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Agenda Item No

 

The Vale of Glamorgan Council

 

Cabinet Meeting: 17 November, 2014

 

Report of the Leader

 

Initial Capital Programme Proposals 2015/16

 

Purpose of the Report

1.         To gain approval for the revised Capital Programme for 2014/15 and the Initial Capital Programme Proposals for 2015/16 so that they may be submitted to Scrutiny Committees for consultation.

2.         To advise Cabinet of the progress on the 2014/15 Capital Programme for the period 1st April 2014 to 30th September 2014 and, where necessary, to request changes to the Programme.

 

Recommendations

It is recommended:-

1.         That the Initial Capital Programme Proposals for 2015/16 to 2019/20 be approved for consultation with the relevant Scrutiny Committees.

2.         That any recommendations of Scrutiny Committees are passed to Corporate Resources Scrutiny Committee as the lead Scrutiny Committee in order for their views to be forwarded to Cabinet.

3.         That Cabinet approves the following changes to the 2014/15 Capital Programme:

·               Fire Precaution Works - A virement of funding to the scheme of £6K from the budget for Fairfield Replacement Flat Roof.

·               Bryn Hafren Replacement Boiler - A virement of £12K from Barry Comprehensive Replacement Boiler and a further virement of £7K from Ysgol St Curig Re-roofing and replacing defective timbers.

·               Rural Integrated Transport Initiative - Increase the 2014/15 Capital Programme by £100K for the WG Pilot Transport Project Rural Integrated Transport Initiative.

4.         That Cabinet approve the inclusion of the following capital schemes in the 2014/15 Capital Progarmme, to be funded from an increased revenue contribution:

·               Llandough Playground - £20K

·               Bro Morgannwg Flat Roof - £80K

·               Public Conveniences Refurbishment - £100K

5.         That Cabinet authorises the use of article 13.09 of the Council's Constitution (urgent decision procedure) to increase the 2014/15 Capital Programme for the following capital schemes to be funded from an increased revenue contribution in 2014/15 and therefore, enable officers to carry out the works within the current financial year:

·               Llangan Demountable - £350K

·               Llanfair Demountable - £350K

·               Penarth Esplanade/Cliff Road Improvements - £450K

·               Highways Improvements - £250K

·               Parks Refurbishment - £200K

·               Barry Island Enhancements Phase 2 - £300K

6.         That the use of article 13.09 in recommendation 5 above be reported to Council in line with article 13.09 (c) of the Council's Constitution.

7.         That Cabinet recommend to Council the following changes to the 2014/15 and 2015/16 Capital Programmes:

·               Ysgol Nant Talwg - Increase the 2014/15 budget by £9K to £1.603M. Bring forward £7K from 2015/16 to 2014/15 and increase the overall scheme budget by £2K in 2014/15, to be funded by an additional contribution from the School Investment Strategy reserve.

·               Ysgol Dewi Sant - Reduce the 2014/15 budget by £700K to £1.145M and carry forward this sum to 2015/16.

·               Barry Cluster - Ysgol Gwaun Y Nant and Oakfield - Reduce planned spend in 2014/15 by £1.412M and carry forward this sum to 2015/16.

·               Llantwit Learning Community (LLC) - Reduce the overall budget figure to £19.750M and bring forward £474K to 2014/15, in line with the financial profile to be submitted to Welsh Government as part of the Full Business Case (FBC).

·               Client Record System - Carry forward £400K for a new Social Services Client Record System to 2015/16 due to the delay in awarding the national contract.

·               Vehicle Replacement Programme - Carry forward £952K to 2015/16 and £738K to 2016/17, reducing the budget in the 2014/15 programme to £1.082M.

·               Penarth Esplanade - Carry forward funding for Penarth Esplanade scheme to 2015/16 £50K and £50K to 2016/17.

·               Ashpath Footpath Improvements - Carry forward funding £72K to the 2015/16 Capital Programme.

·               S106 Funded Schemes - Increase the Capital Programme for 2014/15 by £346K and £350K in 2015/16 for the following schemes to be funded by S106 contributions;

- Cogan Hall Farm - Dinas Powys to Cosmeston Cycleway Link £150K in total, with £15K in 2014/15 and £135K in 2015/16.

- Plassey Street/Glebe Street Zebra Crossing £30K in 2014/15.

- Plassey Street/High Street Zebra Crossing £20K in 2014/15.

- Windsor Road/Plassey Street Roundabout Junction Enhancements £100K in 2014/15.

- Windsor Street/Pill Street Dedicated Right Hand Turn £110K in 2014/15

- Lighting Scheme for Zig Zag Path £100K in total, with £25K in 2014/15 and £75K in 2015/16.

- Pedestrian Crossing across Ffordd Y Millennium and Improved Bus Access £69K in total, with £17K in 2014/15 and £52K in 2015/16.

