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The Vale of Glamorgan Council

Cabinet Meeting: 16th November 2015

Report of the Leader

Initial Capital Programme Proposals 2016/17

Purpose of the Report

  1. To gain approval for the Initial Capital Programme Proposals for 2016/17 so that they may be submitted to Scrutiny Committees for consultation.
  2. To advise Cabinet of the progress on the 2015/16 Capital Programme for the period 1st April 2015 to 30th September 2015 and, where necessary, to request changes to the Programme.

Recommendations

It is recommended:-

  1. That the Initial Capital Programme Proposals for 2016/17 to 2020/21 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 2015/16 and 2016/17 Capital Programme:
  • Colcot Primary Roof - It is requested that £100k of the 2016/17 Schools Asset Renewal budget is brought forward into 2015/16 to allow this scheme to proceed.
  • Modular Building Resiting Ysgol Dewi Sant - It is requested that £200k of the 2016/17 Schools Asset Renewal budget is brought forward into 2015/16.
  • Urgent Health and Safety Works - It is requested that the Urgent Health and Safety Works budget is increased by £4,917, to be funded from a revenue contribution from the Schools budget.
  • Cartref Porthceri Lift Replacement - It is requested that this scheme is renamed 'Social Services Lift Refurbishments'.
  • Southway Lift Replacement - It is requested that this scheme is renamed 'Residential Homes Call and Assistance Systems'.
  • Weycock Cross to Barry Comp Road Resurfacing - It is requested that the 2015/16 Capital Programme is increased by £40k, to be funded from the Visible Services reserve.
  • Wick to Ewenny Highway Improvements - It is requested to increase the 2015/16 Capital Programme by £40k, to be funded from the Visible Services Reserve.
  • Coast Protection and Land Drainage General - It is requested to vire £50k to the Causeway Improvement Scheme.
  • Jenner Park and Colcot Pitches - It is requested that the funding of this scheme is amended to £753k being funded from the Jenner Park reserve and £100k from a Sports Council for Wales grant.
  • Penarth Renewal Area - It is requested to vire £55k from Castleland Renewal Area to Penarth Renewal Area.
  • Barry Regeneration Partnership Scheme - It is requested to reprofile the projects as set out within the report, paragraph 17.
  • Pedestrian Crossing across Ffordd Y Millenium and Improved Bus Access - It is requested that this budget is increased by £52k to be funded from S106 monies and that the scheme is renamed 'Pedestrian/Cycle improvements at Ffordd Y Millenium'.
  • Town Hall Library External Repairs -It is requested that £12k is vired to the Space Project Scheme.
  • Civic Offices Re-wire Scheme - It is requested to vire £225k in 2015/16 and £58k in 2016/17 from the Space Project scheme to the Civic Offices Re-wire scheme.
  • Court Road Contaminated Land Issues - It is requested to change the name of this scheme to 'Court Road Depot - Survey, Feasibility and Infrastructure Budget'.
  • Vehicle Replacement Programme - It is requested to reprofile the Vehicle Replacement Programme expenditure as set out in paragraph 45 of this report.
  1. That Cabinet recommend to Council the following change to the 2015/16 and 2016/17 Capital Programmes:
  • St Cyres Lower School Marketing and Disposal - It is requested that the Capital Programme is increased by £20k in 2015/16 and £65k in 2016/17 to be funded from capital receipts.

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 2016/17 Capital Programme.
  3. To amend the 2015/16 and 2016/17 Capital Programme.
  4. To amend the 2015/16 and future years Capital Programme and to seek approval from Cabinet and Council.

