Agenda item

Report attached.

The Cabinet considered a 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, regarding the proposed capital programme for 2025/26 – 2027/28.

Councillor Alexander gave a short verbal introduction to the report.

Approval of the report was not deemed a key decision.

Reasons for Decision

The report set out the Council’s Capital Programme for 2025/26, including forecast slippage on schemes from 2024/25 and the additions of new schemes to the Council’s Capital Programme for 2025/26.

The significant level of investment in previous years had only been possible by the Council obtaining external financial support, as well as the Council’s own effective financial management over recent years which had allowed it to have the funds necessary to finance these major projects when other funding had become available.

The new additions to the capital programme for 2024/25 had reduced to £2.476m, compared to £4.404m in 2024/25.  External funding of £1.538m had been confirmed towards the cost of these new capital schemes (Disabled Facilities Grant and UK Shared Prosperity Funding) with a further £0.052m funding to be secured.

The additions to the programme in 2025/26 would bring the total approved capital programme to £26.054m, including forecast slippage of the unspent programme from 2024/25 of £23.578m, which could be seen in Appendix 1 of the report.  The forecast slippage from the 2024/25 programme included £4.555m for the Leisure Estate Investment Programme and £16.789m for the Levelling Up Programme.  The capital budgets for the Levelling Up Programme were based on the latest forecast of costs however as these were not tendered figures, they were still subject to change and should there be any changes to the current forecast, these would be reported during the year.

It was important to note that the funding of the 2025/26 capital programme was based on the realisation of additional capital receipts during the year.  The programme assumed £3.092m of expenditure would be funded from capital receipts, of which £0.595m related to the King George V Pavilion and pitches scheme which was contingent on funding from the disposal of land.  £1.147m in available receipts was forecast to be brought forward at the beginning of the year, leaving a target of £1.350m of new receipts which were required, which if not realised would need to be replaced by funding from earmarked reserves.

The capital programme currently excluded the proposed Huncoat Garden Village scheme which would be wholly funded from the Home England Brownfield Infrastructure and Land Fund grant of £29.898m.  When the funding agreement was approved, the capital and revenue costs of the scheme and associated funding would be submitted for inclusion in the Council’s revenue and capital budgets.

The expected new schemes for 2026/27 and 2027/28 (totalling £2.4m) were detailed in Appendix 3 of the report.  This was for information only as funding would need to be identified for these schemes before they were put forward for approval into the programme in future years.

The Council intended to continue its strong policies of financial management and look only to borrow what it needed to fund these major investment projects.  The Council would continue to rely on securing external sources of funding, using capital receipts, making revenue contributions to capital projects and would use unspent monies to fund its programme.  It would also apply a rigorous approach to selecting projects by examining all proposals against its corporate objectives and only selecting the most pressing and deserving projects to fund.  This was in accordance with Council policy.

The Revenue implications to finance the Capital Programme continued to be a key element in the affordability issues on the Revenue Budget this year.  The programme contained a limited amount of risk this year.  The level of risk remained increased compared to previous years due to the size of programme.  However, to further reduce the risk the Council had supplemented its own project management and cost control capacity by the appointment of experienced professionals in both disciplines for its two largest projects.  The Council’s overall resources and management systems were believed to be sufficiently robust to effectively monitor these risks and ensure appropriate action was taken if they should materialise.

The Council would continue with its strategy to reduce its level of debt wherever possible by restricting borrowing and repaying debt and would continue to work extensively with external funders to bring forward realistic plans for Capital investment in the area.

These schemes represented the best value for money and met the Council’s overall Corporate Policy objectives, within the funding envelope for the year.

A detailed report on the Capital Programme was provided as an Appendix to the covering report, which set out information on the following:

• Summary of the major additions to the Capital Programme;
• Improving the management of Capital Investments;
• Conclusion;
• Appendix 1 - Capital Programme 2025/26 (Summary);
• Appendix 2 - Capital Programme 2025/26 (Detailed); and
• Appendix 3 - Capital Programme 2025/26 (New Additions).

Alternative Options considered and Reasons for Rejection

A wider programme of funding had not been considered due to the Council’s policy commitment to limiting Capital Expenditure to affordable levels and seeking to repay debt.

Resolved                                    -    That Cabinet proposes to Council:

(1)    To approve the Capital Programme for 2025/26 including new scheme additions of £2,476,406 with a net cost to the Council of £886,000, as set out in Appendix 3 of the report.

(2)    To approve the funding of the programme by the use of newly anticipated direct external grants totalling £1,590,206 with the remaining funding of £886,000 to come from the Council’s resources.

(3)    To note the expected new scheme additions for 2026/27 and 2027/28.

(4)    That delegated authority is given to the Executive Director (Resources), in consultation with the Portfolio Holder for Resources to flex the programme in accordance with the available funding, provided this does not require any additional borrowing.

(5)    That the individual projects with the Capital Programme require the written authorisation of the Executive Director (Resources) following consultation with the Portfolio Holder for Resources and Council Operations before commencing and incurring expenditure and that Service Managers provide the Executive Director of Resources, with written details of estimated costs of schemes with full justification of the need and benefits from undertaking the capital investments before approval is provided and that approval to commence is delegated to the Executive Director (Resources), in consultation with the Portfolio Holder for Resources. That where he deems it appropriate, the Executive Director (Resources) be given authority to release funding in stages to ensure effective financial control can be maintained and project risk managed.

(6)    That in-year underspends are not made available to fund new projects during the year.