General Fund - Capital Programme 2022/23
Councillor Joyce Plummer, Portfolio Holder for Resources, provided a report requestingCabinet to consider the Council’s capital investment priorities for 2022/23 and recommending to the Council a Capital Programme for approval at its meeting on the 24th February 2022, having regard to key linkages between the management of the Council’s capital and revenue resources.
Councillor Plummer reported that the Capital Programme for 2022/23 was the largest ever with in excess of £38.5M projects planned (double the previous peak spending when delivering the housing schemes across west Accrington). Major schemes included some £24M on Accrington Town Centre under the Levelling-Up proposals and £12M on the Leisure Estate to make it fit for purpose and improve the health and wellbeing of residents at inviting venues. Other projects included:-
- A contribution to the extension of Accrington Stanley Community Trust’s indoor sports facility;
- £1.1M Disabled Facilities Grant (DFG) to allow vulnerable residents to maintain independent lives and reduce pressure on hospitals and social care services;
- A new play area at Knuzden Recreation Area;
- Leeds and Liverpool Canal towpath cycleway;
- Accrington cemetery improvements; and
- Other estates improvements.
The Leader of the Council commented that two years of the pandemic had taken its toll on residents and businesses and it would take time to recover. A Capital Programme of over £38M would help to drive forward recovery. Levelling-Up money would support the Town Centre Investment Plan and growth was also linked to the Huncoat Garden Village project. The Partnership would develop the Levelling-Up Fund bid and would take account of wider stakeholder involvement. Town Centre Investment would utilise £20M provided from external sources, with £4M available from Council Reserves. The project was centred on increasing footfall in Accrington, but would benefit the whole of the Borough. The project around Leisure represented the largest investment in this sector since 1974. Older facilities needed investment and some would be repurposed, not closed. The Programme also included replacement of the 3G pitch at Hyndburn Leisure Centre for which around £55k of funding had already been set aside.
Councillor Haworth thanked the Leader of the Council for the commitment to the project at Knuzden Recreation Area. Councillor Britcliffe asked if the Budget meeting would be held in the Council Chamber, as the acoustics in the Ballroom were not ideal. Jane Ellis, Executive Director – Legal and Democratic Services responded that Members had previously been consulted on their risk appetite around social distancing. There was a spectrum of responses with some councillors happy to return to less restrictions, but a number indicating that they were vulnerable. The emergence of the Omicron variant had meant a return to higher levels of risk control recently.
Councillor Plummer thanked Joe McIntyre, Deputy Chief Executive, and his staff for their hard work in producing all of the budget papers. Councillor Paul Cox, Deputy Leader of the Council, commented that this was a fantastic Capital Programme. He was particularly impressed with the commitment towards sports and leisure, which was so important. Parks and open spaces had been a big outlet for people during the pandemic and Hyndburn had numerous Green Flag Awards for its parks. The Council had invested all across the Borough in its green spaces. Councillor Munsif Dad BEM JP mentioned the importance of the DFG monies. Many residents had benefited from this grant, which improved their quality of life. The Leader added that sources of other funding for projects such as at Memorial Park and Mercer Hall would continue to be pursued.
Approval of the report was not a key decision.
Reason for decision
The report set out the Council’s Capital Programme for 2022/23. In the past 20 years, the Council had funded significant programmes of Capital Expenditure which sometimes exceeded £15m per annum. After a number of years in which due to austerity the Council had vastly reduced its Capital Programme, it was now returning this year to a major funding programme of capital investment centred around its leisure estate and redevelopment of Accrington Town Centre with a total of proposals for capital investment in excess of £38.5m.
The significant level of investment proposed to start this year had only been made possible by the Council obtaining financial support from external organisations and its own effective financial management over recent years which had allowed it to have the funds necessary to finance these major projects when other funding became available.
It was intended that the Council would continue these strong policies of financial management and look only to borrow what it needed to fund these 2 major investment projects. The Council would continue to rely upon 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 the Council’s policy of limiting the increase in debt and borrowing costs, while ensuring the Council’s objectives were met.
The Revenue implications of the strategy to finance the Capital Programme were 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 was up compared to previous years due to the size of programme compared to previous years. However to further reduce the risk the Council would be looking to supplement 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 adopted for over 10 years of attempting 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.
In summary, the Council would be investing £38.5m in Capital investment in 2022/23. There was a significant amount of the total resource available this year dedicated to major improvements to Accrington Town Centre and the Leisure Estate, along with supporting people with disabilities to continue to live in their own homes and investment in key assets and infrastructure.
The details behind all of these proposals remained at the outline stage only and further work was required to ensure that these projects provided positive benefits to the community and the Council. Each project was 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 did 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 were not financially viable or encountered other problems such as securing external funding. The Capital Programme Working Group (CPWG) would report back to Cabinet at frequent intervals throughout the year to ensure Cabinet was kept apprised of the current situation and that any approvals necessary for alteration were obtained.
The report also included additional details and a section on improving the management of capital investments.
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 recommends to Council:-
(1) To approve a Capital Programme for 2022/23 of £38,593,918 as set out in Appendix 1.
(2) That the programme is funded by new anticipated direct external grants of £23,428,958 and £15,164,960 of new investment from the Council’s resources, the redesignation of reserves to support the capital programme and the use of borrowing. 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. Where the Deputy Chief Executive deems it appropriate, he has the authority to release funding in stages to ensure effective financial control can be maintained and project risk managed.
(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 2022 whenever this is practical.
(6) That in-year underspends are not made available to fund new projects during the year.