Capital Programme 2020/21
Councillor Joyce Plummer, Portfolio Holder for Resources, provided a report inviting the Cabinet to consider the Council’s capital investment priorities for 2020/21 and recommending to the Council a Capital Programme for approval at its meeting on the 27th February 2020, having regard to key linkages between the management of the Council’s capital and revenue resources.
Councillor Plummer highlighted some key messages from the report as follows:
- Some £3.1M of capital; investment was planned in the local economy in 2020/21;
- Specific schemes included £1.25M of investment in the Market Hall including interior refurbishment and leisure usage and removal of the outdoor pavilions to create car parking and additional public space, with a view to increasing footfall;
- Support to people to continue living in their own homes through use of £1M Disabled Facilities Grant, which would help to alleviate pressure across other public services including the NHS and adult social care
- Other improvements to the Council’s sports facilities, Willows Lane Depot and ICT; and
- Capital funding would be available from both internal and external sources.
The Report sets out the Council’s Capital Programme for 2020/21. In the past 20 years, the Council has funded significant programmes of Capital Expenditure which sometimes exceeded £15m per annum. In these more austere times it is not possible to fund investment into the local community at these levels. However the Council is able to put forward a substantial capital investment programme of over £3.1m, despite the severe reductions in public spending that have been necessary due to the Recession. This has only been made possible by the Council’s effective financial management over recent years, which has seen it avoid additional borrowing and increase its revenue reserves, while reducing its operating costs.
It is intended that the Council will continue these strong policies of financial management and this year will again avoid increasing its borrowing. It will rely on securing external sources of funding, using capital receipts, making revenue contributions to capital projects and will use unspent monies to fund its programme. It will 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 is in accordance with the Council policy of limiting the increase in debt and borrowing costs, while ensuring the Council’s objectives are met.
The Revenue implications of the strategy to finance the Capital Programme are a key element in the affordability issues on the Revenue Budget this year. The programme contains a limited amount of risk this year. The level of risk is significantly down from previous financial years. This is largely due to the smaller programme and the removal of much of the risk around the level of available capital funds to meet the proposed expenditure. The Council’s overall resources and management systems are believed to be sufficiently robust to effectively monitor these risks and ensure appropriate action is taken if they should materialise.
The Council will continue with its strategy adopted for over 10 years of attempting to reduce its level of debt wherever possible by restricting borrowing and repaying debt and will continue to work extensively with external funders to bring forward realistic plans for Capital investment in the area.
Overall the Council will be investing £3.1m in Capital investment in 2020/21. There is a significant amount of the total resource available this year dedicated to supporting people with disabilities to continue to live in their own homes, along with continued investment in Accrington Town Centre and the Council’s key buildings and infrastructure that it needs to deliver services to the public.
The details behind all of these proposals remain at the outline stage only and further work is required to ensure that these projects provide positive benefits to the Community and the Council. Each project is therefore required to submit further detailed plans if required in order to obtain final approval for expenditure to occur and to obtain final clearance from the Deputy Chief Executive, in consultation with the Portfolio Holder for Resources.
The Capital Programme does require a degree of flexibility within it, to respond to sudden demands for Capital expenditure, actions to be taken on the receipts of monies and revisions to proposals as projects are not financially viable or encounter other problems such as securing external funding. The Capital Programme Working Group (CPWG) will report back to Cabinet at frequent intervals throughout the year to ensure Cabinet is kept apprised of the current situation and any approvals necessary for alteration are obtained.
Councillor Plummer reminded Members that the various Budget papers would also be considered by the Resources Overview and Scrutiny Committee on 18th February 2020, prior to submission to Council on 27th February 2020.
The Leader of the Councillor remarked that a High Street Task Group would be established to look at future major investment into Accrington Town Centre. The Council had recently secured access to Government professionals. A broad based Panel, to include cross-party membership and representatives of local businesses, would lead the development of the future vision for the Town Centre.
Approval of the report was not a key decision.
Reason for Decision
These schemes represent the best value for money and meet the Council’s overall corporate policy objectives, within the funding envelop for the year.
Alternative Options considered and Reasons for Rejection
A wider programme of funding has not been considered due to the Council’s policy commitment to limiting Capital Expenditure to affordable levels and seeking to repay debt.
Resolved - That the Cabinet agrees to recommend the Council:
(1) To approve a Capital Programme for 2020/21 of £3,107,775 as set out in Appendix 1.
(2) That the programme is funded by new anticipated direct external grants of £976,000 and £2,131,775 of new investment from the Council’s resources. External grant funding must be secured before any internal funds are committed to projects that rely on external funding to proceed.
(3) That delegated authority is given to the Deputy Chief Executive, 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.
(4) That the individual projects within the Capital Programme require the written authorisation of the Deputy Chief Executive following consultation with the Portfolio Holder for Resources before commencing and incurring expenditure and that Service Managers provide the Deputy Chief Executive, 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 Deputy Chief Executive, in consultation with the Portfolio Holder for Resources.
(5) That Projects are timed to minimise the need for borrowing and the Deputy Chief Executive be requested to seek project start dates after September 2020 whenever this is practical.
(6) That in-year underspends are not made available to fund new projects during the year.