Agenda item

The Leader presented the report advising Cabinet that the report was an iterative one, and highlighted the changes to the capital programme since Members last considered capital monitoring as at September 2021 and sought to add in new schemes totalling +£4.84m, predominantly grant related.

The report captured the movements and forecasts up to the end of November 2021.  The September capital programme budget reported was £65.99m.

There were amendments (net reductions) of -£3.49m, most notably the handing back of grant in respect of A467 improvements which would  not be progressed beyond design stage in the current financial year.

Service colleagues identified a further -£9.81m slippage, in respect of schemes progressing at a slower rate financially than originally anticipated when service colleagues indicated annual expenditure plans, moving that part of the budget into 2022-23.

When added to the September budget, the revised capital programme budget for 2021/22 now totalled £57.53m.

The focus of the monitoring was primarily upon the current year (2021-22).  The capital programme recognised however that larger schemes would have expenditure that crossed financial years, such that the convention was to establish a five-year programme envelope, with the current one due to expire at the end of 2022-23.  The presentation of multi-year tables to 2024-25 in the report implied a seven year programme, but was mainly recognition that 21^st Century schools and City Deal commitments extended beyond the end of 2022-23.

Against the revised 2021-22 budget, spend of £57.58m was projected, resulting in a temporary overspend of £51k.  These overspends were anticipated to be funded through additional grant bids, but where such financing was not forthcoming they would instead become a call upon the various annual sums maintenance budgets.

Service departments were successful in sourcing additional funding in the form of grants to supplement the traditional programme.  This was certainly most welcome in enhancing the Council’s ability to maintain and upgrade infrastructure but tended to be specific to certain years.  This resulted in an increasing volume of slippage being rolled forward towards the end of the current programme envelope, such that the 2022-23 starting budget was anticipated to be above £100m, which was far in excess of traditional spending levels and anticipated current programme management capacity.  This figure had the potential to increase further based on past experience of last quarter considerations such as inclement weather, supply chain issues, and more recently Covid induced absences affecting progress predictions made earlier in the year.

The magnitude of slippage involved may impact upon the capacity to introduce new schemes into the first couple of years of the new programme, owing to the fact that completion of the existing programme might take priority.

The remainder of the report identified the running balances of available resourcing to support new schemes and initiatives, in the form of capital reserves and receipts and treasury headroom.

The Capital Receipts uncommitted running balance (£2.65m) in the report was an increase on the September figure, due to the inclusion of receipt activity that has occurred (extra £1.47m).  The level of financing required to come from Capital Receipts remained the same as reported in September (£4.3m).

The Capital Expenditure Reserve had a running balance of £4.47m, but might help afford the Council’s share of an enhanced schools Band B programme (£1.3m) and the Council’s share of the demolition costs of Newport Centre (£250k).  Neither of these figures were approved by Members yet and as such only represented pre-commitments in this Capital Monitoring report.

The £4.5m extra capital expenditure headroom was originally built into the debt financing budget in anticipation of a need to facilitate additional projects before the end of current programme window (end 2022-23).  The table in the report identified there was no additional commitments identified since the September report, which left an uncommitted £391k for new schemes that could arise between now and end of March 23 that were most appropriate to be afforded by borrowing.

The implication of this was that there would be limited internal headroom without continuing to rely heavily upon an externally funded grant bidding process.  The progress of schemes would increasingly be influenced by advanced planning and design to act at pace when grant funding sources were released, and having the necessary project management capacity to address/satisfy multiple and diverse projects.

Comments of Cabinet Member:

§  Councillor Cockeram mentioned that the Rosedale Annex building works was not funded by health, but through the Regional Partnership Board.  The Leader asked that officers note this for future reference.

Decision:

That Cabinet:

1.        Approved the additions and amendments to the capital programme (Appendix A), including the use of reserves and capital receipts requested in the report

2.        Approved slippage/re-profiling of £9,811k into future years

3.        Noted the update on the remaining capital resources (‘headroom’) up to and including 2022/23

4.        Noted the capital expenditure forecast position as at November 2021