Agenda item

To consider the attached report (C-027-2018/19).

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

(2)        That the forecast application of usable capital receipts shown in the report, be approved;

(3)        That borrowing of an estimated £8,227,000, necessary to support the General Fund Capital Programme, be noted;

(4)        That the following amendments to the Capital Programme be recommended to Council to approve:

(a)          supplementary capital estimates of £56,000 for works to investment properties and £23,000 for the Shopping Park letting fees in 2018/19;

(b)          the inclusion of a supplementary capital estimate of £140,000 for works to let the units at the Landmark Building in 2018/19 and £70,000 for the installation of a new sub-station at North Weald Airfield, pending Cabinet report submission and approval;

(c)          additional allocations of £603,000 relating to the updated five-year planned facility management programme in 2021/22;

(d)          the inclusion of Capital allocations of £1,706,000, including recommendation (b), and £323,000 into 2018/19 and 2019/20 respectively as approved by appropriate delegations;

(e)          savings and reductions totalling £53,000 in 2018/19 and £10,000 in 2019/20 for General Fund projects as identified in the report;

(f)           virements relating to the Accommodation Project, pending approval, of £25,000 in 2018/19 and £400,000 in 2019/20 to be taken from on-hold planned maintenance budgets;

(g)          further virements in 2018/19 of £25,000 and £206,000 in 2019/20 within the General Fund and a transfer of a £33,000 potential saving within the car parking schemes;

(h)          additional allocations, savings, reductions and virements in respect of the Council’s housebuilding programme and other HRA capital schemes as identified in the report; and

(i)            carry forwards totalling £2,294,000 and £7,473,000 from 2018/19 to future years for General Fund and HRA capital schemes respectively, as outlined in the report and Resources Implications table.

The Business Support Services Portfolio Holder, Councillor Mohindra introduced the report on the Council’s Capital Programme.

This report set out the Council’s Capital Programme for the five-year period 2018/19 to 2022/23. It 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 has been prepared by updating the programme approved in February 2018, amended for any slippage and re-phasing approved in June 2018, as well as new schemes and allocations proposed by Cabinet since then. The allocations included in 2018/19 and 2019/20 represent proposed sums for capital schemes which the Council was committed to deliver. Allocations given for the years 2020/21 to 2022/23 represent forecast sums as a guide to future capital investment and the schemes to which they relate will require Cabinet approval before going ahead. The projects already approved within the Capital Programme have been reviewed and spending control officers have reassessed estimated final costs and the phasing of expenditure profiles for each scheme as part of the Capital Review. Recommendations have been made to make amendments as appropriate.

Councillor Philip noted the paragraph on the report talking about ICT and the purchasing of laptops; the sums did not seem to add up as it says that 399 out of 408 had been purchased with 10 left to buy. That would make 409 not 408. Councillor Mohindra said that he would look at the figures to make sure we were not over spending.

Councillor Sam Kane queried the Hill House Section 106 contribution, he wondered what the £7000 was for as the 106 money was not ours and was a much larger sum. Councillor Mohindra explained that the £7000 was just an adjustment of a previous version of £100,000 when in fact it was £107,000. This was just the adjustment.

Councillor Murray said that it was good to see grounds maintenance getting new ride-on-mowers. However he was not happy with paragraphs 45 and 46 of the report; he was not happy with the Oakwood Hill application and asked that the Council did not proceed with this. Councillor Whitbread welcomed the comments about grounds maintenance and noted that we needed to have the capital in the budget just in case we proceeded with this.

Councillor Brookes queried the contract with Biffa and the supplying of £500,000 to ensure stability of the waste management contract. This seemed quite a lot.  Councillor Avey noted that he was new to this Portfolio, noted this comment from Councillor Brookes and would get back to her. Councillor Whitbread added that sometime the Council had to meet their obligations when things like this happened; and recycling was an important thing to do.

Decision:

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

(2)        That the forecast application of usable capital receipts shown in the report, be approved;

(3)        That borrowing of an estimated £8,227,000, necessary to support the General Fund Capital Programme, be noted;

(4)        That the following amendments to the Capital Programme be recommended to Council to approve:

(a)          supplementary capital estimates of £56,000 for works to investment properties and £23,000 for the Shopping Park letting fees in 2018/19;

(b)          the inclusion of a supplementary capital estimate of £140,000 for works to let the units at the Landmark Building in 2018/19 and £70,000 for the installation of a new sub-station at North Weald Airfield, pending Cabinet report submission and approval;

(c)          additional allocations of £603,000 relating to the updated five-year planned facility management programme in 2021/22;

(d)          the inclusion of Capital allocations of £1,706,000, including recommendation (b), and £323,000 into 2018/19 and 2019/20 respectively as approved by appropriate delegations;

(e)          savings and reductions totalling £53,000 in 2018/19 and £10,000 in 2019/20 for General Fund projects as identified in the report;

(f)           virements relating to the Accommodation Project, pending approval, of £25,000 in 2018/19 and £400,000 in 2019/20 to be taken from on-hold planned maintenance budgets;

(g)          further virements in 2018/19 of £25,000 and £206,000 in 2019/20 within the General Fund and a transfer of a £33,000 potential saving within the car parking schemes;

(h)          additional allocations, savings, reductions and virements in respect of the Council’s housebuilding programme and other HRA capital schemes as identified in the report; and

(i)            carry forwards totalling £2,294,000 and £7,473,000 from 2018/19 to future years for General Fund and HRA capital schemes respectively, as outlined in the report and Resources Implications table.

Reasons for Proposed Decision:

The Capital Programme presented in the appendices is based on decisions already proposed by the Cabinet. The expenditure profiles suggested were based on Member 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 to 2022/23.

Other Options for Action:

Revenue balances will be used to support the Capital Programme initially and current forecasts suggests that in 2019/20 external borrowing will be required. The revenue consequence of reducing the level of capital and revenue balances over the next five years is to reduce investment income. At the same time, external borrowing would result in increased revenue costs in the form of interest charges and minimum revenue provision charges. Members may choose to reduce the General Fund and/or Housing Revenue Account Capital Programmes by re-considering the inclusion of some new schemes or re-assess the inclusion of some existing schemes.

With regard to financing the General Fund and HRA Capital Programmes, there are a number of options available. The proposal put forward sets the level of direct revenue funding at high levels in order to reduce the need for external borrowing. However, these contributions could be reduced by increasing the levels of external borrowing. This option has been rejected because the revenue contributions suggested in this report are affordable within the General Fund and HRA, according to current predictions, and the cost of increased borrowing would ultimately result in higher revenue costs.