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 October 2024.

 

Councillor Aziz provided a brief introduction to the report.  As mentioned previously, there had been some slippage around Levelling Up Fund (LUF) projects and Wilson Sports Village, which would roll over into next year.  However, this had produced a positive effect on the Council’s revenue position.  The Government had agreed to an extension to the timelines in respect of the LUF interventions.  The Wilson project had been subject to a short delay, due to the previous contractor, ISG, entering into administration.  It was reported that, in view of the additional grant of £240k provided by Sport England, there would be no additional funding required from the Council to complete the project.

 

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 £1.443m 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 £44.866m and was as shown in the table below:

 

Current 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		-1.637
New Schemes and Additional Funding approved in year			1.443
Current Approved Capital Programme Budget 2024/25			44.866
Less Slippage to 2025/26	-21.244
Current Working Capital Programme Budget 2024/25			23.622

 

 

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

 

The current programme of £44.866m 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.

 

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	313	651	144	1,108
Parks and Open Spaces	637	830	-	1,467
IT Projects	212	55	-	267
Recreation and Sport	-	-	-	-
Vehicles and Equipment	101	666	-	767
Community Projects	498	31	-	529
Planned Asset Improvement Programme	210	-	-	210
Leisure Estate Investment Programme	7,310	4,555	-	11,865
Public Sector Decarbonisation Scheme	-	-	-	-
Levelling Up Fund	12,012	14,312	-	26,324
UK Shared Prosperity Fund	388	-	-	388
Transitional Housing Programme	-	-	-	-
Housing Improvement Programme	1,941	-	-	1,941
Total Approved Capital Spend Budgets	23,622	21,100	144	44,866

 

 

3rd Quarter Update Position

 

The Actual expenditure and commitments to 31^st December 2024 was £10.901m against the latest rephased budget for 2024/2025 of £23.622m.  This equated to 46.15% spend.

 

As shown in the table above, there was expected to be £21.244m of budget to be rephased into 2025/26 and 2026/27, 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 and Commitments to Date       £000	Forecast Spend for Remainder of Year     £000	Forecast Outturn Position for the Year   £000	Variance (Under) / Overspend       £000
Operational Buildings	313	219	102	321	8
Parks and Open Spaces	637	470	167	637	-
IT Projects	212	104	113	217	5
Recreation and Sport	-	-	-	-	-
Vehicles and Equipment	101	31	70	101	-
Community Projects	498	45	452	497	(1)
Planned Asset Improvement Programme	210	40	170	210	-
Leisure Estate Investment Programme	7,310	3,362	3,948	7,310	-
Public Sector Decarbonisation Scheme	-	(3)	3	-	-
Levelling Up Fund	12,012	4,926	7,086	12,012	-
UK Shared Prosperity Fund	388	115	274	389	1
Transitional Housing Programme	-	-	-	-	-
Housing Improvement Programme	1,941	1,592	349	1,941	-
Total	23,622	10,901	12,734	23,635	13
% of Budget Spend		46.15%	53.91%	100.06%	0.06%

 

 

Quarter 3 monitoring figures for revenue reflected contributions towards the forecast overspends shown in the table above.

 

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 is reliant on using receipts of £5.004m, which had 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 £2.945m to achieve all its required financing from capital receipts.  Due to slippage in the programme this funding was not required in 2024/25, but would still be required in future years.  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 continued 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 £28.301m 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 £9.911m had been received, leaving £18.390m 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 contains 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 £12.012m in year and £14.312m in 2025/26, these figures included additional Council works incorporated into the Levelling Up programme;

·         Disabled Facilities Grant - with £1.941m in year;

·         UK Shared Prosperity Grant – with £0.388m in year;

·         Leisure Estate Investment Programme – Forecast £7.310m in year & £4.555m in 2025/26.  The profile of these works had been updated following the recommencement of works on the Wilson playing field site following the recent appointment of a new main contractor; and

·         Asset Programme works £1.568m in year, £1.512m in 2025/26 and £0.144m in 2026/27.  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 £44.866m.  Although the programme was approximately 66% 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.