Agenda item

To receive the Financial Year 2022/2023 - Quarter One Capital Budget Monitoring report of the Chief Executive, to be considered by Cabinet on 27 September 2022.

Please note an additional report from the Financial Planning Task Group, following its meeting on 26 September 2022, will be published as an agenda supplement.

The Chairman introduced a report within the Agenda Pack which set out the Capital Programme for 2022/23 as of 30 June 2022 for the first quarterly budget monitoring period.

The Chairman noted that in Agenda Supplement 3, was a report from the Financial Planning Task Group, which considered the Cabinet report on Monday. Cabinet received the report, and the Task Group’s verbal comments, on Tuesday.

The following comments were received by Cllr Nick Botterill, Cabinet Member with responsibility for Finance:

·       The Capital Programme budget has reduced from £279.176m and currently stands at £269.427m as of 30 June 2022.

·       It was noted that capital spend is much more vulnerable to inflation than revenue spending and therefore it is likely that there will be further delay to projects as well as some projects becoming unviable.

·       A take-away thought from the Quarter One monitoring as identified as looking at how the Council can better reflect what projects are realistic and can be delivered within a year.

The following comments were received by the Section 151 Officer:

·       The Section 151 Officer was set to Chair a meeting of the Asset Gateway Board in the coming week, which would look at the results for the level of spend for Quarter One as well as considering schemes in the programme for Quarter Two with forecasting and re-programming.

·       Work is being conducted to investigate how the £269.427m will come down to a more realistic figure of what will be spent in this financial year should cash flows be managed as expected.

Cllr Gavin Grant introduced the report provided by the Financial Planning Task Group, which noted the following points:

·       The overprogramming of the Capital programme was referenced as well as the under-delivery of it and the implications on cashflow.

·       It was stated that though the underperformance of Capital work can be seen as a material benefit, this is not good practice and there is therefore frustration that though substantial capital funding is allocated, borrowing provision is potentially made which comes at a cost against capital spend.

·       Attention was drawn to paragraph 10, which referenced changes to procedures and processes with the additional rigour and focus put into place welcomed by the Financial Planning Task Group.

·       It was suggested that it could be worthwhile to understand the work of the Asset Gateway Board as well as changes to processes and procedure.

·       It was stated that the current position is predictable, with run rates having been similar for capital spend as they had been last year.

The following comments were received by Members of the Committee:

·       Concern was raised in regard to the need for the Council to recognise when they are being over ambitious with Capital projects, with examples cited of schools being informed they would be given improvements but the Council then only delivering a portion of then. It was clarified by the Section 151 Officer that such work would be happening but had been reprogrammed for Easter next year and that more information about reprofiling and reprogramming could be included in an appendix to future report submissions.

·       It was suggested that Children’s Select Committee take an in-depth look into the delivery of Capital projects for school, with it stated by the Financial Planning Task Group that select committees should be aware of the revenue and capital schemes within their areas of work.

At the conclusion of discussion, it was,

Resolved:

The Overview and Scrutiny Management Committee agreed to note:

1.     The 2022/23 Capital Programme as at Quarter 1 and the capital spend as of 30 June 2022; and

2.     The report of the Financial Planning Task Group, having reviewed the report in detail before Cabinet;

3.     To note that Children’s Select Committee will be requesting a report on capital funding for the maintenance of school buildings.