options for the revenue charge.
28.2 The options proposed are based on the Council investing surplus monies with low risk counterparties in line with the Council’s low risk appetite. This provides the Council with adequate liquidity and security of funds before considering investment return.
29. Risk Assessment
29.1 The main risks surrounding the Council’s Treasury operations, mitigated through the Treasury Management Strategy and Investment Policy, are as follows:
• Prudential Indicator limits are breached – set and approved locally and regularly monitored as part of ongoing Treasury Management activity. • Investments lost due to the inability of a Bank or Building Society to repay the loan – key criteria as part of the Creditworthiness Policy which ensures investments are made with only high credit quality counterparties for set durations. • Too cautious an approach to investments could result in lower investment income being achieved – Investment Policy provides flexibility to use other non-specific investment products if it is considered prudent.
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30. Consultation
30.1 This report requires no further consultation.
31. Comments of the Town Clerk (Monitoring Officer)
31.1 The main Policy change in the proposed Treasury Management Statement extends the period over which borrowing is charged to the Council in relation to PFI assets to the duration for which such assets are expected to be in use. This generates an annual saving against borrowing each year until 2042, however, thereafter it will create a gradually increasing budget pressure as shown in the appendix. The s151 officer’s assessment that this remains a prudent approach is understood given that the assets will continue to be in use and re-payment of the whole cost at the current expiry date would otherwise mean that the burden of cost for the duration of ownership was carried in the early life of the assets.
32. Comments of the Section 151 Officer
32.1 The Director of Finance and Transformation (S151 Officer) is the author of the report.
33. Comments of the HR City Manager and Compliance with the Equality Duty
33.1 There are no staffing or equality issues arising for the Council.
34. Comments of Overview and Scrutiny
34.1 This report will be considered by the Finance and Value for Money Overview and Scrutiny Commission at its Budget meeting of Friday, 24 January, 2020. Any comments or recommendations agreed at the meeting will be tabled at January Cabinet for consideration alongside the report. (Ref. Sc5695)
35. Comments of the Portfolio Holder for Strategic Finance
35.1 There are a number of ongoing external pressures that could influence the Council’s future finances, one being an increase in interest rates, another being inflationary pressures and thirdly uncertainty around Brexit and the value of the pound. That being said at the moment the Council’s borrowing is under control but I would add that any opportunity to reschedule debt in cooperation with our financial advisors should be taken with the addition of the restructuring debt to release finances under MRP.
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David Bell Director of Finance and Transformation (S151 Officer)
Background Documents: CIPFA Prudential Code and Treasury Management Code of Practice (2011 Edition) Local Authorities (Capital Finance and Accounting) (England) (Amendment) Regulations 2008 Guidance on Minimum Revenue Provision issued by DCLG – Feb 2008
Officer Interest None
Contact Officer: David Bell/Mike Armstrong Telephone No.: 613084/613282
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Implications Matrix
I have informed and sought advice from HR, Yes Legal, Finance, Overview and Scrutiny and the Climate Change Advisor and any other key stakeholders i.e. Portfolio Holder, relevant Ward Members etc. prior to submitting this report for official comments I have considered whether this report requests a Yes decision that is outside the Budget and Policy Framework approved by Council Value for money considerations have been Yes accounted for within the report
The report is approved by the relevant City Yes Manager I have included any procurement/commercial n/a issues/implications within the report
I have considered the potential media interest in Yes this report and liaised with the Media Team to ensure that they are briefed to respond to media interest. I have included any equalities and diversity There are no equality and diversity implications within the report and where implications within this report. necessary I have completed an Equalities Impact Assessment and the outcomes are included within the report Any Health and Safety implications are included n/a within the report Any human rights implications are included within There are no human rights implications the report within this report. I have included any community safety n/a implications and paid regard to Section 17 of the Crime and Disorder Act within the report I have liaised with the Climate Change Advisor n/a and any environmental and climate change issues/sustainability implications are included within the report I have included information about how this report n/a contributes to the City Plan/ Area priorities within the report
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Appendix 1 Prudential and Treasury Indicators
1. Prudential and Treasury Indicators 1.1 The following show the proposed Prudential and Treasury Indicators referred to in section six of the main report 1.2 Affordability of Capital Plans (a) Indicator 1 – Capital Expenditure “The local authority will make reasonable estimates of the total capital expenditure that it plans to incur during the forthcoming financial year and at least the following two financial years. These prudential indicators will be referred to as estimates of capital expenditure and shall be expressed in the following manner: Estimate of total capital expenditure to be incurred in years 1, 2 and 3 (and 4 etc. if applicable)” (paragraph 47 of the code) This details the Council’s capital spending plans over the next 3 years and reports on the outturn from the previous financial year. These estimates are in line with the General Fund, HRA and Capital Strategy Reports to be considered by Council on 27 February 2020. There is no subjectivity to this indicator.
2018/19 2019/20 2020/21 2021/22 2022/23 Actual Estimate Estimate Estimate Estimate £m £m £m £m £m Non-HRA 67.542 83.075 96.297 81.666 43.289
HRA 32.903 32.137 53.273 63.874 60.808
Total 100.445 115.212 149.570 145.540 104.097
(b) Indicator 2 – Ratio of Financing Costs to Net Revenue Stream “The local authority will estimate for the forthcoming financial year and the following two financial years the ratio of financing costs to net revenue stream. This prudential indicator shall be referred to as estimates of the ratio of financing costs to net revenue stream and shall be expressed in the following manner: Estimates of financing costs / estimate of net revenue stream * 100 % For years 1, 2 and 3 “(paragraph 38 of the code) Shows the revenue costs (the capital financing costs less investment income earned) associated with funding previous and future capital spending, as a percentage of total revenue spending. Again, as in the previous indicator, these estimates are in line with the General Fund, HRA and Capital Strategy Reports to be considered by Council on 27 February 2020. There is no subjectivity to this indicator.