- Pedestrian Crossing across Thompson Street/Holton Road £24K in total, with £6K in 2014/15 and £18K in 2015/16.

- Pedestrian Access Buttrills Road/Holton Road £93K in total, with £23K in 2014/15 and £70K in 2015/16.

·               Renewal Area - Carry forward £496K from 2014/15 Capital Programme to 2015/16 as follows; £70K Holton Road Phase 1, Holton Road Phase 2 £155K, Holton Road Phase 3 £105K and Holton Road Phase 4 £125K, Castleland Renewal Area Phase 3E £9K, Castleland Renewal Area 4A £20K , and Castleland Renewal Area Phase 4B £12K.

·               Space Project - Carry forward £1.178M funding for the Space Project to 2015/16 Capital Programme.

8.         That Cabinet approve and refer to Council for approval, the increased requirement of £2.638M for unsupported borrowing required between 2014/15 and 2016/17, as a result of the Local Government Borrowing Initiative for 21st Century Schools.

Reasons for the Recommendations

1.         In order to gain the views of Scrutiny Committees.

2.         In order that Cabinet be informed of the comments of Scrutiny Committees before making a final proposal on the 2015/16 Capital Programme.

3.         To amend the 2014/15 Capital Programme.

4.         To amend the 2014/15 Capital Programme.

5.         To amend the 2014/15 Capital Programme pursuant to article 13.09 of the Council's Constitution.

6.         In line with article 13.09 (c) of the Council's Constitution.

7.         To amend the 2014/15 and future years Capital Programme and to seek approval from Cabinet and Council.

8.         To seek approval for increased unsupported borrowing in the Capital Programme.

Relevant Issues and Options

2014/15 Capital Programme

 

3.         Appendix A details financial progress on the Capital Programme as at 30th September 2014.  

Director of Learning and Skills

4.         Fire Precaution Works - Additional works on Bryn Hafren acoustic ceilings have been required urgently for Health and Safety reasons and caused this budget to be approximately £6K overspent. It is requested that a virement of £6K is made from the Fairfield Replacement Flat Roof budget, which has a budget of £260K and is expected to outturn at £254K.

5.         Bryn Hafren Replacement Boiler - Projected outturn on this budget is £46K against a budget of £27K, it is requested that a virement of £12K is made from the Barry Comprehensive Replacement Boiler scheme and a further virement of £7K is made from the Ysgol St Curig Re-roofing and replacing defective timbers scheme.

6.         21st Century Schools Investment Strategy  - Include amendments to the following schemes:

·               Ysgol Nant Talwg - It is requested to bring forward £7K from 2015/16 to 2014/15 and to increase the overall scheme budget by £2K in 2014/15, to be funded by an additional contribution from the School Investment Strategy Reserve. The amended budget will be as shown in the table below;

 

 

2013/14

2014/15

2015/16

Total

 

£000's

£000's

£000's

£000's

Vale of Glamorgan Council

0

1,338

32

1,370

WG Funding

1,131

238

0

1,369

Vale of Glamorgan Council Slippage

0

27

0

27

Total Ysgol Nant Talwg

1,131

1,603

32

2,766

 

·               Ysgol Dewi Sant  - The spend profile has been reviewed for this scheme and it is requested that £700K is carried from 2014/15 to 2015/16 and £35K is brought forward from 2016/17 to 2015/16. The amended budget will be as shown in the table below;

 

 

2014/15

2015/16

2016/17

Total

 

£000's

£000's

£000's

£000's

Vale of Glamorgan Council

134

929

35

1,098

WG Funding

989

652

0

1,641

Vale of Glamorgan Council Slippage

22

0

0

22

Total Ysgol Dewi Sant

1,145

1,581

35

2,761

 

·               Barry Cluster - Ysgol Gwaun Y Nant and Oakfield - The spend profile against this scheme has been reviewed and it is requested that there is a reduction in the 2014/15 budget of £1.412M and to carry forward this sum to 2015/16. It is also requested that £398K is brought forward from 2016/17 to 2015/16. An adjustment to reduce the remaining budget in 2016/17 by £55K to £47K is required to correct the overall budget figure. The amended budget will be as shown in the table below;

 

 

2014/15

2015/16

2016/17

Total

 

£000's

£000's

£000's

£000's

Vale of Glamorgan Council

443

1,430

47

1,920

WG Funding

745

980

0

1,725

Vale of Glamorgan Council Slippage

147

0

0

147

Total Ysgol Gwaun Y Nant and Oakfield

1,335

2,410

47

3,792

 

·               Llantwit Learning Community (LLC) - It is requested that the overall budget for this scheme is reduced to £19.750M following Welsh Government approval of the amended Strategic Outline Case (SOC). The scheme has been reprofiled and it is also requested to bring forward £474K into 2014/15 in line with the financial profile to be submitted to Welsh Government as part of the Full Business Case (FBC). The amended budget will be as shown in the table below;

 

 

2014/15

2015/16

2016/17

2017/18

2018/19

Total

 

£000's

£000's

£000's

£000's

£000's

£000's

Vale of Glamorgan Council

474

2,931

7,439

115

29

10,988

WG Funding

0

2,674

4,963

1,125

0

8,762

Total LLC

474

5,605

12,402

1,240

29

19,750

 

7.         Additional Capital Schemes - It is requested that the following schemes totalling £800K are included in the 2014/15 Capital Programme to be funded from an additional revenue contribution.

