Agenda item

Report attached.

The Cabinet considered a report of Councillor Peter Britcliffe, Deputy Leader of the Council and Portfolio Holder for Resources, which provided an update on the Council’s Capital Programme Monitoring.  Councillor Britcliffe outlined the purpose of the report, which set out the latest phasing of the programme including the latest estimate of available resources and any additions or changes in forecast outturn since the last current position was presented to the Cabinet on 18^th October 2023.

Approval of the report was not considered to be a key decision.

Reasons for Decision

The Council had authorised new additions to the capital programme of £8.374m at its meeting on the 23^rd February 2023.

Since the Council meeting in February 2023 new schemes totalling £1.530m had been approved and added to the programme.  The additional expenditure approved was to be fully funded by external grants and receipts that had been awarded and or / received.

In addition, the capital spend outturn from 2022/2023 had slipped £37.615m into 2023/2024, of which £35.294m related to the Levelling Up scheme for Accrington Town Centre, the Leisure Estate Investment and Housing Schemes including Disabled Facilities Grants.

The approved Capital programme now totalled £42.619m and was shown in the table below:

The financing of the programme in 2023/2024 was set out in the report in the form of a pie chart.  This showed that there was approval to fund £5m of the capital programme through external borrowing, if required.  The Council continued to maximise the use of its capital receipts, reserve balances and attempted to draw down additional external funding that would delay or potentially reduce its need for borrowing.

The current programme of £42.619m would not be capable of being delivered in the current financial year and it was proposed to now rephase the programme into the years in which it was now expected to be spent.  The phasing of the programme was now summarised as below.

3^rd Quarter Update Position

The actual expenditure to 31^st December 2023 was £3.621m against the latest rephased budget for 2023/2024 of £10.920m.  This equated to 33.16% spend. 

As shown in the table above, there was expected to be £31.70m of budget to be rephased into 2024/2025 of which £17.116m related to the Levelling Up scheme for Accrington Town Centre, £11.992m to the Leisure Estate Investment, £0.767m to Shared Prosperity Funded schemes, £0.660 to Disabled Facility Grants and the balance to miscellaneous capital schemes.

As the programme had been rephased, the latest forecasts were now that there would be a small underspend in year of £11,552 with all other schemes in line with the budgeted profile and expected to be spent in year.

The significant elements of the programme to be spent in year were shown in the table below with a more detailed breakdown shown in Appendix A of the report.

Close monitoring of the capital programme was undertaken throughout the year to ensure that the projects were kept in line with spend forecasts and were considered in the Council’s cash flow forecasts.  Deviations from the spending profiles and any financial implications were taken into account in treasury and revenue budget forecasts.

Financial Risks of the Capital Programme

The report included a commentary on areas of potential financial risk, a summary of which is set out below:

• Capital Receipts (medium level risk);
• External Grants and Contributions mainly comprising:

o       Levelling Up Project (LUF);

o       UK Shared Prosperity;

o       Disabled Facilities Grant;

o       Leisure Estate Investment Programme;

(medium level risk);

• External Borrowing (medium level risk);
• Major Schemes in Capital Programme including:

o       Levelling Up Programme;

o       Disabled Facilities Grant;

o       UK Shared Prosperity Grant;

o       Leisure Estate Investment Programme;

o       Asset Programme works, including maintenance of operational buildings and the continued investment in Parks and Playgrounds.

Conclusion

The capital programme had significantly grown over the past two financial years to a current programme totalling £42.619m.  Although the programme was approximately 62% funded from external grants and contributions, it nevertheless puts a strain on the Council’s staffing resources to be able to procure and deliver these projects.  It was, therefore, key to ensure that projects were well planned and phased to deliver within the required timeframes.

The Programme would continue to be carefully monitored and it might require further revisions in its phasing in the future.

There were no alternative options for consideration or reasons

Resolved                                 -      That Cabinet notes the progress on capital expenditure to date.