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2018/19 2019/20 2020/21 2021/22 2022/23 Actual Estimate Estimate Estimate Estimate % % % % % Non-HRA 2.7 2.9 2.7 4.5 4.6 HRA 35.3 56.4 35.0 35.1 35.8
(c) Indicator 3 – Capital Financing Requirement “The local authority will make reasonable estimates of the total of the capital financing requirement at the end of the forthcoming financial year and the following two years. These prudential indicators will be referred to as the estimates of capital financing requirement and shall be expressed as follows: Estimate of capital financing requirements as at the end of years 1, 2 and 3” (paragraph 50 of the code) The Capital Financing Requirement measures the Council’s underlying need to borrow for a capital purpose i.e. that element of previous and proposed capital spending which has been/will be funded from borrowing. In order to ensure borrowing is maintained within sustainable limits, the Prudential Code requires that net external borrowing does not exceed the total of the capital financing requirement in the preceding year plus the estimates of any additional capital financing requirement for the current and next two financial years. The Director of Finance and Transformation (S151 Officer) can confirm that this requirement will be met.
2020/21 2021/22 2022/23 Estimate Estimate Estimate £m £m £m Non-HRA 639.011 665.323 678.217 HRA 237.027 253.185 271.801 CFR Total 876.038 918.508 950.018 Borrowing 846.847 898.031 938.877
(d) Indicator 4 – Incremental impact of Capital Investment Decisions on Council Tax and Housing Rents “The local authority will forecast the total budgetary requirements for the authority arising from proposed changes to the capital programme and calculate the addition or reduction to the council tax/housing rents that would result. This calculation shall be undertaken for the forthcoming year and the following two financial years or longer timeframe if required to capture the full effect of capital investment decisions on the council tax/housing rents. This prudential indicator will be referred to as estimates of the impact of the new capital investment decisions on the council tax/average weekly housing rents, and shall be expressed in the following manner:
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£xx.xx (Paragraph 39 of the code) The indicator seeks to demonstrate the additional costs, to be funded from the Council Tax and Housing Rents, of the Council’s capital spending plans. Again, these estimates are in line with the General Fund, HRA and Capital Strategy Reports to be considered by Council on 27 February 2020.
2020/21 2021/22 2022/23 Estimate Estimate Estimate £ £ £ Non-HRA (Council Tax) 2.87 8.67 13.42 HRA (average weekly 0.54 1.42 2.79 rent)
1.3 Treasury Management
(a) Acceptance of the CIPFA TM Code
The Council formally adopted the CIPFA’s Treasury Management in the Public Services: Code of Practice and Cross-Sectoral Guidance Notes on 25th February 2010.
(b) Indicator 5 – Authorised Limit for External Debt “The local authority will set for the forthcoming financial year and the following two financial years an authorised limit for its total external debt, excluding investments, separately identifying borrowing from other long term liabilities. This prudential indicator will be referred to as the authorised limit and shall be expressed in the following manner: Authorised limit for external debt = authorised limit for borrowing + authorised limit for other long term liabilities For years 1, 2 and 3.” (Paragraph 54 of the code) With regard to external debt the Council is required to identify limits consistent with the Revenue Budget and Capital Programme. The Authorised Limit is based on a prudent, but not worse case scenario, with additional headroom to allow for unusual cash movements. The authorised limit will be the statutory limit determined under Section 3 (1) of the Local Government Act 2003.
The indicator is calculated by taking the results from indicator six, Operational boundary for external debt, plus the amount of capital spend forecast to be financed from grants and capital receipts. This would cover the unlikely event of contractually committed spend not being financed from grants/contributions and/or capital receipts as planned and having to be financed from borrowing.
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2019/20 2020/21 2021/22 2022/23 Estimate Estimate Estimate Estimate £m £m £m £m Operational debt indicator (indicator 6) 843.356 878.009 930.270 971.877 Possible additional capital spend financed from borrowing 52.652 65.541 42.106 21.447 (grants/receipts not received) Total Amount 896.008 943.550 972.376 993.324 Rounded for indicator 896.000 944.000 972.000 993.000
(c) Indicator 6 – Operational Boundary for External Debt “The local authority will also set for the forthcoming financial year and the following two financial years an operational boundary for its total external debt, excluding investments, separately identifying borrowing from other long term liabilities. This prudential indicator will be referred to as the operational boundary and shall be expressed in the following manner: Operational boundary for external debt = operational boundary for borrowing + operational boundary for other long term liabilities. For years 1, 2 and 3.” (Paragraph 55 of the code) The Operational Boundary for external debt is based on the same estimates which underpin the Authorised Limit but does not include the additional headroom included within the Authorised Limit. The Operational Boundary provides an important tool for in year monitoring. The code goes on to say “It will probably not be significant if the operational boundary is breached temporarily on occasions due to variations in cash flow. However, a sustained or regular trend above the operational boundary would be significant and should lead to further investigation and action as appropriate” The Operational Limit for external debt has been calculated as the current amount of debt, plus additional borrowing, plus ten per cent of the year’s net revenue budget for cash flow purposes in the event of expenditure being higher than income at points during the year.