·               Llandough Playground £20K

·               Bro Morgannwg Flat Roof £80K 

·               Llangan Demountable £350K

·               Llanfair Demountable £350K

 

Director of Social Services

8.         Client Record System -It is requested that £400K funding is carried forward to 2015/16 for a new Social Services Client Record System. A national exercise is underway to identify one supplier of a social care and community health service record system. The Council is an interested party in this exercise and will not be looking to change the current supplier until this exercise is completed. The awarding of the national contract is now delayed until the end of 2014 therefore this funding is unlikely to be utilised in the current financial year.

Director of Visible Services and Housing

9.         Vehicle Replacement Programme - It is requested to carry forward £952K to 2015/16 and £738K to 2016/17, reducing the total budget in the 2014/15 programme to £1.082M. The Vehicle Replacement programme will be reviewed as a result of the outcome of the Transport Review prior to the Final Budget Proposals being submitted in February 2015.

10.      It is requested that the following schemes totalling £1M are included in the 2014/15 Capital Programme to be funded from an additional revenue contribution

·               Public Conveniences Refurbishment - £100K

·               Penarth Esplanade/Cliff Road Improvements £450K

·               Highways Improvements £250K

·               Parks Refurbishment £200K

 

Director of Development Services

11.      Penarth Esplanade Feasibility - It is requested that there is a carry forward of budget for the Penarth Esplanade Feasibility scheme of £50K to 2015/16 and £50K to 2016/17. Progress on this scheme has not been feasible in 2014/15 due to other priorities and commitments.

12.      Ashpath Footpath Improvements - It is requested to carry forward funding of £72K to the 2015/16 Capital Programme as the implementation of the full programme has been delayed due to land issues. The remaining £28K is retained in 2014/15 to enable a scheme to resolve the flooding issue to be implemented. A bid for improvements to the footpath has been resubmitted as part of the Initial Capital Programme proposals to request that £100K for the footpath widening, for improved security and to improve the cycle path is available in 2015/16.

13.      Rural Integrated Transport Initiative - Cabinet on 12th May 2014 (Minute C2330), agreed to accept £100K of grant funding for a WG Pilot Transport Project for Rural Integrated Transport. It is requested to increase the 2014/15 Capital Programme by £100K.

14.      S106 Funded Schemes -  An increase of £346K in 2014/15 and £350K in 2015/16 is requested to be funded by S106 contributions as outlined below;

·               Cogan Hall Farm - Dinas Powys to Cosmeston Cycleway Link £150K in total,with £15K in 2014/15 and £135K in 2015/16.

·               Plassey Street/Glebe Street Zebra Crossing £30K in 2014/15.

·               Plassey Street/High Street Zebra Crossing £20K in 2014/15.

·               Windsor Road/Plassey Street Roundabout Junction Enhancements £100K in 2014/15.

·               Windsor Street/Pill Street Dedicated Right Hand Turn £110K in 2014/15

·               Lighting Scheme for Zig Zag Path £100K in total, £25K in 2014/15 and £75K in 2015/16.

·               Pedestrian Crossing across Ffordd Y Millennium and Improved Bus Access £69K in total, with £17K in 2014/15 and £52K in 2015/16.

·               Pedestrian Crossing across Thompson Street/Holton Road £24K in total, with £6K in 2014/15 and £18K in 2015/16.

·               Pedestrian Access Buttrills Road/Holton Road £93K in total, with £23K in 2014/15 and £70K in 2015/16.

15.      Renewal Area - A carry forward of £496K from the 2014/15 Capital Programme to 2015/16 is requested for the following schemes; £70K Holton Road Phase 1, Holton Road Phase 2 £155K, Holton Road Phase 3 £105K and Holton Road Phase 4 £125K. Holton Road Phase 1 has now been tendered, Phase 2 of the scheme is currently out to tender and phases 3 and 4 will be tendered by January. The following amounts will be carried forward to 2015/16 to allow 12 month retentions to be paid against the schemes Castleland Renewal £9K Area Phase 3E, Castleland Renewal Area 4A £20K and Castleland Renewal Area Phase 4B £12K.

16.      It is requested that a scheme for Barry Island Enhancements Phase 2 Works totalling £300K is included in the 2014/15 Capital Programme to be funded from an additional revenue contribution.