Relevant Issues and Options

2015/16 Capital Programme

  1. Appendix A details financial progress on the Capital Programme as at 30th September 2015.

Director of Learning and Skills

  1. Colcot Primary Roof - The roof at Colcot Primary is in need of replacement as the underlying single ply roof is breaking down and causing ongoing leaks. It is requested that £100k of the 2016/17 Schools Asset Renewal budget is brought forward into 2015/16 to enable the urgent works to the roof to commence this financial year.
  2. Modular Building Resiting Ysgol Dewi Sant - Under this existing scheme the former Ysgol Dewi Sant modular building is being resited at Fairfield Primary. A highways planning condition at Fairfield Primary has to be met before the building can be occupied. It is therefore requested that £200k of the 2016/17 Schools Asset Renewal budget is brought forward into 2015/16 in order for the works to be carried out this financial year.
  3. Barry Comprehensive School Works - At Cabinet on the 5th October 2015 (minute C2931) it was resolved 'T H A T the development of a programme of work for Barry Comprehensive School be authorised to enable improvements to be made to the learning environment in the short term and that a further report on the proposed programme and estimated funding requirements be presented to Cabinet for further consideration in due course.' Whilst a programme of works is still being compiled, it is requested that up to £1m is made available for these works to be carried out. This will be funded by a contribution from revenue into the School Investment Strategy reserve, as a result of a revenue underspend in 2015/16. Further detail of the specific requirements will be presented to a future Cabinet as per the recommendation of Cabinet on 5th October 2015 and the Capital Programme will then be amended accordingly.
  4. St Cyres Lower School Marketing and Disposal - A budget of £85k is required for marketing agent's fees and Project Management Unit Fees for the above scheme. It is requested that the Capital Programme is increased by £20k in 2015/16 and £65k in 2016/17 to be funded from capital receipts. This change will also require approval by Council.
  5. Education Asset Renewal Contingency Budget - At Cabinet on the 23rd February 2015, minute number C2650, recommendation 3 stated 'THAT the Managing Director or the Head of Finance, in consultation with the Cabinet Member responsible for Finance, be given delegated authority to make additions, deletions or transfers to or from the 2015/16 to 2019/20 Asset Renewal budget as appropriate'. This Delegated Authority has been used to allocate £41,900 of the contingency budget to the schemes below: -
  • Romilly Primary School £25,500
  • Urgent Health and Safety Works £16,400

In order to complete the Urgent Health and Safety Works at various schools, it is requested that the Urgent Health and Safety Works budget is increased by £4,917, to be funded from a revenue contribution from the Schools budget.

Director of Social Services

  1. Cartref Porthceri Lift Replacement - There is currently a £70k budget allocated for this scheme within the 2015/16 Capital Programme. A survey has confirmed that the lift needs to be refurbished and not replaced. It is therefore requested that this scheme is renamed 'Social Services Lift Refurbishments' and works will be extended to include refurbishment works to lifts in Cartref Porthceri, Southway and Ty Dyfan.
  2. Southway Lift Replacement - There is currently a £70k budget allocated for this scheme within the 2015/16 Capital Programme. This lift is now being refurbished as stated above. The call and assistance systems within the four residential homes are in need of replacement and it is therefore requested to change the name of this scheme to 'Residential Homes Call and Assistance Systems' for these works to be carried out from this allocation.

Director of Environment and Housing

  1. Weycock Cross to Barry Comprehensive Road Resurfacing - The road between Weycock Cross and Barry Comprehensive School requires resurfacing and it is therefore requested that the 2015/16 Capital Programme is increased by £40k, to be funded from the Visible Services reserve.
  2. Wick to Ewenny Highway Improvements - Highway Improvement works are required between Wick and Ewenny and it is therefore requested that the 2015/16 Capital Programme is increased by £40k, to be funded from the Visible Services Reserve.
  3. Coast Protection and Land Drainage General - £50k has been allocated within this budget for works which are part of the Causeway Improvement Scheme. In order to enable a more co-ordinated approach to the scheme, it is requested that £50k is vired to the Causeway Improvement Scheme. The budget for this scheme will total £950k.
  4. Jenner Park and Colcot Pitches - A grant of £100k has been awarded to the Council from The Sports Council for Wales. The £853k budget for this scheme is currently fully funded from the Jenner Park reserve. It is now requested that the contribution from the reserve is reduced and the scheme will now be funded by £753k from the reserve and £100k from The Sports Council for Wales grant.
  5. Coldbrook Flood Risk Management - Emergency Powers, have been used for the inclusion of £2,959k for the construction phase and £257k for the design and development phase into the Capital Programme in order to complete the flood risk management works. This scheme will be funded as detailed below: - 