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2019/20 2020/21 2021/22 2022/23 Estimate Estimate Estimate Estimate £m £m £m £m Debt 616.562 647.897 680.965 733.175 Additional borrowing 31.335 33.068 52.21 41.905 10% Net budget requirement 28.584 31.162 32.239 33.000 Other liabilities 166.875 165.882 164.856 163.797 Calculated Operational Limit 843.356 878.009 930.270 971.877
The Council’s actual external debt at 31 March 2019 was £790 million, and is forecast to be £814 million at the 31 March 2020, all of which related to borrowing for capital purposes.
(d) Indicator 7 – Fixed and Variable Rate Exposure “The local authority will set for the forthcoming financial year and the following two financial years upper limits to its exposure to the effects of changes in interest rates. These prudential indicators will relate to both fixed interest rates and variable interest rates and be referred to respectively as the upper limits on fixed interest rates and variable interest rate exposures. The upper limits on fixed interest rates and variable interest rates exposures may be expressed either as absolute amounts or as percentages. They may be related either to the authority’s net interest on, or to its net principal sum outstanding on, its borrowings/investments.” (Paragraph 67 and 68) The indicator seeks to ensure that the Council limits its exposure to the risk of interest rate changes and the consequent impact on the investment income and interest payments on loans, by restricting the proportion of variable rate borrowing.
2019/20 2020/21 2021/22 2022/23
Estimate Estimate Estimate Estimate % % % % Limits on fixed interest rates 90 90 90 90 based on net debt – Upper Limit Limits on variable interest rates 75 75 75 75 based on net debt – Upper Limit
(e) Indicator 8 – Upper and Lower Limits for the maturity structure of borrowings “The local authority will set for the forthcoming financial year both upper and lower limits with respect to the maturity structure of its borrowings. The prudential indicators will be referred to as the upper and lower limits respectively for the maturity structure of borrowing and shall be calculated as follows:
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Amount of projected borrowing that is fixed and variable rate maturing in each period expressed as a percentage of total projected borrowing that is fixed and variable rate. Where the periods in question are • Under 12 months • 12 months and within 24 months • 24 months and within 5 years • 5 years and within 10 years • 10 years and above” (paragraph 74 of the code) The indicator also seeks to ensure the Council controls its exposure to the risk of interest rate changes by limiting the proportion of debt maturing in any single period. Ordinarily debt is replaced on maturity and therefore it is important that the Council is not forced to replace a large proportion of loans at a time of relatively high interest rates.
Upper Lower
Limit Limit % %
Under 12 Months 35 0
12 months and within 24 months 30 0 24 months and within 5 years 50 0 5 years and within 10 years 75 0 10 years and above 90 0
(f) Indicator 9 – Upper limit for maturity structure of investments “Where a local authority invests, or plans to invest, for periods longer than 364 days, the local authority will set an upper limit for each forward financial year period for the maturing of such investments. These prudential indicators will be referred to as prudential limits for principal sums invested for periods longer than 364 days and shall be calculated as follows: Total principal invested to final maturities beyond the period end.” (paragraph 77 of the code) Under the Prudential Regime Councils are free to invest for periods of greater than 1 year. This indicator sets restrictions on the proportion of investments committed for longer periods in order to limit the risks associated with being unable to meet unexpected cash flows and/or being able to take advantage of future increases in interest rates.
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Upper
Limit % Under 12 Months 100 12 months and within 24 months 25 24 months and within 3 years 20 3 years and within 4 years 15 4 years and within 5 years 10 5 years and above 10
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Appendix 2
Credit and Counterparty Risk Management – Specified and Non-Specified Investments and Limits (Treasury Management Practice (TMP1))
1. Specified and Non-Specified Investments
1.1 Specified investments are investments denominated in sterling, do not exceed 364 days in term, do not involve the acquisition of share or loan capital, are made with the UK Government or a local authority, or with a body or investment scheme meeting the minimum ‘high’ credit quality criteria where applicable. Non-specified investments are anything that does not satisfy the specified investment criteria, i.e. investments with a maturity of greater than 1 year.
1.2 Importantly the acquisition of share capital or loan capital in any body corporate is defined as capital expenditure under Section 16(2) of the Local Government Act 2003. Such investments will have to be funded out of capital or revenue resources and will be classified as ‘non-specified investments’. As a result no such investment instruments, such as equities, are included within this Appendix.
Specified Investments
Minimum ‘High’ Credit Use Criteria Term deposits – banks Short-term F1, Long-term A- In-house Term deposits – building societies Short-term F1, Long-term A- In-house Term deposits – local authorities -- In-house Term deposits – UK part Short-term F1, Long-term A- In-house nationalised banks UK Government support to the UK Sovereign Rating In-house banking sector Debt Management Agency Deposit UK Sovereign Rating In-house Facility (DMADF)– UK Government Money Market Funds AAA In-house
1.3 The original list of banks covered when the support package was initially announced was:
• Abbey (now part of Santander) • Barclays • HBOS (now part of Lloyds Group) • Lloyds TSB • HSBC • Nationwide Building Society • RBS • Standard Chartered
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1.4 Banks eligible for support under the UK bail-out package and which have issued debt guaranteed by the Government are eligible for a continuing Government guarantee when debt issues originally issued and guaranteed by the Government mature and are refinanced. However, no other institutions can make use of this support as it closed to new issues and entrants on 28.2.10. The banks which have used this explicit guarantee are as follows:
• Bank of Scotland • Barclays • Clydesdale • Coventry Building Society • Investec bank • Nationwide Building Society • Rothschild Continuation Finance plc • Standard Life bank • Tesco Personal Finance plc • Royal Bank of Scotland • West Bromwich Building Society • Yorkshire Building Society
1.5 Accounting treatment of investments – the accounting treatment may differ from the underlying cash transactions arising from investment decisions made by the Council. To ensure that the Council is protected from any adverse revenue impact, which may arise from these differences, Treasury Officers in consultation with Link Asset Services will review the accounting implications of any new transactions before they are undertaken.