Director of Resources

17.      Space Project - A carry forward of £1.178M to the 2015/16 Capital Programme is requested for the Space Project to align the programme more closely with the expiry of leases on council buildings.

Variance between Actual Spend to date and Profiled Spend

18.      Cabinet have previously agreed that further information would be provided where schemes have a value of over £500,000 and show a variance of 20% or more between actual spend and the profile. The following schemes meet this criteria:-

·               Ysgol Dewi Sant - Budget amendment has been requested as part of this report, reducing planned expenditure in 2014/15 by £700K.

·               Ysgol Barry Cluster- Gwaun Y Nant and Oakfield - A budget amendment has been requested as part of this report, reducing planned expenditure in 2014/15 by £1.412M.

·               WHQS Works- As noted in the previous monitoring report there is likely to be a variance in the WHQS expenditure as the extent of the works required in a property is not known until the works commence. Less has been spent than was projected for Rewire schemes, Kitchen Replacements, Bathroom works and schemes in Non Traditional Properties. More has been spent than was projected for Central Heating works and General Improvement schemes, the total budget is unaffected. The allocation of the WHQS budget will be reviewed as part of the forthcoming Housing Business Plan.

·               Local Road Network Improvements - As noted in the previous monitoring this scheme has been subject to delay this financial year however a further £791K has been spent in October 2014 which will bring expenditure in line with budget profile.

·               Disabled Facilities Grants - As detailed in previous monitoring there is a variance between profiled budget and actual because the profiled budget has been based on historical patterns of spend. Changes made to processes within the service for 2014/15 has led to a more consistent pattern of approvals and spend throughout the financial year. This budget will be monitored closely to ensure that overall expenditure remains within the available funding.

2015/16 to 2019/20 Capital Programme

19.      The Welsh Government (WG) announced the provisional 2015/16 General Capital Funding, on 8th October 2014. The 2015/16 capital settlement represents a £62K decrease on the 2014/15 Final Settlement which equates to a 1% cut. There is no indication of the level of funding likely beyond 2015/16 therefore in line with the approach adopted in the Medium Term Financial Plan the proposals assume a reduction of 10% for each year of the programme from 2016/17. This has been reflected in the proposed Capital Programme 2015/16 to 2019/20 which is shown in the table in Appendix B.

20.      In line with the financial strategy, the Council will mitigate the deteriorating situation by looking to progress only those schemes which are deemed to be a key corporate priority, whilst also seeking to gain assurance that such schemes are delivered on time and within budget.

21.      The Major Repairs Allowance (MRA), which is the grant that provides capital funding to the Housing Revenue Account (HRA), for 2015/16 has not yet been announced by the Welsh Government.  Cabinet will be advised once the announcement is made. An assumption has been made in Appendix B that the grant will continue at the allocation reflected in the current business plan of £2.8M in 2015/16 and throughout the period of the Capital Programme. The actual MRA in 2014/15 is £2.76M and this figure will be reflected in the Housing Business Plan when it is brought to Cabinet in December 2014; the revised figure will then be reflected in the Final Capital Programme in February 2015.

22.      In addition to external funding, the Council will finance part of the Capital Programme from its own resources, e.g. capital receipts and reserves.  

23.      The table below details the General Capital Funding and internal resources required to fund the proposed schemes which are detailed in Appendix B.

 

 

Analysis of Net Funding Required for the Indicative 2015/16 Capital Programme

GENERAL FUND                                                                £’000               £’000

Welsh Government Resources 

Supported Borrowing                                                           3,398

General Capital Grant                                                          2,068

                                                                                                                        5,466

Council Resources

Capital Receipts                                                                   2,260

Reserves/Leasing                                                                 9,920

Unsupported Borrowing                                                       2,074

                                                                                                                        14,254           

Net Capital Resources                                                                              19,720                       

HOUSING REVENUE ACCOUNT                                £’000                  £’000

Housing Reserves                                                         4,141

Housing Capital Receipts                                                     0

Housing Unsupported Borrowing                                 11,292

Net Capital Resources                                                                              15,433

 

24.      The indicative 2015/16 Capital Programme shown in Appendix B includes allocations already approved by Council. Appendix B also reflects the amendments requested within this report.

 

Capital Bids 2015/16 to 2019/20

 

25.      New capital bids were invited for return by 30th September 2014 and the number of bids received were low (1 from Social Services, 11 from Visible Services and 6 from Development). Departments were requested to rank their own bids in order of importance before submission, and bids from each Department were forwarded to the Corporate Asset Management Group (CAMG) for evaluation.

