Agenda item

Report attached.

Members considered a joint report of Councillor Noordad Aziz, Deputy Leader and Portfolio Holder for Transformation, Education and Skills, and Councillor Vanessa Alexander, Portfolio Holder for Resources and Council Operations, which provided an update for Cabinet on the Council’s Capital Programme Monitoring.  It 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 monitoring position had been presented to the Cabinet on 30^th July 2024.

 

Councillor Alexander provided a brief introduction to the report.

 

Councillor Khan noted that capital receipts needed to be realised to fund the Capital Programme, in part, and asked if it was known which land or buildings would be proposed for sale.  Councillor Alexander responded that these had not yet been identified, but vacant buildings would be considered for reuse or sale.  However, the Theatres Trust and local community group were keen to bring Oswaldtwistle Theatre back into use as an entertainment venue.

 

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 £4.404m at its meeting on the 27^th February 2024.

 

Since the Council meeting in February 2024 new schemes totalling £0.531m had been approved and added to the programme.  The additional expenditure approved was to be fully funded from by external grants and receipts that had been awarded and or / received.

 

In addition, the capital spend outturn from 2023/2024 had slipped £40.656m into 2024/2025, of which £37.769m related to the Levelling Up scheme for Accrington Town Centre, the Leisure Estate Investment and Housing Schemes including Disabled Facilities Grants.

 

The total approved Capital Programme now totalled £44.144m and was shown in the table below:

 

Approved Capital Programme

 

	£m
New Additions to the Capital Programme (Reported at February Council 2024)	4.404
Budget Changes
Slippage from 2023/24	40.656
Budgets removed from the programme	-1.558
New Schemes and Additional Funding approved in year	0.652
Current Approved Capital Programme Budget 2024/25	44.144

 

 

The financing of the programme in 2024/2025 was set out in a pie chart within the report.

 

The current programme of £44.144m 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 as summarised below.

 

Summary of the Scheme Profiles over the Medium-Term Financial Strategy

 

Programme Area	2024/25   £000	2025/26   £000	2026/27   £000	Total   £000
Operational Buildings	788	291	-	1,079
Parks and Open Spaces	669	830	-	1,499
IT Projects	234	-	-	234
Recreation and Sport	-	-	-	-
Vehicles and Equipment	101	666	-	767
Community Projects	78	-	-	78
Planned Asset Improvement Programme	210	-	-	210
Leisure Estate Investment Programme	10,625	1,000	-	11,625
Public Sector Decarbonisation Scheme	-	-	-	-
Levelling Up Fund	19,386	6,937	-	26,323
UK Shared Prosperity Fund	388	-	-	388
Transitional Housing Programme	-	-	-	-
Housing Improvement Programme	1,941	-	-	1,941
Total	34,420	9,724	-	44,144

 

 

2nd Quarter Update Position

 

The Actual expenditure to 30^th September 2024 was £8.589m against the latest rephased budget for 2024/2025 of £34.420m.  This equated to 24.95% spend.

 

As shown in the table above, there was expected to be £9.724m of budget to be rephased into 2025/2026, in respect of capital schemes which would now not be completed during the current year.

 

As the programme had been rephased, the latest forecasts remained in line with the budgeted profile and were 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 provided in the report as Appendix 1.

 

Significant in-Year Spend

 

Programme Area	Total Budget         £000	Spend to Date         £000	Forecast Spend for Remainder of Year     £000	Forecast Outturn Position for the Year   £000	Variance (Under) / Overspend       £000
Operational Buildings	788	29	759	788
Parks and Open Spaces	669	363	306	669
IT Projects	234	101	139	240	6
Recreation and Sport	-	-	-	-
Vehicles and Equipment	101	31	70	101
Community Projects	78	40	38	78
Planned Asset Improvement Programme	210	32	178	210
Leisure Estate Investment Programme	10,625	3,292	7,333	10,625
Public Sector Decarbonisation Scheme	-	(3)	3	-
Levelling Up Fund	19,386	3,683	15,703	19,386
UK Shared Prosperity Fund	388	104	284	388
Transitional Housing Programme	-	-	-	-
Housing Improvement Programme	1,941	917	1,024	1,941
Total	34,420	8,589	25,837	34,426	6
% of Budget Spend		24.95%	75.06%	100.02%	0.02%

 

 

Close monitoring of the capital programme would be 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 would be considered in future treasury and revenue budget forecasts.

 

Financial Risks of the Capital Programme

 

Capital Receipts

 

The financing of the programme was reliant on using receipts of £4.688m, having been generated from the sale of Council land and buildings.  To date the Council still needed to sell land and buildings to the value of £1.555m to achieve all its required financing from capital receipts.  It was now not expected that all these receipts would be achieved by the end of 2024/2025.  Work would be progressing on the sale of the assets identified in these receipts.  If some of these asset sales were delayed, the Council had sufficient reserves in place to fund the existing programme in the short term.  It was crucial that the planned sales continue to be progressed to ensure the Council achieved the required receipts that would enable future capital programme works to be undertaken.

 

This was a medium level risk.

 

External Grants and Contributions

 

The Capital Programme was reliant on £27.598m in external funding, with the Council providing additional match funding.  It was crucial that the external funding was secured, and grant works were claimed on a frequent basis.  To date £8.440m had been received, leaving £19.158m still to be received / claimed over the next two years.

 

The majority of external funding was to be provided by the following sources (further details of which were included in the report):

 

• Levelling Up Project (LUF);
• UK Shared Prosperity;
• Disabled Facilities Grant; and
• Leisure Estate Investment Programme

 

This was a medium level risk.

 

Major Schemes in Capital Programme

 

The programme contained some major schemes that required close monitoring to ensure they were on target and that any external financing had been secured and was being claimed frequently.  Major schemes included:

 

• Levelling Up Programme - with £19.386m in year and £6.937m in 2025/26
• Disabled Facilities Grant - with £1.941m in year
• UK Shared Prosperity Grant – with £0.388m in year
• Leisure Estate Investment Programme – Originally forecast £10.625m in year & £1m in 2025/26.  The profile of these works would be updated when further information was known regarding the recommencement of works on the Wilson playing field site following the recent administration of the main contractor.
• Asset Programme works £2.080m in year and £1.787m in 2025/26.  These works included 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 £44.144m.  Although the programme was approximately 63% funded from external grants and contributions, it nevertheless put 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 time limits.

 

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 the Cabinet notes the progress on capital expenditure to date