Agenda item

The Leader introduced the report which provided an overview of the updated capital budgets for this financial year, alongside the projected outturn position as at the end of March 2023.

This represented the third capital monitoring report of the 2022/23 financial year.

The last report received by Cabinet was the October Monitoring and Additions report. There were several additions and amendments made to the programme since then.  Most of which related to the addition of specific grant-funded schemes.  These total £8.283m, detailed in Appendix A, impacted across multiple financial years, with £1.4m added to 2022/23.

Cabinet were asked to approve these additions to the programme. 

The total net impact of these additions and revisions would increase the total budget for 2022/23 to £89.8m.

Against the revised budget of £89.8m in 2022/23, expenditure totalling £61.3m was projected.  This £28.5m variance was comprised of £27m of slippage and £1.5m of “true” net underspends and overspends.

The level of slippage increased by approximately £10m since the last report, due to delays and challenges across various schemes.

Cabinet was only asked to note the current forecast slippage, not to approve slippage at this stage of the year. Instead, slippage was being identified in each monitoring report and only in the final report of the year would Cabinet be asked to approve a total amount to be transferred to future years.

The report also outlined the current position in relation to the capital headroom which was made up of:

·        £57k borrowing headroom.

·        £258k capital expenditure reserve (this includes the potential commitment of £1.267m for band B)

·        £1.474m of uncommitted capital receipts

The balance of headroom available took into accounts commitments already reflected within the Capital Programme, as well as provisional additional funding to take the overall Band B funding envelope to £90m, therefore, the capital headroom was currently £1.789m.

This overall amount of headroom, which steadily reduced over recent years, needed to be carefully managed and monitored in order to ensure that it was utilised when needed for the most critical issues over the medium term.

This need for careful monitoring and prioritisation of resources was heightened considering the challenges currently being faced in relation to rising construction industry costs and the competing priorities for capital resources.

Opportunities therefore, to add one-off contributions to the headroom needed to be taken as and when available, to ensure that the Council was able to react to emerging pressures and ensure that the full programme could be delivered.

Comments of Cabinet Members:

§  Councillor Batrouni emphasised that the Council was still investing in the city, its services and schools.  Cabinet budgeted an extra £39M for schools as well as £18M in economic regeneration for the city.  This was a commitment to the regeneration projects and schools within Newport.

Decision:

That Cabinet

1.            Approved the additions to the Capital Programme requested in the report (Appendix A).

2.            Noted the predicted capital expenditure outturn position for 2022/23.

Noted the available remaining capital resources (‘headroom’) and the earmarked usage of that resourcing.