26.      The CAMG used the criteria set out by the Budget Strategy; the bids were prioritised in terms of their corporate priority and the risk they pose to the Council if they are not pursued. Following this the prioritisation of bids was reviewed by the Budget Working Group. The risk assessment element was undertaken in line with the Council's Corporate Risk Management Strategy as follows;

 

Possible Impact or Magnitude of Risk

 

Catastrophic

 

MEDIUM

 

MEDIUM/HIGH

 

HIGH

 

VERY HIGH

 

High

 

MEDIUM/LOW

 

MEDIUM

 

MEDIUM/HIGH

 

HIGH

 

Medium

 

 LOW

 

MEDIUM

 

MEDIUM

 

MEDIUM/HIGH

 

Low

 

VERY LOW

 

 LOW

 

MEDIUM/LOW

 

MEDIUM

Risk Matrix

Very Unlikely

Possible

Probable

Almost Certain

Likelihood/Probability of Risk Occurring

 

27.      Taking into account the nature of capital schemes, the following criteria were applied to assess corporate priority:

Corporate Priority

Score

Commitments and areas where the Council has no control over the expenditure, e.g. contractual and legal commitments, absolute minimum statutory service, taxes, etc.

3

Very high priority (publicly announced commitment e.g. items included in the Community Strategy, Corporate Plan etc.)

2

Invest to Save and preventative expenditure

2

Statutory expenditure above the absolute minimum and other priorities

1

Low Priority

0

 

 

 

 

 

 

 

 

 

 

 

  

28.      Only those schemes assessed as corporate priority 1 or higher and medium risk or higher are included in these proposals. The bids that did not meet these criteria or were excluded from consideration because funding has already been allocated as part of the current Capital Programme are set out in Appendix C with a reason for their exclusion.

29.      Submitted as part of the capital bids were the following two bids. The bids were resubmitted to request that funding be made available in future years because the existing budget will not be contractually committed at the end of 2014/15;

·               Ashpath Footpath Improvements - There have been delays on implementation of the full scheme due to land issues. In 2014/15, it is proposed that a scheme intended to resolve the flooding issues  that will cost £28K is implemented. The bid for improvement to the footpath has been resubmitted as part of the Initial Capital Programme for 2015/16 and in addition to the £72K carried forward it is requested that an additional £28k is made available for footpath widening, improved security and improvements to the cycle path. This increased cost will be funded by an additional contribution from Capital Receipts.

·               Penarth Esplanade Feasibility - The purpose of this scheme is to consider options for physical improvements to the Esplanade, given the progress made to date on key developments such as Penarth Pavillion, Beachcliff and the Town Plan. Due to other priorities and commitments progress on the scheme has not been feasible in 2014/15. It is requested that £50K funding is carried forward from 2014/15 to 2015/16 and a further £50K is carried forward from 2015/16 to 2016/17.

30.      Within the Resources Capital Programme is £300K each year to be used to fund ICT Capital Projects. In 2015/16 it is proposed that £250K of this sum will be allocated as follows;

·               Unix Infrastructure Infrastructure Refresh £250k - The current Solaris estate is 7 years old and is end-of-life. The Council currently has in the region of 40 Unix servers.  This scheme will include the procurement and replacement of servers, to consolidate where appropriate and to reduce ongoing cooling, power and maintenance costs.

31.      As part of the Transport review the use of vehicles by the Authority has been extensively reviewed, this has meant that the purchase of new vehicles under the scheme has been delayed. In addition the level of expenditure for the scheme has been amended in the Capital Programme to reflect the continuing need to replace vehicles across the Council, the proposed revised expenditure is set out in the table below;

 

 

2014/15

2015/16

2016/17

2017/18

2018/19

2019/20

 

£000's

£000's

£000's

£000's

£000's

£000's

Original Expenditure

2,772

1,189

509

128

0

0

Revised Expenditure

1,082

2,141

1,596

694

1,818

962

 

32.      The level of and financing of this expenditure will be reviewed as a result of the outcome of the Transport review and the amended proposals will be brought as part of the Final Budget Proposals in February 2015.

33.      Cabinet on 28th July 2014 (Minute C2419) agreed the inclusion of £418K in 2015/16 and £249K in 2016/17 for the Tackling Poverty Grant. It has also been approved that in 2015/16 £116K and 2016/17 £40K of Barry Regeneration Project Development Fund would be utilised as match funding for the Grant. In addition s106 contributions of £60K in 2015/16 and £86K in 2016/17 will also be utilised for the project. These contributions are reflected in Appendix B.

34.      In addition to bids meeting the criteria for inclusion in the Capital Programme, there have been a number of changes approved by Cabinet since the final budget proposals 2014/15 to 2018/19 in February 2014 that have an impact on the Capital Programme. These changes include capital sums carried forward; changes to the School Investment Programme and Housing Improvement Plan are set out below.

 

School Investment Programme

 

35.      The 21st Century Schools Programme is the Welsh Government's funding initiative for investment in schools. The first tranche of schemes under Band A of the funding were submitted prior to November 2011. Band A schemes run between 2013/14 and 2018/19. Band B schemes are expected to commence in 2019/20.