Non-specified Investments
Maturities of ANY period (not applicable for 2020-21 Investment Strategy )
Minimum Credit Use Max % of Max. Criteria total maturity investments period Term deposits with unrated Market In-house Nil - no longer Nil – no counterparties Capitalisation applicable longer above £500 million applicable
Maturities in excess of 1 year (not applicable for 2020-21 Investment Strategy )
Minimum Credit Use Max % of Max. Criteria total maturity investments period Term deposits – banks Short-term F1, In-house Nil - no longer Nil - no Long-term A+ applicable longer applicable Term deposits – local -- In-house Nil - no longer Nil - no authorities applicable longer applicable
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Appendix 3
Approved Organisations for on-lending of Surplus Funds
Note – the organisations listed below currently meet the specified criteria as per the Investment Policy of the above report, section 26.29 refers.
UK Banks (Maximum Investment Period of up to 1 year)
Approved Proposed Current Investment Investment Investment Limit (max) Limit (max) Limit ** Santander UK plc £15 million £15 million Nil Barclays Bank plc £15 million £15 million £7.5 million Clydesdale Bank (trading as Yorkshire £15 million £15 million Nil Bank) HSBC Bank plc £15 million £15 million £15 million Lloyds Banking Group inc: * £20 million £20 million £10 million Lloyds TSB Bank plc Bank of Scotland plc Royal Bank of Scotland Group inc: * £20 million £20 million £2.5 million Royal Bank of Scotland NatWest Bank plc Ulster Bank Ltd
Note * - The higher limits are based on Lloyds and RBS being part-nationalised therefore carrying additional UK Government security (section 26.31 refers).
Note **: The current investment limits above reflect the action taken as per the creditworthiness criteria included in the Investment Policy stated at paragraph 26.31 in the above report. Current investment limits have been reduced due the previous wholescale downgrade of ratings of some of the above organisations.
UK Building Societies (Maximum Investment Period of up to 1 year)
Approved Proposed Current Investment Investment Investment Limit (max) Limit (max) Limit ** Nationwide Building Society £15 million £15 million £7.5 million Coventry Building Society £15 million £15 million £7.5 million Leeds Building Society £15 million £15 million £5 million Skipton Building Society £15 million £15 million £5 million Yorkshire Building Society £15 million £15 million £5 million
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Other (Maximum Investment Period of up to 1 year)
Approved Proposed Current Investment Investment Investment Limit (max) Limit (max) Limit Any Local Authority £15 million £15 million £15 million (each) (each) (each) Debt Management Agency Deposit Unlimited Unlimited Unlimited Facility (DMADF) *** Money Market Funds £15 million £15 million £15 million (each) (each) (each)
Note *** - The unlimited investment limit for the DMADF is based on the current uncertainties within the banking sector, and if further bank failures occur, this account would provide for the security of the Council’s cash surpluses.
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Appendix 4
Minimum Revenue Provision (Repayment of Debt) Policy Statement 2019-20
1. What is Minimum Revenue Provision?
1.1 Capital expenditure is generally expenditure on assets which have a life expectancy of more than one year e.g. buildings, vehicles, machinery etc. In accordance with proper practice, the financing of such expenditure is spread over several years in order to try to match the years over which such assets benefit the local community through their useful life. The manner of spreading these costs is through an annual charge known as Minimum Revenue Provision (MRP), which is determined by the Council under guidance.
2. Statutory duty
2.1 The Local Authorities (Capital Finance and Accounting) (England) Regulations 2003 (as amended by Statutory Instrument 2008 no. 414 s4) lay down that:
“A local authority shall determine for the current financial year an amount of minimum revenue provision that it considers to be prudent.”
3. Government guidance
3.1 Along with the above duty, the Government issued guidance which came into force on 31 March 2008 which requires that a Statement on the Council’s policy for its annual MRP should be submitted to the full Council for approval before the start of the financial year to which the provision will relate.
3.2 The Council is legally obliged to “have regard” to the guidance, which is intended to enable a more flexible approach to assessing the amount of annual provision than was required under the previous statutory requirements. Although it is up to each Council to determine for itself how to calculate its MRP, the guidance suggests four methodologies, with an overriding recommendation that the Council should make prudent provision to redeem its debt liability over a period which is reasonably commensurate with that over which the capital expenditure is estimated to provide benefits. The requirement to ‘have regard’ to the guidance therefore means that:
• Although four main options are recommended in the guidance, there is no intention to be prescriptive by making these the only methods of charge under which a local authority may consider its MRP to be prudent.
• It is the responsibility of each authority to decide upon the most appropriate method of making a prudent provision, after having had regard to the guidance.
