Agenda item

Report attached.

The Cabinet considered a report of Councillor Vanessa Alexander, Portfolio Holder for Resources and Council Operations, which provided an updated overview of the Council’s Capital Programme Monitoring position at Q1.  It outlined the latest phasing of the programme, including revised estimates of available resources, and highlighted any additions or changes to the forecast outturn since the previous monitoring report presented to Council on 27^th February 2025.

 

In the absence of Councillor Alexander, the Leader of the Council provided a brief introduction to the report.

 

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

 

Reasons for Decision

 

2025/26 Capital Programme

 

At the Council meeting on the 27^th February 2025, Members had approved a capital budget for 2025/26 of £2.726m.  A further £23.236m had been added to this budget from rephased capital projects carried forward from 2024/25.  Of these rephased budgets, £19.370m related to major projects, such as the Levelling Up funded schemes for Accrington town centre and the leisure estate investment programme.

 

Member approval had also been received to add a further £29.270m to the capital programme, of which £29.187m was for the scheme at Huncoat Garden Village (HGV), which was fully funded from external grants and capital receipts.

 

At its meeting on 27^th February 2025, the Council had approved an increase of £0.250m to the Climate Change reserve to fund decarbonisation initiatives.  Subsequently, a decarbonisation scheme had been identified as part of the Levelling Up Fund (LUF) project at the Market Hall, which included the installation of photovoltaic panels on the building’s roof with a cost of £0.500m.  Although funding had been allocated, the scheme had not yet received formal approval for inclusion in the Capital Programme and, therefore, the report sought that endorsement.

 

Several projects had been identified to be rephased into future years, which total £21.212m, of which, HGV was £20.980m.

 

The proposed Capital Budget for 2025/26 now totalled £34.353m, as shown in the table below:

 

Capital Programme 2025/26

 

	£m
Capital Budget (Approved at February Council 2025)	2.726
Budget Changes
Slippage from 2024/25	23.236
Budgets removed from the programme	-0.178
New Schemes in year – Huncoat Garden Village	29.187
New Schemes in year - Other	0.094
New Schemes requested in this report – decarbonisation works	0.500
Current Approved Capital Programme Budget 2025/26	55.565
Less Slippage to 2026/27	-21.212
Current Working Capital Programme Budget 2025/26	34.353

 

 

The financing of the programme in 2025/26 was set out in a pie chart within the report.

 

The current programme of £55.565m and the rephasing of the programme into future years was as shown below:

 

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

 

Programme Area	2025/26   £000	2026/27   £000	2027/28   £000	Total   £000
Operational Buildings	1,128	234	-	1,362
Parks and Open Spaces	1,131	-	-	1,131
IT Projects	497	-	-	497
Recreation and Sport	-	-	-	-
Vehicles and Equipment	669	-	-	669
Community Projects	608	-	-	608
Planned Asset Improvement Programme	217	-	-	217
Leisure Estate Investment Programme	6,793	-	-	6,793
Levelling Up Fund Schemes	13,077	-	-	13,077
UK Shared Prosperity Fund	255	-	-	255
Huncoat Garden Village	8,209	17,163	3,815	29,187
Housing Improvement Programme	1,769	-	-	1,769
Total Approved Capital Spend Budgets	34,353	17,397	3,815	55,565

 

 

1st Quarter Update Position

 

The actual and committed expenditure to 30^th June 2025 was £4.412m, against the latest rephased budget for 2025/26 of £34.353m.  This equated to 12.84% spend.

 

As shown in the table above, £17.397m of budget had been rephased into 2026/27, and £3.815m into 2027/28, to reflect forecast expenditure in future years.

 

The rephased capital budget for 2025/26 was shown in the table below with a more detailed breakdown shown in Appendix 1 of the report.  A summary of the new additions approved at Council in February 2025, together with new schemes approved in year and proposed known slippage to 2026/27 and 2027/28 were shown in Appendix 2 to the report.

 

Rephased Capital Budget for 2025/26

 

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	1,128	(4)	1,132	1,128	-
Parks and Open Spaces	1,131	131	1,000	1,131	-
IT Projects	497	78	419	497	-
Recreation and Sport	-	-	-	-	-
Vehicles and Equipment	669	232	437	669	-
Community Projects	608	395	213	608	-
Planned Asset Improvement Programme	217	3	214	217	-
Leisure Estate Investment Programme	6,793	1,600	5,193	6,793	-
Levelling Up Fund Schemes	13,077	1,054	12,023	13,077	-
UK Shared Prosperity Fund	255	174	81	255	-
Huncoat Garden Village	8,209	141	8,068	8,209	-
Housing Improvement Programme	1,769	608	1,161	1,769	-
Total	34,353	4,412	29,941	34,353	-
% of Budget Spend		12.84%	87.16%	100.00%	0.00%

 

 

The capital programme would be subject to close monitoring throughout the financial year to ensure that project expenditure remained aligned with approved forecasts and was accurately reflected in the Council’s cash flow projections.  Any deviations from planned spending profiles, along with their financial implications, would be assessed and incorporated into future treasury management and revenue budget forecasts as appropriate.