36.      The schemes included under Band A submission for construction between 2013/14 and 2018/19 are; Ysgol Nant Talwg, Ysgol Dewi Sant, Barry Cluster Schemes at Ysgol Gwaun Y Nant and Oakfield and also at Colcot and Llantwit Learning Community.

37.      In April 2014, WG notified the Council that some of the funding for Band A of the 21st Century Schools Programme will be in the form of unsupported borrowing instead of a revenue grant.  The Council will be expected to borrow; however, WG will provide revenue funding to cover the cost of the loan.  In 2014/15 this will be via a specific grant and from 2015/16 the funding will be distributed through the Revenue Support Grant.  This has no impact on the value of the Capital Programme, only the way in which it is funded. The table below shows the sums to be borrowed between 2014/15 and 2016/17 and the corresponding borrowing costs provided by WG.

 

Period

Loan Value/Sum Invested

£

Loan Charges Funded by WG

£

2014/15

923,252

53,651

2015/16

1,187,038

68,980

2016/17

527,573

30,658

TOTAL

2,637,863

153,289

 

 

38.      In September 2014 the Vale of Glamorgan Council received notification from WG that the funding envelope for 21st Century Schools was increased from £20.960M to £29.8985M. The increase approved represents an increased contribution of £3.017M to £13.4965M from the WG. This increase represents additional funding required to allow the proposed Llantwit Learning Community project to proceed.

39.      Following discussion with WG, it is proposed that the funding split for the Colcot Barry Cluster scheme and Llantwit Learning Community is amended, increasing the Vale of Glamorgan Council contribution by £250K and reducing the WG contribution to £0K for the Colcot Barry Cluster Scheme. A corresponding adjustment against the Llantwit Learning Community is proposed to increase the WG contribution by £250K and reduce the contribution made by the Vale of Glamorgan Council by £250K. This amendment is being made because the 21st Century Schools Grant require the schemes to meet BREEAM (British Research Establishment Environmental Assessment Method) standards and this is not considered to be cost effective for the size of the Colcot scheme.

40.      The following table shows the planned spend on the Education capital programme from 2014/15 to 2019/20 incorporating expenditure under Band A schemes funded under 21st Century Schools Programme. Gross Expenditure totals £63.522M.

 

By Scheme

14/15

15/16

16/17

17/18

18/19

19/20

Total

 

£000's

£000's

£000's

£000's

£000's

£000's

£000's

Penarth Learning Community

12,397

4,680

0

0

0

0

17,077

Demolition of Ysgol Maes Dyfan

200

0

0

0

0

0

200

Ysgol Nant Talwg (£1131k 13/14)

1,576

32

0

0

0

0

1,608

Ysgol Nant Talwg Slippage

27

0

0

0

0

0

27

Ysgol Dewi Sant

1,123

1,582

35

0

0

0

2,740

Slippage Ysgol Dewi Sant

22

0

0

0

0

0

22

Llantwit Learning Community

474

5,605

12,402

1,240

29

0

19,750

Barry Cluster Gwaun Y Nant &Oakfield

1,188

2,410

47

0

0

0

3,645

Slippage Barry Cluster

147

0

0

0

0

0

147

Barry Cluster Colcot

0

0

250

250

0

0

500

Barry Comp. Art Block

315

10

0

0

0

0

325

School Investment Programme

0

500

0

0

0

0

500

Modular Building Resiting

0

500

0

0

0

0

500

Asset Renewal

900

900

1,000

1,000

1,000

1,000

5,800

Asset Renewal Contingency

65

50

50

50

50

50

315

Llanfair S106

81

0

0

0

0

0

81

Rhoose S106

0

1,000

1,762

0

0

0

2,762

Llangan Classroom Base

0

117

0

0

0

0

117

Victorian Schools

600

1,200

1,200

800

0

0

3,800

Schools ICT Loans

200

200

200

200

200

200

1,200

Property Condition Surveys

40

40

0

0

0

0

80

Schools Capital Loan Schemes

300

300

300

300

300

300

1,800

Other

526

0

0

0

0

0

526

Total

20,181

19,126

17,246

3,840

1,579

1,550

63,522

 

41.      The above includes an additional £3.2M  between 2015/16 and 2017/18 over and above the £600K already allocated in 2014/15 Capital Programme to support works across 22 Victorian Schools to address the existing issues with lath and plaster and masonry deterioration. Work is currently being carried out by Property Section to assess the situation and a full report will be brought to Cabinet with a strategy to address these problems.

42.      In addition, following an analysis of asset renewal spend on schools in recent years it has been noted that actual required funding is around £1M each year rather than the £600K budgeted.  The annual allocation has therefore been increased to £1M per annum from 2016/17. This additional contribution will be funded from the School Investment Strategy reserve. A further £500K has also been included in the 2015/16 Capital Programme to be used to resite and renew the modular building used for the current Ysgol Dewi Sant. This additional contribution will be funded from the School Investment Strategy reserve.