Construction Phase

£'000

Design and Development Phase

£'000

WG Grant

2,151

WG Grant

218

ERDF Grant

114

Council Match Funding

39

Natural Resources Wales Grant

302

   

Council Match Funding

392

   

Total

2,959

Total

257

Managing Director and Resources

  1. Penarth Renewal Area - The total estimated spend for the Penarth Renewal area has increased from £100k to £155k, due to the cost of an extra property being added to the contract and also due to unforeseen items of work that were identified during the contract period. A virement of £55k is therefore requested from the Castleland Renewal Area budget to the Penarth Renewal Area budget.
  2. Barry Regeneration Partnership Scheme - At Cabinet on the 13th July 2015, £600k was added to the Capital programme for the Barry Regeneration Partnership Scheme. £361k of this sum has been allocated using Delegated Authority as set out below: -
  • Barry Island: Western Shelter Lighting £50k
  • Barry Island Interpretation, Tourist Information Centre and WIFI £50k
  • Victoria Gardens: area improvements (phase 3) £60k
  • George Street Play Area: resurface pedestrian links £41k
  • Cowbridge Street/Bridge Street Play Area: refurbishment £50k
  • Eastern Approach (Cardiff Road): gateway improvements £100k
  • Business Service Centre Improvements £10k

The £600k was allocated over financial years 2015/16 and 2016/17, it is therefore requested to re-profile these schemes as set out in the table below: -

 

Scheme

2015/16 £'000

2016/17 £'000

Barry Island: Western Shelter Lighting

8

42

Barry Island Interpretation, Tourist Information Centre and WIFI

35

15

Victoria Gardens: area improvements (phase 3)

0

60

George Street Play Area: resurface pedestrian links

41

0

Cowbridge Street/Bridge Street Play Area: refurbishment

50

0

Eastern Approach (Cardiff Road): gateway improvements

0

100

Business Service Centre Improvements

10

0

Further assessment is being undertaken to allocate the remaining balance of £239k to priority schemes.