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4. Method
4.1 The Policy to be adopted for 2019/20 incorporates the following methods;
4.1.1 For capital expenditure incurred before 1 April 2008 or which in the future will be Supported Capital Expenditure, the MRP Policy will be:
Calculating MRP in accordance with the annuity method over 60 years. The 60 year repayment period is considered a reasonable average assumption for the lives of the assets funded by capital expenditure. This method will ensure the debt is fully repaid after 60 years, which was not the case under the existing method.
4.1.2 For capital expenditure incurred from 1 April 2008 for all unsupported borrowing (excluding PFI and finance leases) the MRP Policy will be:
Asset Life Method – MRP will be calculated in accordance with the annuity method based on the estimated life of the asset, in accordance with the proposed regulations (this option must be applied for any expenditure capitalised under a Capitalisation Direction), using the annuity method. This method also ensures that the debt is fully repaid at the end of the estimated useful lives of each asset.
4.1.3 For PFI and Finance Lease Assets the MRP Policy will be:
Asset Life Method – MRP will be calculated in accordance with the annuity method based on the estimated life of the asset, in accordance with the proposed regulations. This method also ensures that the debt is fully repaid at the end of the estimated useful lives of each asset.
4.1.4 The specified rate of interest will be the average interest rate of the Council’s debt as at the end of the year in which the annuity rate is to be applied.
5. Timing
5.1 This statement shall take effect from 1 April 2019 and shall take precedence over any statements previously approved.
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Appendix 6
Summary of the Report Content
1. Background
1.1 The scope and content of the Treasury Management Strategy Statement report are in line with the requirements of the Treasury Management Code of Practice and the Prudential Code for Capital Finance, and therefore the report is more detailed than standard committee reports.
1.2 The scope and content of the Treasury Management Strategy Statement report is also consistent with previous reports submitted to Members, in line with the reporting requirements stated within the Strategy Statement, and is consistent with the Treasury Management reports of other Local Authorities.
1.3 Members are provided with 3 reports on an annual basis as follows:
• Treasury Strategy Statement (this report) • A Mid-Year Treasury Management Report – update on progress of capital position and Prudential Indicators • An Annual Treasury Management Report – actual Prudential Indicators and actual treasury operations as compared to estimates.
2. Main Content of Report and Key Areas for Consideration
2.1 The report covers the following key areas of Treasury Management:
• Investment Strategy • Prudential and Treasury Indicators • Minimum Revenue Provision Policy Statement
3. Investment Strategy
3.1 The Investment Strategy provides clear criteria as to creation of the Council’s approved lending list and selection of counterparties to be included.
3.2 The criterion covers investment limits and duration of investment.
3.3 The Strategy covers the Council’s creditworthiness policy, stating how the Council monitors the approved list of counterparties.
4. Prudential and Treasury Indicators
4.1 These indicators cover an assessment of the affordability of the Council’s capital plans and the impact of these plans on the General Fund and HRA revenue budgets. They also set limits on the amount of borrowing the Council can undertake and the structure of the Council’s debt portfolio in terms of type of debt held and maturity periods.
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4.2 These indicators are set for the forthcoming financial year and subsequent 2 years, and are in line with the Council’s Budget Report and Medium Term Financial Plan.
5. Minimum Revenue Provision Policy Statement
5.1 The Council is required to pay off an element of the accumulated General Fund capital spend each year through a revenue charge – the minimum revenue provision (MRP). The provision (revenue charge) is in respect of capital expenditure financed from borrowing. The MRP statement provides the basis in which this is done.
5.2 There are options available to the Council in how the revenue charge is derived, so long as the there is a prudent provision. The options recommended for approval are based on the ones which have the least impact on the revenue budget in each year.
6. Options Available
6.1 Although the content and criteria stated in the Treasury Management Strategy are statutory requirements, there are some options available to the Council in how this is managed, in terms of the following:
• Investment Options – alternative investment products, counterparties, limits and durations. • Prudential Indicators – alternative limits for certain indicators, i.e. debt maturity profile, interest rate exposure. • Minimum Revenue Provision – alternative options for the revenue charge.
6.2 The options proposed are based on the Council investing surplus monies with low risk counterparties in line with the Council’s low risk appetite. This provides the Council with adequate liquidity and security of funds before considering investment return.
7. Member Training
7.1 It is a requirement of the Code that all officers and members with the responsibility for treasury management receive adequate training. Members last attended a Treasury Management update session in November 2017.
7.2 The Council’s Treasury advisors, Link Asset Services, Treasury Solutions, are also able to provide the required training as part of their advisory contract with the Council.
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8. Conclusion
8.1 The Treasury Management Strategy Statement (including Prudential Indicators) is linked to and underpins the annual General Fund and HRA Revenue Budget Setting Report and Capital Strategy, and is therefore not subjective.
8.2 The other important element of the Treasury Management Strategy Statement is in relation to the borrowing and investment objectives which must be robust and satisfy the Council’s priorities and risk appetite.
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Appendix 7 GLOSSARY OF TERMS
Base Rate Minimum lending rate of a bank or financial institution in the UK determined by the Bank of England.
Basis Point 1/100 th of 1%, i.e. 0.01%.
Call Account Deposits/investments placed with a bank or other financial institutions which are available immediately, i.e. no advance notice is required.
Capital Expenditure Expenditure on the acquisition of fixed assets which has a long term value to the Council (e.g. the purchase of land, erection of buildings), or expenditure that adds to the value of these assets and not just maintains their existing value.