 

43.      The Education Capital programme is funded as follows;

 

By Funding Source

14/15

15/16

16/17

17/18

18/19

19/20

Total

 

£000's

£000's

£000's

£000's

£000's

£000's

£000's

General Capital Funding

2,972

2,512

4,593

890

679

650

12,296

Capital Receipts

3,661

600

4,526

800

0

0

9,587

Other Reserves and Revenue Contribution

1,025

0

0

0

0

0

1,025

School Investment Reserve

1,472

3,411

1,302

525

400

400

7,511

School Rationalisation and Improvements Reserve

300

300

300

300

300

300

1,800

IT Fund

200

200

200

200

200

200

1,200

Prudential Borrowing

3,370

2,074

0

0

0

0

5,444

Prudential Borrowing Pending Receipts

2,000

0

0

0

0

0

2,000

Total Internal Funding

15,000

9,097

10,921

2,715

1,579

1,550

40,863

Other Councils Contributions

0

1,330

0

0

0

0

1,330

S106 Agreements

829

1,117

1,362

0

0

0

3,308

Welsh Government Grant

4,352

7,582

4,963

1,125

0

0

18,022

Total Funding

20,181

19,126

17,246

3,840

1,579

1,550

63,522

 

 

44.      Band B Funding under the 21st Century Schools Programme is due to start in 2019/20.  This analysis assumes the Council schemes will not commence until 2020/21 as the schemes are not yet approved. The Council will need to consider what schemes are likely to be included in the Band B School Investment Programme to address growing pressures within Vale of Glamorgan schools. These pressures include but are not limited to the following;

·               Consideration of a possible Co-education school at Secondary level in Barry.

·               Increase in demand for Welsh Medium places at Primary and Secondary level across Penarth, Barry and Rural Vale Clusters.

·               Increase in demand for English Medium places in the Penarth area.

·               Increase in demand for English and Welsh Medium places as a result of existing development schemes and new schemes proposed in the Local Development Plan.

·               The need to amalgamate and federate schools to strengthen performance, foster cohesion and support among schools and release efficiencies.

45.      The projected cost of schemes under Band B is £38M, which it is assumed will be funded as follows; £19M WG Grant contribution at 50%, £4.9M General Capital Funding, £6.7M Capital Receipts, £0.7M School Investment Strategy reserve, £6.7M s106 Contributions.

46.      In order to fund the additional contributions for Asset Renewal, Band B schemes and Victorian Schools strategy, it is proposed that the School Investment Strategy Reserve is increased by £3.5M identified from unearmarking other specific reserves.

 

Housing Improvement Plan

 

47.      The new Housing Improvement Plan is due to be submitted to Cabinet for approval in December 2014. The recommendations of the amended plan will be reflected in the Final Capital Proposals when they are brought to Cabinet in February 2015.

48.      The capital funded from revenue (CERA) for the current Housing Improvement Plan is £4.141M, an increase of £933K on the £3.208M currently reflected in the Capital Programme. The 2015/16 Capital Programme has been amended to reflect an increased revenue contribution of £4.141M in 2015/16 and reduced Prudential Borrowing of £11.293M, pending the amended programme in December 2014.

 

Next Steps

 

49.      The next stage is for the estimates to be submitted to Scrutiny Committees for consultation.  Corporate Resources Scrutiny Committee is the lead Scrutiny Committee and will consider both the Initial Budget Proposals and the comments that other Scrutiny Committees have made.  The responses of Scrutiny Committee must be made no later than the 16th December 2014.

50.      Each Scrutiny Committee will be asked to first consider the initial Capital Programme proposals as shown in Appendix B .  They then may make recommendations for changes.  If they wish to make a change, the reason for this needs to be recorded in order to assist the Cabinet and the Budget Working Group (BWG) draw up the final proposals.

51.      Managers will be asked to revisit the schemes included in Appendix B and to confirm final costs and spend profile prior to the final proposals being presented to Cabinet, which will be no later than 23rd February 2015. 

52.      Cabinet’s Final Capital Programme proposals will be considered by Council on 4th March 2015.

 

 

Resource Implications (Financial and Employment)

 

53.      The total net capital expenditure of the proposed programme in Appendix B, over the 5 years, is approximately £96.144M.

54.      If the schemes shown in Appendix B are approved, the effect on General Fund useable capital receipts will be as shown in the following table. 

