Agenda item

The Leader introduced the next report for consideration, which was the Capital Programme monitoring and additions report for July 2023.

This was the first monitoring report of the year on capital activity which provided an overview of the updated capital programme, alongside the projected outturn position as of July of this year.

The report outlined the changes made to the programme following a reprofiling exercise that was recently completed and provided an update on the level of available capital headroom. The report also detailed the additions to the programme that were identified and sought Cabinet’s approval for these additions.

The first section of the report outlined the movement in the capital budget since the last report presented to Cabinet, which was the 22/23 Outturn report.

The net value of additions and amendments to the current capital programme since then was £5.9m, and a breakdown of these additions was provided in Appendix A.  Cabinet was required to approve these additions and amendments.

As a result of those additions, as of July 2023, the current budget for 2023/24 increased to over £100m, which was very difficult to deliver, when compared to the level of expenditure incurred in previous years.

An exercise was therefore undertaken to review the anticipated profile of spend for each scheme over the summer, with the aim of ensuring a more realistic starting budget was reported against during the year. As a result, this year’s budget was reduced by £15.8m, with corresponding increases in future years. Even following that exercise, however, the revised capital programme for 2023/24 was still £84.9m, which was still substantial and was challenging to deliver in full.

As part of the recommendations to this report, Cabinet was asked to approve the slippage that was identified following the reprofiling exercise. However, following the same approach as last year, any further slippage identified throughout the year would only be subject to approval as part of the final outturn report, once the final position was known.

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

This now stood at £11.942m, having increased by £2.2m since outturn following our decision made in July Cabinet to transfer part of the revenue underspend from 2022/23 into the capital expenditure reserve.

Since then, a provisional amount of £600k was committed against the headroom, in relation to the potential demolition of Millbrook Primary School. That decision was subject to a separate report within this meeting and, if agreed, would reduce the headroom to £11.3m.

Whilst the level of headroom may currently appear reasonable, there remained a need to tightly control its use, so that the Council was able to respond to critical issues, as and when they emerged. This required clear prioritisation of only the most pressing and urgent issues.

In addition, any opportunity to further increase the headroom needed to be taken, so that it was possible to support as many priorities as possible and ensure that sufficient funding existed to respond to any issues that arose.

The 2021 Treasury Management Code introduced a new requirement that monitoring of the treasury management indicators and non-treasury management indicators should be reported on a quarterly basis.

Historically, these were reported twice a year, via the Treasury Management monitoring reports. However, to comply with the new requirement, these were detailed in Appendix D of the report. As of 31st July 2023, the Authority complied with all its treasury management indicators.

Comments of Cabinet Members:

§   Councillor Davies again mentioned the challenging times and the difficulty in sourcing materials and a skilled workforce which created constraints on our building programme.  The Cabinet Member remained committed to improving the lives of residents in Newport to ensure plans were delivered.

§   Councillor Harvey agreed with Councillor Davies’ comments.

Decision:

Cabinet

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

§  Noted the predicted capital expenditure outturn position for 2023/24.

§  Approved the reprofiling of £15.8m from the 2023/24 budget into future years.

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

§  Noted the inclusion of the Treasury Management prudential indicators, included within the report.