Agenda item

A report from the Executive Director Resources is attached.  (Key decision -  reference number 5353)

Councillor Mary Maguire (Cabinet Member for Finance and Procurement) introduced the report of the Executive Director Resources setting out the Ten Year Capital Programme 2022/23 to 2031/32.

NOTED

1.    The programme was based on the Capital Strategy approved by Council on 22 September 2021, supporting the delivery of the Council’s corporate objectives.

2.    The ten year cycle improved strategic planning with greater transparency and alignment with the Treasury Management Strategy and MTFP.

3.    The investment plans were summarised, in particular for housebuilding.

4.    The overall programme had decreased by £92.2m from last years. Key reductions in the programme were reported, including the requirement for Joyce & Snells.

5.    The Capital Programme financing was set out in Chart 2 in the report. Borrowing was regulated by the Prudential Code. Debt was kept to an affordable level, and within the Council’s self-imposed borrowing cap.

6.    The Development and Infrastructure Financial Framework (DIFF) was developed to strengthen the approval of new capital projects and improve data.

7.    An overview of the programme was provided in Table 1, and the funding summary in Table 2.

8.    Information on debt charges and on grants and contributions was also included in the report.

9.    Section 106 (s106) and Community Infrastructure Levy (CIL) income was highlighted.

10. The Chair raised the progress on the Meridian Water project, to which much of the borrowing was related, and the commitment to Joyce & Snells. Detailed analysis of the Capital Programme was included in appendices to the report.

11. Councillor Barnes raised the Dugdale refurbishment, and engagement with stakeholders in coming weeks on proposals.

12. The Executive Director Place noted the approach to allocation of s106 and CIL funding in the capital programme, which is in line with previous Cabinet decisions and enables contributions from development to be reinvested in the borough’s community facilities and infrastructure.

Alternative Options Considered:

1.    The Ten year capital programme and overarching capital strategy have been developed using the DIFF Financial Framework which guarantees fair and consistent consideration of all options available for the deployment of limited resources in the achievement of stated objectives.

2.    A complete and robust consideration of all options has therefore been embedded in the development and refresh of the capital programme with input from a multi-disciplinary Capital Finance Board.

DECISION:  Cabinet agreed to recommend to Council to:

Approve the 2022/23 Capital Programme and to note the 2023/24 to 2031/32 Ten Year Capital Programme as set out in Appendix 3 of the report.

Reason:

1.    The Capital Programme establishes the budget framework and financial approvals for a wide variety of Council projects directed by the Corporate plan. The projects improve residents’ lives by building homes and schools, improving streets and infrastructure, and creating modern workspaces for local businesses.

2.    Over the coming ten years the proposed investment includes £852m for Meridian Water with construction work now underway on one site and construction to taking place across multiple sites from 2022/23; £1,100m for the Housing Revenue Account including delivering 3,500 new homes and investment in existing Council homes; £103m for Education and Schools which includes increasing our Special Educational Needs provision across the borough and £154m in respect of housing and renewable energy schemes though Council companies resulting in ongoing reduction in temporary accommodation costs to the Council’s revenue budget and extended the heat network supporting the climate change strategy. Details and expected outcomes of these investments are provided from paragraph 84 of the report.

3.    Additionally, it sets the 2022/23 to 2031/32 Capital Programme based on the 2022/23 Capital Strategy approved by Council on the 22nd September 2021, which required the capital programme to remain affordable by keeping within the self-imposed borrowing cap of £2bn.

4.    As at 31 March 2021 the underlying need to borrow, as measured by the Capital Financing Requirement (CFR) was forecast to reach £1.985bn by the end of 2030/31.

5.    This has been refreshed as part of the 2022/23 Treasury Management Strategy and the forecast position for the end of 2031/32 is £1,799m.The primary reason for the reduction is explained in paragraph 53 of the report.

6.    Council approved the use of five priorities in the Capital Strategy to ensure the capital programme remains within the debt cap whilst also considering the Council’s key strategic objectives. The programme is prioritised based on the following:

Priority 1 – Fully grant funded

Priority 2 – Statutory /Health and Safety

Priority 3 - Medium term Financial Savings

Priority 4 - Match funding

Priority 5 – Other priorities aligned to the Council’s strategic priorities.

7.    Longer term financial planning has become more important as the Council’s capital programme becomes larger and more complex. Reporting on a rolling ten year basis facilitates the Council’s understanding of the impact of the capital investment being made on the level of borrowing and revenue budgets reported as part of the 2022/23 to 2026/27 MTFP.

(Key decision – reference number 5353)