 

Capital Receipts

General

Ringfenced Social Services

Ringfenced Education

 

    £000's

           £000's

           £000's

Anticipated Balance as at 1st April 2015

8,233

1,225

0

 

 

 

 

Anticipated Requirements – 2015/16

(1,660)

0

(600)

Anticipated Receipts – 2015/16

0

0

1,285

Balance as at 31st March 2016

 6,573

1,225

685

 

 

 

 

Anticipated Requirements – 2016/17

(5,525)

0

(1,684)

Anticipated Receipts – 2016/17

0

0

2,500

Balance as at 31st March 2017

1,048

1,225

1,501

 

 

 

 

Anticipated Requirements – 2017/18

0

(1,225)

(800)

Anticipated Receipts – 2017/18

0

0

2,500

Balance as at 31st March 2018

1,048

0

3,201

 

 

 

 

Anticipated Requirements – 2018/19

0

0

0

Anticipated Receipts – 2018/19

0

0

0

Balance as at 31st March 2019

1,048

0

3,201

 

 

 

 

Anticipated Requirements – 2019/20

0

0

0

Anticipated Receipts – 2019/20

0

0

2,800

Balance as at 31st March 2020

1,048

0

6,001

 

 

 

 

Anticipated Requirements between 2020/21 and 2025/26

0

0

(6,001)

Anticipated Receipts between 2020/21 and 2025/26

0

0

0

Balance as at 31st March 2026

1,048

0

0

 

55.      The Education Capital Programme utilises general capital receipts in addition to capital receipts ringfenced for Education.

56.      The capital receipt received in 2014/15 from the sale of Gardenhurst has been ringfenced for Social Services capital expenditure. Options are being explored by the Council however, it is expected that the full capital receipt of £1.225M will be utilised for older persons accommodation in 2017/18.

57.      In line with the overall strategy and specific suggestions proposed by the BWG, in order to resource the Capital Programme, reserves will be utilised over the period of the Capital Programme 2015/16 to 2019/20.

58.      The Project Fund will be used to fund schemes assessed on an invest to save basis, and in certain circumstances business critical schemes may also be funded from this reserve with the prior approval of the Director of Resources. A balance of £2M will be retained as a balance on this fund.  The projected usage of this reserve over the period of the Capital Programme is shown below;

Project Fund

             £'000

Anticipated Balance as at 1st April 2015

4,244

 

 

Anticipated Requirements – 2015/16

(1,684)

Anticipated Receipts – 2015/16

100

Balance as at 31st March 2016

2,660

 

 

Anticipated Requirements – 2016/17

(400)

Anticipated Receipts – 2016/17

60

Balance as at 31st March 2017

2,320

 

 

Anticipated Requirements – 2017/18

(100)

Anticipated Receipts – 2017/18

60

Balance as at 31st March 2018

2,280

 

 

Anticipated Requirements – 2018/19

0

Anticipated Receipts – 2018/19

0

Balance as at 31st March 2019

2,280

 

 

Anticipated Requirements – 2019/20

0

Anticipated Receipts – 2019/20

0

Balance as at 31st March 2020

2,280

 

59.      The above forecast balances need to be seen in the context of significant pressures for spending which are not yet included in the Capital Programme. These include the backlog of school, highways and buildings improvements.

Sustainability and Climate Change Implications

60.      The bids must also be evaluated for Sustainable Development.  The four areas of Sustainable Development to be considered are:

·               Living within environmental limits

·               Ensuring a strong, healthy and just society

·               Achieving a sustainable economy

·               Promoting good governance

61.      Sustainability checklists will be requested from Project Managers for each of the proposed bids included in Appendix B. These will be reviewed by members of the Sustainable Development Working Group, with a view to ensuring that wherever possible the four sustainable targets are addressed. The results will be incorporated into the Final Capital Programme Proposals report in February 2015. 

Legal Implications (to Include Human Rights Implications)

62.      The Council is required to show that capital expenditure is covered by identified resources.

Crime and Disorder Implications

63.      The obligations of the Council with regard to Section 17 need to be fully considered in the budget decision making process.

Equal Opportunities Implications (to include Welsh Language issues)

64.      Additional finance improves the Council’s opportunities for assisting disadvantaged members of society.

Corporate/Service Objectives

65.      Contributes to the corporate priority of Community Leadership by the provision of sound financial management. 

Policy Framework and Budget

66.      This report follows the procedure laid down in the constitution for the making of the budget.  The 2015/16 budget proposals will require the approval of Council.  Some of the proposals for amendments to the 2014/15 Capital Programme are the responsibility of Cabinet and others are for Council.  These are identified in the recommendations to this report.

Consultation (including Ward Member Consultation)

67.      The Corporate Management Team and all Scrutiny Committees have been consulted on the proposals.

Relevant Scrutiny Committee

68.      Corporate Resources

Background Papers

Bids received from departments

Correspondence received from the Welsh Government

 

Contact Officer

Gemma Jones, Principal Accountant

 

Officers Consulted

The following Officers have been consulted on the contents of this report:-

Corporate Management Team

 

Responsible Officer:

Sian Davies

Managing Director

 

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