Capital Financing The total historic outstanding capital expenditure which has not Requirement (CFR) yet been paid for from either revenue or capital resources. This is the cumulative total of the Council’s borrowing need.
Capital Grants Monies provided to local authorities, usually from Government departments, for capital expenditure only.
Capital Receipts These are proceeds from the sale of capital assets such as land or property. These receipts can be used to fund the capital programme but are not available to support the Revenue Budget.
Counterparty Another (or the other) party to an agreement or other market contract (e.g. lender or borrower). In the Council’s case this generally relates to a bank or building society.
Credit Default Swap This provides protection (insurance) to a financial institution following a loan or investment against any potential default, i.e. protection against non-repayment of loan or investment.
Credit Outlook A formal indication by a credit rating agency that it anticipates a change in a particular credit rating of a bank or other financial institution at some time in the foreseeable future.
Credit Rating An assessment of the creditworthiness of a bank or other financial institution, made by a credit rating agency, i.e. Fitch, Moody’s and Standard & Poor’s.
Credit Rating Agency Independent organisations that assess the credit quality of corporate and government debt. The main agencies are Moody’s, Standard & Poor’s and Fitch.
Credit Watch Attached to a bank or other financial institution in which a downgrading or upgrading of the credit rating could be imminent.
Creditworthiness A measure of the ability and the willingness of a bank or other financial institution to honour their financial obligations.
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Debt Cap A limit set on the council housing borrowing requirement for each local authority.
Debt Rescheduling Refinancing of current debt/loans to generate revenue savings if rates are favourable.
Investment Instrument Investment options available to local authorities, i.e. fixed term deposits, notice accounts.
Liquidity The ability to convert an asset (investment) easily into cash quickly without affecting the asset’s price or value.
Maturity The end date of a loan, borrowing, investment or other form of capital financing.
Minimum Revenue Local authorities are required each year to set aside some of Provision (MRP) their revenues as provision for debt repayment. The provision (revenue charge) is in respect of capital expenditure financed by borrowing.
Money Market Consists of financial institutions (e.g. banks and building societies) and dealers in money and credit.
Money Market Fund A well rated, highly diversified pooled investment vehicle whose assets mainly comprise of short term instruments.
Non -Specified Anything that does not satisfy the specific investment criteria, Investments i.e. investments with a term of greater than 1 year.
Notice Account Deposits/investments placed with a bank or other financial institutions which are available at notice, i.e. 15/30 day notice to withdraw is required.
PFI Private Finance Initiative – a Government initiative in which private sector companies usually design, build and operate a public facility for a set period of time, often 25 years.
Prudential and As required by The Prudential Code, requires local authorities Treasury Indicators to self-regulate the affordability, prudence and sustainability of (see below for description their capital plans, buy setting estimates and limits, and of each indicator) publishing actuals, for a range of indicators.
Prudential Borrow ing Permissible borrowing within defined affordable limits.
Prudential Code Local Authorities determine their own programmes of capital (CIPFA) investment in fixed assets that are central to the delivery of quality local public services. The Prudential Code has been developed as a professional code of practice to support them in taking these decisions. The Prudential Code underpins the overall system of capital finance. The objectives of the Prudential Code are to ensure, within a clear framework, that Page 54 of 56 Page 320 of 324
the capital investment plans of local authorities are affordable, prudent and sustainable.
PWLB Public Works Loans Board – a statutory body operating within the Debt Management Office of the HM Treasury and is responsible for lending money to local authorities and other prescribed bodies.
Risk Appetite The level of risk Local Authorities wish to take in the lending of surplus monies. The Council operates a low risk appetite, i.e. only investing with low risk counterparties, where the security and liquidity of cash are more important than yield (return). Specified Investments Investments that are made in sterling, do not exceed 364 days in term, do not involve the acquisition of share or loan capital, are made with the UK Government or a local authority, or with a financial institution and meet the minimum credit criteria.
Treasury Management Provides Local Authorities with standards and guidance to Code of Practice support and underpin their overall Treasury Management (CIPFA) activities.
Yie ld (Return) The return on an investor’s capital investment. The higher the yield the higher the risk of the capital invested.
Prudential and Treasury Indicators
Affordability of Capital Plans:
Indicator 1 – Capital This details the Council’s approved capital spending plans for Expenditure the next 3 years and reports on the outturn from the previous financial year. These estimates are reporting decisions agreed previously in the Capital Programme report, and therefore there is no subjectivity to this indicator.
Indicator 2 - Ratio of This shows the revenue costs (the capital financing costs less Financing Costs to Net investment income earned) as a percentage of the total Review Stream revenue budget. There is a separate calculation for the General Fund and the HRA. Again, these estimates have been agreed by Committee through the Revenue Budget setting report or in the Medium Term Financial Strategy.
Indicator 3 – Capital The CFR measures the Council’s overall borrowing Financing Requirement requirement for capital purposes, i.e. that element of previous (CFR) and proposed capital spending which has been/will be funded from borrowing. The Prudential Code requires that net external borrowing does not exceed the CFR.
Indicator 4 – This indicator seeks to demonstrate the additional costs, to be Incremental Impact of funded from the Council Tax and Housing Rent of the Capital Investment Council’s capital spending plans, i.e. the capital plans to be Decisions on Council funded from borrowing. These estimates are in line with the Tax and Housing Rents General Fund and HRA Revenue Budget setting reports.