 

Financial Risks of the Capital Programme

 

Capital Receipts

 

The financing of the Capital Programme was dependent on securing £2.082m in capital receipts from the sale of Council-owned land and buildings.  To date, £1m had been generated, leaving a balance of £1.082m to be achieved.  However, due to £0.234m of capital expenditure being reprofiled into 2026/27, the revised target for 2025/26 was £0.842m.

 

Progress was being made on the disposal of the assets identified to generate these receipts.  Should any of these sales be delayed, the Council might need to either pause elements of the Capital Programme or temporarily use alternative reserves to maintain delivery.  It was therefore essential that the planned disposals were prioritised to ensure the necessary funding was secured.

 

Officers would continue to review the Council’s operational asset base to identify further opportunities for capital receipts and would regularly assess the risks associated with this funding strategy.

 

(This was a medium-level risk).

 

External Grants and Contributions

 

The Capital Programme was reliant on £44.611m in external funding.  It was therefore crucial that the external funding was secured, and grant income for eligible works was claimed on a frequent basis.  To date £9.601m had been received, leaving £35.009m still to be received / claimed over the next three years

 

Most of the external funding was allocated to the projects summarised below, which were described in more detail in the report:

 

• Levelling Up Project (LUF);
• Huncoat Garden Village;
• Disabled Facilities Grant; and
• Leisure Estate Investment Programme.

 

(This was a medium-level risk).

 

Major Schemes in Capital Programme

 

The Capital Programme included several major schemes that required close and ongoing monitoring to ensure they remained on schedule, within budget, and that any external funding was both secured and claimed in a timely manner.  Key projects currently identified as major schemes included:

 

• Levelling Up Programme - with £13.077m in year.  This figure included additional Council works incorporated into the Levelling Up programme.
• Disabled Facilities Grant - with £1.769m in year.
• UK Shared Prosperity Grant – with £0.255m in year.
• Leisure Estate Investment Programme – Forecast £6.796m in year.
• Huncoat Garden Village – with £8.208m in year and £17.163m in 2026/27
• Asset Planned Programme works £0.217m in year.  These works included maintenance of operational buildings and the continued investment in Parks and Playgrounds

 

Levelling Up Programme - Additional Enhancements Identified

 

Additional enhancements had been identified that extended beyond the original scope of the Levelling Up Fund (LUF) bid submitted in 2022.  At present, no additional funding had been secured to support these works.  The initial estimated cost of these enhancements was approximately £1.85m at current prices, based on the assumption that they would be delivered as part of the existing project plan.  Of this total, £0.500m had been allocated for the installation of solar photovoltaic panels on the roof of the Market Hall, which was included in this report as a recommended addition to the 2025/26 Capital Programme.

 

The remaining enhancements, which members might also wish to consider for inclusion were –

 

• £0.600m - Market Chambers External Works – these works would be required to be completed before a future Delivery Stage National Heritage Lottery Bid for submission in May 2026.
• £0.300m - Burton Chambers Roof Works – this was the additional cost of fully replacing the roof as opposed to the minor repairs included in the original specification.
• £0.340m - Market Hall – additional layout alteration requests.
• £0.110m - additional fees and risk allowances on the above elements.

 

£1.35m Total

 

The tender bids for Phase 2 fit-out works on the LUF projects were currently under evaluation.  A successful bidder was expected to be appointed by late August.  Once the evaluation was complete and the bid costs were compared to the available budget, the Council would be able to confirm whether any funds remained for additional enhancements.  If no surplus was available, further capital funding would need to be identified to support any enhancements that members might wish to include in the capital programme.

 

Conclusion

 

The Capital Programme had expanded significantly over the past two financial years and now totalled £55.565m.  Although approximately 69% of the programme was funded through external grants and contributions, the scale and complexity of the programme placed considerable pressure on the Council’s staffing resources to effectively procure and deliver projects.  It was therefore essential that all projects were carefully planned and appropriately phased to ensure delivery within required timescales and to maximise the use of available resources.

 

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                                  (1)   That Cabinet notes the financial position of the capital programme at Q1 2025/26.

 

(2)   That the capital budget for 2025/26 is increased by £500k to support decarbonisation initiatives.  The additional budget will enable the installation of photovoltaic cells to the roof of the Market Hall.

 

With the consent of the meeting, Agenda Item 12 was taken next.