  1. Barry Regeneration Partnership Scheme - It has been approved by delegated authority that £107k of the unallocated original budget in 2015/16 and £34k of the unallocated budget in 2016/17 for this scheme be allocated as follows:-
  • Project Management Unit £60k for 2015/16
  • Landscape Design Service £25k for 2015/16
  • Urban Regeneration Service £4k for 2015/16 and £28k for 2016/17
  • High Street (Springboard) £6k for 2015/16 and £6k for 2016/17
  • Gladstone Gardens £2k for 2015/16
  • Main Street Area Improvements £4k for 2015/16
  • Eastern Approach £6k for 2015/16
  1. Disabled Facilities Grant (DFG) - There is a predicted shortfall in the capital budget for DFG's. It was envisaged that once the backlog of applications had been dealt with the number of applications being processed would reduce to normal throughput levels. However, there has been a steady increase in the number of applications being received which is a trend that is likely to continue. As a result, Emergency Powers have been used to approve an increase of £200k in the 2015/16 DFG budget, funded by a contribution from the Policy revenue budget. This will ensure that there is sufficient funding to complete this year's applications without creating a new backlog.
  2. Pedestrian Crossing across Ffordd Y Millenium and Improved Bus Access - Further studies have identified that this scheme is not attainable within the budget available, therefore, alternative schemes have been identified through active travel route assessments. It is requested that this budget is increased by £52k to be funded from s106 monies and that the scheme is renamed 'Pedestrian/Cycle improvements at Ffordd Y Millenium'. The total budget for this scheme will be £69k. Member consultation has been undertaken under the s106 protocol and the contribution needs to be spent by January 2016.
  3. Town Hall Library External Repairs - Property Services have reviewed this scheme and the funding is no longer required for external works. Internal works to the Town Hall Library have been identified as part of the Space Project scheme, it is therefore requested that the budget of £12k is vired to the Space Project scheme.
  4. Civic Offices Re-wire Scheme - In 2011 a Property Condition Survey for the Civic Offices identified that the building required re-wiring (to include general lighting, emergency lighting, power and distribution). A fixed electrical installation test was undertaken during 2014/15 and identified that all floors in the building are "Unsatisfactory". £283k has been allocated within the 2015/16 Space Project budget towards this scheme. In order to enable a more co-ordinated approach to the scheme, it is requested to vire £225k in 2015/16 and £58k in 2016/17 to create a new scheme called the Civic Offices Re-wire.
  5. Court Road Contaminated Land Issues - It is requested that the name of this scheme is changed to 'Court Road Depot - Survey, Feasibility and Infrastructure Budget'. This will enable the Council to facilitate various survey and feasibility works for the circa 4 acre depot site and if required, identify and carry out any associated infrastructure works. The budget for this scheme is £350k.

Variance between Actual Spend to date and Profiled Spend

  1. 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:-
  2. Llantwit Learning Community - Amendments to programming/sequencing of works has resulted in actual expenditure that is less than the initial spend profile. This does not adversely affect the final cost of the project.
  3. Modular Building Resiting Ysgol Dewi Sant - Amendments to programming/sequencing of works has resulted in actual expenditure that is more than the initial spend profile. This does not adversely affect the final cost of the project.
  4. It is proposed that the budget for these schemes is reprofiled for the remainder of the year and changes will be reported as part of the ongoing capital monitoring process.

2016/17 to 2020/21 Capital Programme

  1. The Council's Capital budget is determined largely by the General Capital Funding Settlement (GCF). In previous years, the provisional GCF settlement was received from Welsh Government (WG) during October, with the final settlement being received during December. This year, however, the initial budget proposals have not yet been received.
  2. A statement on the timing of the Welsh Government's Budget for 2016/17 was released by the Minister for Finance and Government Business on 6th October 2015. It stated that the late timing of the UK Government's Spending Review presented WG with significant challenges for the preparation and publication of the Draft Budget 2016/17. WG will not know their Budget for 2016/17 until 25th November 2015. WG is facing unprecedented levels of uncertainty and consequently will not publish the Draft Budget for 2016/17 until 8th December 2015 and the Final Budget on 1st March 2016.
  3. A joint letter dated 26th October 2015 has been received from the Minister for Public Services and the Leader of the Welsh Local Government Association, outlining the outcome of their joint discussions regarding the timing of the release of the settlement. They provide a timetable which shows that local authorities will be advised of the Provisional Settlement on 9th December 2015 and of the Final Settlement on 2nd March 2016, however, the Final Budget will be debated by WG on 9th March 2016. They consider that the proposed timetable does not result in any legal or financial impediment to the budget process, however, they acknowledge that the timetable does present challenges.
  4. Even with a lack of clarity on the funding position for 2016/17 and these unprecedented circumstances, in order to be in a position to meet the statutory deadlines and the requirements for consultation set out in the Council's Constitution, much of the work on quantifying the resource requirements for the Capital programme will still need to be carried out before the initial and final GCF settlement is notified to the Council. Therefore, in line with the approach adopted in the current Medium Term Financial Plan, the proposals assume a reduction of 10% for each year of the programme for 2016/17 and onwards. This has been reflected in the proposed Capital Programme 2016/17 to 2020/21 which is shown in the table in Appendix B.
  5. 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.
  6. The Major Repairs Allowance (MRA), which is the grant that provides capital funding to the Housing Revenue Account (HRA), for 2016/17 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 £2.76m in 2016/17 and throughout the period of the Capital Programme.
  7. In addition to external funding, the Council will finance part of the Capital Programme from its own resources, e.g. capital receipts and reserves.
  8. 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 2016/17 Capital Programme

