Agenda item

The next report presented by the Leader was the Capital Programme Outturn report for 2022/23. This was the final report of the year on capital activity which provided an overview of the final amount of capital expenditure incurred in the year, compared with the allocated budget. As part of this, the report outlined the level of slippage and underspend incurred and provided an update on the level of available capital headroom.

In addition to this, the report outlined the additions to the programme that were identified and requested authorisation for their inclusion from Cabinet.

o   The first section outlined the movement in the capital budget since the last report was presented to Cabinet, in February.

o   The total value of additions and amendments was £51m, however more than half of that was formally approved as part of agreeing the Capital Strategy for 2023/24. Therefore, the value of additions that required approval, the majority of which were externally grant funded, stood at £18.5m. These additions took the total budget for the year to £91.8m.

o   A further breakdown of these additions was given in Appendix A.

Against the revised budget, total expenditure of £61.2m was incurred, resulting in a variance of £30.6m.

This variance comprised a net underspend of £47,000 and more significantly, slippage totalling £30.553m. It was necessary for this slippage to be carried forward into future years in order for ongoing and previously approved schemes to be completed.

The overall value of slippage had increased by £3m since the last report. Relatively speaking, this was a small increase compared to that seen in previous years. This was mainly due to the fact that a number of large schemes were now underway but also because of reprofiling undertaken in previous months.

It was noted, however, that the overall level of slippage was still significant and was something that needed to be managed robustly in future years.

In addition, a further review of the 2023/24 capital budget was required, to ensure that it reflected a realistic profile. Currently, the budget stood at nearly £95m and would be a challenge to deliver. It was, therefore, necessary to reprofile this across the remainder of the programme to increase the chances of delivering against the budget and minimising the level of slippage reported in future years.

The report also detailed the level of capital headroom currently available, which could be used to support new schemes.

This now stood at £9.774m, after allowing for two pre-commitments against this funding.

The majority of the balance was held within the capital expenditure reserve, following Cabinet’s decision in February to transfer the full value of the residual 2021/22 revenue underspend (£7.9m) to that reserve. 

Whilst the headroom recently had a significant boost, there remained a need to tightly control its use, so that it was available for only the most critical issues, as and when they emerged.

In addition, any opportunity to further increase in the headroom would need to be taken, so that it was possible to support as many priorities as possible and also ensure that sufficient funding existed to respond to any cost increases in relation to existing schemes, driven by rising construction industry costs.

Comments of Cabinet Members:

§  Councillor Batrouni welcomed the headroom element in the report. Councillor Batrouni reflected that interest rates were high, and with this in mind, it was prudent to increase the headroom to give the Council space and flexibility going forward, therefore the report was welcomed.

§  Councillor Davies agreed with comments of her colleague regarding the capital headroom as well as showing a level of prudency regarding projects going forward.

Decision:

That Cabinet

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

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

3.            Approved slippage of £30.553m from the 2022/23 budget into future years.

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