Agenda item

(Finance & Technology Portfolio Holder) To consider the attached report (C-57-2013/14).

(1)       That the latest five-year forecast of capital receipts be noted;

(2)        That the level of usable capital receipts, currently predicted to be £6.611million at 31 March 2018, be noted;

(3)        That the following amendments to the Capital Programme be approved or, where relevant, recommended to Council to approve:

            (a)        carry forwards totalling £888,000 from 2013/14 to 2014/15 in           respect of General Fund capital schemes as outlined in the report;

            (b)        a carry forward of £150,000 from 2013/14 to 2014/15 in respect of the        Open Market Shared Ownership initiative;

            (c)        re-phasing of the Disabled Facility Grant budget by bringing forward            an allocation of £94,000 to 2013/14 from future years;

            (d)        virements within the Housing Revenue Account in respect of the     categories of work identified in the report;

            (e)        re-phasing of the Housebuilding Programme, Planned Maintenance            Programme and Off Street Parking initiative financed within the Housing Revenue Account as identified in the report.

The Portfolio Holder for Finance & Technology presented a report on the update of the Capital Programme for the period 2013/14 to 2017/18.

The Portfolio Holder reported that the Council’s Capital Programme included the forecast capital investment in Council owned assets; estimates of capital loans to be made for private housing initiatives; and projected levels of revenue expenditure funded from capital under statute. The Capital Programme had been prepared by updating the programme approved in February 2013 with new schemes and any subsequent allocations approved by Cabinet. Each scheme within the Capital Programme had been reviewed, with Spending Control Officers reassessing the estimated final costs and the phasing of expenditure profiles for each scheme as part of the review. Recommendations for amendments to the Programme had been made where appropriate.

The Portfolio Holder highlighted the Council’s overall programme of capital expenditure, which indicated a commitment to invest £83.564million on Council-owned assets over the five-year period under consideration. Details of individual schemes or groups of projects were listed in Appendix 2 of the report for the General Fund capital programme and at Appendix 3 for the Housing Revenue Account (HRA) Capital Programme. There was also a commitment to finance capital loans in the sum of £2.436million and planned expenditure of £1.971million which was now classified as revenue expenditure but which could be financed from capital resources.

The Portfolio Holder also stressed the funding available to finance these schemes over the five-year period. Estimated external funding from grants and private sources of £5.104million had been identified and it was proposed that capital receipts estimated to be £13.486million and revenue contributions estimated to be £69.381million be applied to finance the capital programme over the next five years. In conclusion, the balance of capital receipts was expected to fall from £13.9million at 1 April 2013 to £6.611million by 31 March 2018, and the Major Repairs Fund balance was expected to decrease from £9.755million to £3.652million by the end of the period.

In response to questions from the Members present, the Portfolio Holder clarified that £202,000 had been spent on Traffic and Parking Schemes during 2013/14, and a carry forward of £185,000 to 2014/15 was being recommended for the parking review in the Loughton Broadway, as this would not commence until after the Buckhurst Hill scheme had been completed. The Portfolio Holder for Safer, Greener & Transport reassured the Cabinet that the proposed scheme for the Loughton Broadway would be completed. The Portfolio Holder for Finance & Technology added that the Capital Programme would be further revised after the agenda items concerning the purchase of the leasehold interest in 2-8 Torrington Drive, Loughton and the release of the clawback covenant for the T11 site in Langston Road, Loughton had been considered following the exclusion of the public and press.

Decision:

(1)       That the latest five-year forecast of capital receipts be noted;

(2)        That the level of usable capital receipts, currently predicted to be £6.611million at 31 March 2018, be noted;

(3)        That the following amendments to the Capital Programme be approved or, where relevant, recommended to Council to approve:

            (a)        carry forwards totalling £888,000 from 2013/14 to 2014/15 in           respect of General Fund capital schemes as outlined in the report;

            (b)        a carry forward of £150,000 from 2013/14 to 2014/15 in respect of the        Open Market Shared Ownership initiative;

            (c)        re-phasing of the Disabled Facility Grant budget by bringing forward            an allocation of £94,000 to 2013/14 from future years;

            (d)        virements within the Housing Revenue Account in respect of the     categories of work identified in the report;

            (e)        re-phasing of the Housebuilding Programme, Planned Maintenance            Programme and Off Street Parking initiative financed within the Housing Revenue Account as identified in the report.

Reasons for Decision:

The capital programme was based on previously approved decisions or decisions to be considered later in the meeting. The expenditure profiles suggested were based on agreed timescales and practical considerations. The decisions proposed were intended to make the best use of the capital resources currently available and forecast to become available for capital schemes up to 2017/18.

Other Options Considered and Rejected:

To reconsider the inclusion of some new schemes or re-assess the inclusion of some existing schemes in order to reduce overall capital expenditure as the revenue consequence of reducing the level of capital receipts over the next five years would be to reduce investment income.

To reduce the Revenue Contribution to Capital Outlay contributions by increasing the use of usable capital receipts, beyond that which was currently required. However, the levels suggested in the report were affordable within the Housing Revenue Account (HRA), according to current predictions, and any further use of usable capital receipts for HRA purposes would have the effect of reducing the capital resources available for the General Fund.