Agenda item

(Director of Resources) To consider the attached report.

The Assistant Director Accountancy, Mr Maddock introduced the report on the Council’s capital programme for 2014/15 in terms of expenditure and financing and compared the provisional outturn figures with the revised estimates. The revised estimates, which were based on the Capital Programme, represent those adopted by the Council in February 2015.

It was noted that the Council’s total investment on capital schemes in 2014/15 was £20,114,000, compared to a revised estimate of £24,092,000. The largest underspends were experienced on General Fund projects. In particular, there was an underspend of £1,000,000 on the St John’s Road Development scheme as the land purchase and asset negotiations planned to enable the proposed development of this site, had not taken place yet. As a consequence the full £1,000,000 set aside for this scheme was requested for carry forward to 2015/16. In addition, there was another large underspend of £448,000 on the Museum redevelopment scheme, for which Heritage Lottery funding has been secured. A carry forward of £448,000 to 2015/16 was requested.

Within the Resources Directorate, there was also a significant underspend of £557,000 on the planned maintenance programme. The largest underspends relate to the installation of the new windows in the main building and the solar panels.

Expenditure on the Information and Communication Technology (ICT) Programme was £424,000 last year compared to a revised budget of £533,000. The £109,000 underspend relates primarily to the installation of the new disaster recovery system and replacement of the host servers.

The two largest underspends within the Neighbourhoods Directorate relate to work on the Councils parking schemes and the upgrade of the pay and display machines in car parks.

The capital allocation for waste management equipment was set aside primarily for new refuse and recycling bins. However, the Council was now operating a stock account for bins through new arrangements with Biffa.

With regard to capital expenditure on the Council’s HRA assets, a total of £13,851,000 was invested compared to a revised estimate of £15,219,000; this represents a 9% underspend. In comparison with 2013/14, however, expenditure was up by 30%.

It was noted that the largest underspend in 2014/15 was on the kitchen and bathroom replacement programmes. The vast majority of the £501,000 underspend occurred because a quarter of kitchen replacements planned for 2014/15 had to be placed on hold pending clearance of tenant arrears and other matters.

The second largest underspend was experienced on the new house building and conversions program. Work is now well underway on all four sites of Phase 1 of the house building programme.

The Chairman noted that as a general point everything had been carried forward.

Councillor Angold-Stephens had a query about waste vehicles, noting that 8 extra vehicles had to be bought (by Biffa?). He was told that we had sold our fleet of vehicles to Biffa and recently they had to hire in some extra vehicles to cover the shortfall.

The Chairman said that he would like to look at private funding arrangements, but this may have to be done in private session. The Committee agreed that they would like this added to their work programme.

Councillor Watson noted the slippage and commented that we may never catch up when we carry things forward.  Councillor Stavrou disagreed as the causes were different each time, which tended to be one off items and instances. Councillor Mohindra added that in the past they tended to look at items on the DDF budget that stayed on for more than 3 years.  Councillor Watson said this was more a question of principle and not based on any individual item and she did not want to lose sight of this. Councillor Stavrou noted that historically no one had focused attention on this. However, over the last few years the finance scrutiny panel had looked at it and it had now been tightened up. Cabinet was mindful of what scrutiny had to say.

Mr Maddock noted that coming into force was the new rule that social rents had to be reduced by 1% which would bounce back on our finances over the next four years and cost us a lot of money; which would mean that we will have to look very carefully at the HA capital programme.

RESOLVED:

(1)          That the provisional outturn report for 2014/15 be noted;

(2)          That retrospective approval for the over and underspends in 2014/15 on certain capital schemes as identified in the report be recommended to the Cabinet;

(3)          That approval for the carry forward of unspent capital estimates into 2015/16 relating to schemes on which slippage has occurred be recommended to the Cabinet;

(4)          That approval for bringing forward allocations from 2015/16 in respect of a small number of capital schemes on which  expenditure had been incurred ahead of schedule be recommended to Cabinet; and

(5)          That approval of the funding proposals outlined in the report in respect of the capital programme in 2014/15 also be recommended to the Cabinet.