   

GENERAL FUND

£'000

£'000

Welsh Government Resources

   

Supported Borrowing

3,058

 

General Capital Grant

1,861

 

                                                                                                                                                

 

4,919

Council Resources

   

Capital Receipts

7,199

 

Reserves/Leasing

Unsupported Borrowing

9,135

528

 

                                                                                                                                                               

 

16,862

Net Capital Resources

 

21,781

HOUSING REVENUE ACCOUNT

£'000

£'000

Housing Reserves

3,910

 

Housing Unsupported Borrowing

19,434

 

Net Capital Resources

 

23,344

  1. The indicative 2016/17 Capital Programme shown in Appendix B includes allocations already approved by Council. Appendix B also reflects the amendments requested within this report.

Capital Bids 2016/17 to 2020/21

  1. New capital bids were invited for return by 30th September 2015 and the number of bids received was low (3 from Learning and Skills, 12 from Social Services, 11 from Environment and Housing and 2 from Managing Director and Resources). 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.
  2. The CAMG used the criteria set out in the Budget Strategy so 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

  1. 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

 

  1. 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.
  2. Education Capital Loan Scheme - These are internal loans which are initially funded from the School Rationalisation Reserve and schools then made repayments back into the reserve over a number of years. In order to maintain a healthy balance within the reserve, it is proposed that the current yearly allocation of £300k is reduced to £200k between 2016/17 and 2020/21.
  3. Llantwit Learning Community - In order to complete this scheme, an additional £650k is required. The increased costs are due to construction inflation, a greater understanding of the works required for parking and the bus turning circle and works required to the drainage, which were identified in a survey. It is requested that the 2016/17 Capital Programme is increased by £650k, funded from the School Investment Strategy Reserve which has been increased by this amount as a result of a revenue underspend in 2015/16.
  4. Rhoose Primary New School - £500k has been ring-fenced for this scheme within the School Investment Strategy Reserve. It is therefore proposed that the Capital Programme is increased by £500k in 2017/18 to include this allocation.
  5. Social Services Asset Renewal - The condition of Social Services buildings are deteriorating. To enable the maintenance of these properties, it is proposed that £100k is vired each year from 2016/17 to 2020/21 from the All Services Asset Renewal budget to create a Social Services Asset Renewal budget. Social Services will be able to allocate the funding within year to priority works that are required.
  6. As part of the Transport review the use of vehicles by the Authority has been extensively reviewed, which has meant that the purchase of new vehicles under the scheme has been delayed. In addition, an amendment to the level of expenditure in the Capital Programme is required, to reflect the continuing need to replace vehicles across the Council. The proposed revised expenditure is set out in the table below;
 

 

2015/16

2016/17

2017/18

2018/19

2019/20

2020/21

 

£000's

£000's

£000's

£000's

£000's

£000's

Original Expenditure

2,375

1,596

694

1,818

962

0

 

Revised Expenditure

2,121

1,453

616

1,338

800

800

 