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Treasury Management
Indicator 5 – The Council is required to set external borrowing limits Authorised Limit for consistent with the Revenue Budget and Capital Programme. External Debt The Authorised Limit is based on a prudent limit, with additional headroom to allow for unusual cash movements.
Indicator 6 – The Operational Boundary is based on the same estimates as Operational Boundary the Authorised Limit, but does not include any additional for External Debt headroom. The Operational Boundary is the current debt plus additional planned borrowing, plus 10% of next year’s revenue budget for cash flow purposes.
Indicator 7 – Fixed and This indicator seeks to ensure that the Council limits its Variable Interest Rate exposure to the risk of interest rate changes and the Exposure subsequent impact of such changes on the interest payments on loans (a revenue expense), by restricting the proportion of variable rate borrowing.
Indicator 8 – Upper and This indicator also seeks to ensure the Council controls its Lower Limits for the exposure to the risk of interest rate changes by limiting the maturity structure of proportion of debt due to be repaid in any one year. Debt is borrowings ordinarily replaced on maturity and therefore it is important that the Council is not forced to replace a large proportion of loans at a time of relatively high interest rates (aimed at mitigating any potential impact on the revenue budget).
Indicator 9 – Upper Under the Prudential Code councils are free to invest for Limit for the maturity periods of greater than 1 year. This indicator sets restrictions structure of on the proportion of investments committed for longer periods Investments in order to limit the risks associated with being unable to meet unexpected cash flows and/or being able to take advantage of future increases in interest rates.
Page 56 of 56 Page 322 of 324 APPENDIX 5 MRP REVIEW & PROPOSALS - PFI ASSETS
CURRENT METHOD PROPOSED METHOD Asset Life - 60 2.50%
Winifred Discount Factor Holtby & Victoria Annual MRP Finance Lease Finance Lease Annuity Annual MRP based on assumed Net Present Value of Year Extra Care Andrew Marvel Kingswood Oakfield Tweendykes Orchard Park Dock Charge Liability c/f Year Liability b/f Rate Charge Year Saving Year discount rate of 2.5% cash flows £ £ £ £ £ £ £ £ £ £ % £ £ % £
2019/20 2,524,305 929,617 849,802 420,589 1,192,007 115,849 63,404 6,095,573 172,915,809 1 2019/20 172,915,809 3.2628% 961,978 2019/20 5,133,595 1 1.0000 5,133,595 2020/21 2,778,200 921,978 842,816 417,135 1,152,725 133,583 65,941 6,312,378 2 2020/21 993,365 2020/21 5,319,013 2 0.9756 5,189,281 2021/22 2,681,256 931,031 851,109 421,221 1,270,807 142,731 68,932 6,367,085 3 2021/22 1,025,777 2021/22 5,341,309 3 0.9518 5,083,935 2022/23 2,804,706 841,705 769,353 380,868 1,476,531 152,830 295,466 6,721,460 4 2022/23 1,059,246 2022/23 5,662,214 4 0.9286 5,257,929 2023/24 2,662,245 1,034,085 945,444 467,765 1,607,293 169,942 6,886,775 5 2023/24 1,093,807 2023/24 5,792,968 5 0.9060 5,248,143 2024/25 2,772,697 1,104,924 1,010,301 499,754 1,594,064 23,038 7,004,778 6 2024/25 1,129,495 2024/25 5,875,283 6 0.8839 5,192,894 2025/26 3,112,909 1,167,820 1,067,894 528,150 1,557,143 247,315 7,681,230 7 2025/26 1,166,349 2025/26 6,514,881 7 0.8623 5,617,762 2026/27 2,030,786 1,152,415 1,053,822 521,174 1,592,117 286,005 6,636,319 8 2026/27 1,204,404 2026/27 5,431,914 8 0.8413 4,569,681 2027/28 3,302,158 1,191,079 1,089,242 538,621 1,797,409 300,575 8,219,083 9 2027/28 1,243,702 2027/28 6,975,382 9 0.8207 5,725,021 2028/29 2,703,720 1,156,987 1,058,070 523,200 2,038,675 141,331 7,621,982 10 2028/29 1,284,281 2028/29 6,337,701 10 0.8007 5,074,777 2029/30 3,066,417 1,431,282 1,309,175 647,078 2,214,788 291,996 8,960,736 11 2029/30 1,326,185 2029/30 7,634,552 11 0.7812 5,964,100 2030/31 3,371,471 1,486,831 1,360,078 672,134 2,337,207 348,876 9,576,598 12 2030/31 1,369,455 2030/31 8,207,142 12 0.7621 6,255,031 2031/32 