Agenda item

Financial Year 2024/25 - Quarter Two Capital Budget Monitoring

To receive the report of the Chief Executive and Director – Finance and Procurement (S151 Officer).

Decision:

Resolved:

Cabinet is asked to approve:

a) the virement from Early Years and Childcare (£0.021m) and Schools Maintenance and Modernisation (£0.004m) to support additional works required through Access and Inclusion;

b) the virement of £0.109m from Fleet Vehicles to Waste to facilitate improved financial oversight of waste vehicle purchases;

c) the removal of £1.370m grant funding from the HUG 2 programme as agreed with the Department of Energy Security and Net Zero (DESNZ);

d) The grant income applied for and/or received as set out in Appendix C and Appendix D.

Cabinet is asked to note:

e) The additional budgets added to the programme of £13.342m under Chief Finance Officer delegated powers;

f) the removal of £1.370m budget under Chief Finance Officer delegated powers;

g) the end of year 2023/24 budget adjustment of £0.077m;

h) the budgets brought forward from future years into the 2024/25 programme totalling £4.886m under Chief Finance Officer delegated powers;

i) the budgets reprogrammed from 2024/25 into future years totalling £16.301m under Chief Finance Officer delegated powers;

j) Budget Movements between Schemes as detailed in Appendix A;

k) the revised 2024/25 Capital Programme forecast as at quarter two of £226.355m;

l) the capital spend as of 30 June 2024 of £67.931m

m) the use of £0.300m of earmarked reserves to enable Adults and Children’s Services to undertake a feasibility study of potential sites for accommodation

Reason for Decision:

To inform effective decision making and ensure sound financial management as part of the Councils overall control environment.

To inform Cabinet on the financial position of the Council on the 2024/25 capital programme as at quarter two (30 September 2024).

Minutes:

Cllr Nick Botterill, Cabinet Member for Finance, Development Management, and Strategic Planning, presented a report which provided details of the capital budget monitoring forecast for the second quarter of the financial year 2024/25, based on the position at the end of September 2024.

It was stated that the forecast of capital spending for the year stood at £226.355 as of 30 September 2024, once all the changes detailed in the report had been made. Whilst that level might not be reached due to the complexity of capital forecasting. Improvement continues to be made on the profiling of the programme, however more work is required to assess the profile of the programme better and it is critical that the programme better reflects the expected deliverability capacity and the external influences to this.

Cllr Botterill also clarified that much of the capital programme was grant funded from Government and third parties with no direct impact on revenue, and that the programme was focused on updating and modernising services such that delays would increase revenue costs.

The Leader welcomed the improvements in more realistic capital forecasting and the degree of consistency, noting that in previous years the programme may have been more aspirational. He highlighted that the total capital expenditure as at quarter two is £67.931m about 30% of the revised annual capital programme.

Cllr Graham Wright, Chairman of the Overview and Scrutiny Management Committee reported that the Committee would be considering the report in detail at their meeting on 27 November 2024. He also mentioned that the Financial Planning Task group met to consider the report on 15 November 2024.

Cllr Gavin Grant, Vice-Chairman of the Financial Planning Task Group, confirmed that the Task Group met on 15 November to consider the report. It was acknowledged that there would always be slippage in the programme which in most cases was outside the control of the Council and thanked officers for their excellent work in managing the Capital Budget. He indicated that there was optimism bias – a view that more can be achieved than evidence suggests is being achieved. He commented on the Capital Programme funding for 2024/25 in particular the borrowing element of £54.788m. A concern to the Task Group if Capital schemes slip to later years and the interest baring costs flow through to the following year. Cllr Botterill thanked Cllr Grant for a point well made. He explained that the borrowing figure would only be realised if all Capital schemes were undertaken during the year. Officers confirmed that the borrowing figure depended on factors such as slippage of schemes and their impact on the need for borrowing. These details would be taken on board for future reporting to Cabinet.