2,058,703 1,598,809 1,462,640 722,674 2,661,298 511,873 9,015,997 13 2031/32 1,414,138 2031/32 7,601,859 13 0.7436 5,652,407 2032/33 2,892,003 1,621,494 1,483,482 732,873 3,053,267 533,076 10,316,194 14 2032/33 1,460,278 2032/33 8,855,916 14 0.7254 6,424,262 2033/34 2,978,999 1,853,524 1,695,952 837,628 3,386,621 584,671 11,337,394 15 2033/34 1,507,924 2033/34 9,829,470 15 0.7077 6,956,583 2034/35 2,939,315 1,928,308 1,764,512 871,341 3,585,560 660,307 11,749,343 16 2034/35 1,557,125 2034/35 10,192,218 16 0.6905 7,037,376 2035/36 2,154,499 2,032,908 1,860,377 918,514 3,829,798 10,796,097 17 2035/36 1,607,931 2035/36 9,188,166 17 0.6736 6,189,378 2036/37 2,787,607 2,123,575 1,943,504 959,383 1,657,365 9,471,434 18 2036/37 1,660,394 2036/37 7,811,040 18 0.6572 5,133,377 2037/38 3,553,940 1,607,256 1,471,053 726,069 7,358,317 19 2037/38 1,714,570 2037/38 5,643,747 19 0.6412 3,618,578 2038/39 3,221,834 3,221,834 20 2038/39 1,770,513 2038/39 1,451,321 20 0.6255 907,841 2039/40 3,773,669 3,773,669 21 2039/40 1,828,281 2039/40 1,945,388 21 0.6103 1,187,214 2040/41 4,083,182 4,083,182 22 2040/41 1,887,934 2040/41 2,195,247 22 0.5954 1,307,020 2041/42 2,571,666 2,571,666 23 2041/42 1,949,534 2041/42 622,133 23 0.5809 361,375 2042/43 1,136,683 1,136,683 24 2042/43 2,013,143 2042/43 - 876,460 24 0.5667 -496,687 2043/44 - 25 2043/44 2,078,828 2043/44 - 2,078,828 25 0.5529 -1,149,333 2044/45 26 2044/45 2,146,656 2044/45 - 2,146,656 26 0.5394 -1,157,886 2045/46 27 2045/46 2,216,697 2045/46 - 2,216,697 27 0.5262 -1,166,503 2046/47 28 2046/47 2,289,023 2046/47 - 2,289,023 28 0.5134 -1,175,184 2047/48 29 2047/48 2,363,710 2047/48 - 2,363,710 29 0.5009 -1,183,930 2048/49 30 2048/49 2,440,833 2048/49 - 2,440,833 30 0.4887 -1,192,740 2049/50 31 2049/50 2,520,472 2049/50 - 2,520,472 31 0.4767 -1,201,617 2050/51 32 2050/51 2,602,710 2050/51 - 2,602,710 32 0.4651 -1,210,559 2051/52 33 2051/52 2,687,631 2051/52 - 2,687,631 33 0.4538 -1,219,568 2052/53 34 2052/53 2,775,323 2052/53 - 2,775,323 34 0.4427 -1,228,644 2053/54 35 2053/54 2,865,877 2053/54 - 2,865,877 35 0.4319 -1,237,787 2054/55 36 2054/55 2,959,385 2054/55 - 2,959,385 36 0.4214 -1,246,999 2055/56 37 2055/56 3,055,943 2055/56 - 3,055,943 37 0.4111 -1,256,279 2056/57 38 2056/57 3,155,653 2056/57 - 3,155,653 38 0.4011 -1,265,628 2057/58 39 2057/58 3,258,615 2057/58 - 3,258,615 39 0.3913 -1,275,047 2058/59 40 2058/59 3,364,937 2058/59 - 3,364,937 40 0.3817 -1,284,536 2059/60 41 2059/60 3,474,729 2059/60 - 3,474,729 41 0.3724 -1,294,095 2060/61 42 2060/61 3,588,102 2060/61 - 3,588,102 42 0.3633 -1,303,726 2061/62 43 2061/62 3,705,175 2061/62 - 3,705,175 43 0.3545 -1,313,428 2062/63 44 2062/63 3,826,067 2062/63 - 3,826,067 44 0.3458 -1,323,203 2063/64 45 2063/64 3,950,904 2063/64 - 3,950,904 45 0.3374 -1,333,050 2064/65 46 2064/65 4,079,814 2064/65 - 4,079,814 46 0.3292 -1,342,970 2065/66 47 2065/66 4,212,930 2065/66 - 4,212,930 47 0.3211 -1,352,965 2066/67 48 2066/67 4,350,390 2066/67 - 4,350,390 48 0.3133 -1,363,033 2067/68 49 2067/68 4,492,334 2067/68 - 4,492,334 49 0.3057 -1,373,177 2068/69 50 2068/69 4,638,910 2068/69 - 4,638,910 50 0.2982 -1,383,396 2069/70 51 2069/70 4,790,269 2069/70 - 4,790,269 51 0.2909 -1,393,691 2070/71 52 2070/71 4,946,565 2070/71 - 4,946,565 52 0.2838 -1,404,063 2071/72 53 2071/72 5,107,962 2071/72 - 5,107,962 53 0.2769 -1,414,512 2072/73 54 2072/73 5,274,625 2072/73 - 5,274,625 54 0.2702 -1,425,039 2073/74 55 2073/74 5,446,725 2073/74 - 5,446,725 55 0.2636 -1,435,644 2074/75 56 2074/75 5,624,441 2074/75 - 5,624,441 56 0.2572 -1,446,328 2075/76 57 2075/76 5,807,955 2075/76 - 5,807,955 57 0.2509 -1,457,091 2076/77 58 2076/77 5,997,457 2076/77 - 5,997,457 58 0.2448 -1,467,935 2077/78 59 2077/78 6,193,142 2077/78 - 6,193,142 59 0.2388 -1,478,859 2078/79 60 2078/79 6,395,212 2078/79 - 6,395,212 60 0.2330 -1,489,865 Page 323 of 324 67,962,970 26,115,628 23,888,627 11,806,172 38,004,674 4,643,996 493,743 172,915,809 172,915,809 0
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