  1. Vehicles can be funded from the Vehicle Renewals Fund or can be leased. 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 2016.
  2. Renewal Area - An award of specific grant funding has been received from WG to enable capital works to be undertaken in the Castleland Renewal Area during 2016/17. It is requested that £677,981 is included in the 2016/17 Capital Programme for this grant.
  3. Disabled Facilities Grants (DFG) - A capital bid amendment form has been submitted to request additional funding in future years for DFG's. This will ensure that there is sufficient funding to complete future year's applications without creating a new backlog. It is requested that the Capital Programme is increased by £400k in 2016/17 and £450k in 2017/18, to be funded from a reserve set up from a revenue underspend in 2015/16.
  4. Carbon Management Fund - The Carbon Management Fund Scheme is an on-going scheme to assist with the Council's energy reduction measures. To enable these works to continue, it is requested that a budget of £200k is included in the 2016/17 Capital Programme. This will be funded from the Energy Management Fund Reserve.
  5. Civic Offices Re-wire - In 2011 a Property Condition Survey for the Civic Offices identified that the building required re-wiring (to include general lighting, emergency lighting, power and distribution). A fixed electrical installation test was undertaken during 2014/15 and identified that all floors in the building are "Unsatisfactory". It is requested that the 2016/17 Capital Programme is increased by £400k using funding which has already been ring fenced within the Project Fund for these works. A capital bid for the Civic Offices Rewire has also been included in Appendix B.
  6. Regeneration Fund - This scheme is funded from the Regeneration reserve. £50k per annum of this budget had been ringfenced to matchfund the Rural Development grant. Expenditure for this grant will now be incurred through revenue and therefore it is proposed that the budget is reduced by £50k each year between 2016/17 and 2020/21 and this use of the reserve will be redirected to the revenue budget.
  7. The changes detailed above have been reflected in Appendix B.
  8. 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 2015/16 to 2019/20 were approved in February 2015. These changes include capital sums carried forward; changes to the School Investment Programme and Housing Improvement Plan. These changes have been included in Appendix B.

School Investment Programme

  1. 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.
  2. The schemes included under the Band A submission for construction between 2013/14 and 2018/19 are; Ysgol Nant Talwg, Ysgol Dewi Sant, Ysgol Gwaun Y Nant and Oakfield , Colcot and Llantwit Learning Community.
  3. In April 2014, WG notified the Council that some of the funding for Band A schemes would 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 through the Revenue Support Grant. This has no impact on the value of the Capital Programme, only the way in which it is funded.
  4. In September 2014 the Vale of Glamorgan Council received notification from WG that the funding envelope for 21st Century Schools would be increased from £20.960m to £29.898m. As reported in the Final Capital Programme Proposals in February 2015, the Council has increased their contribution to the programme by a further £950k for the Llantwit Major Learning Community Scheme and this was approved by Cabinet on 12th January 2015 (Minute C2607), therefore, the total funding envelope is now £30.848m. This excludes the £650k for Llantwit Learning Community requested as part of this report.
  5. The Band A Programme is progressing well. Phase one of the Penarth Learning Community scheme is complete and the Learning Community is occupied. Works are on-going for phase two which consists of external works and demolition. Ysgol Nant Talwg and Ysgol Dewi Sant are complete and the schools are occupied. Phase one of Ysgol Gwaun Y Nant is complete and phase two works are on-going, the building works at Oak Field are now complete and both schools are occupied. The Llantwit Learning Community scheme is underway and works started on site in August 2015.
  6. The following table shows the planned spend on the Education capital programme from 2016/17 to 2020/21 incorporating expenditure under Band A schemes funded under 21st Century Schools Programme. Gross Expenditure totals £79.879m.

By Scheme

16/17

17/18

18/19

19/20

20/21

Total

 

£000's

£000's

£000's

£000's

£000's

£000's

Ysgol Dewi Sant

35

0

0

0

0

35

 

Llantwit Learning Community

13,052

1,240

29

0

0

14,321

 

Gwaun Y Nant &Oakfield

47

0

0

0

0

47

 

Barry Secondary Schools Transformation

750

0

0

0

0

750

 

Colcot Primary

250

250

0

0

0

500

 

Asset Renewal

700

1,000

1,000

1,000

600

4,300

 

Asset Renewal Contingency

50

50

50

50

50

250

 

St Cyres Lower School Marketing & Disposal

65

0

0

0

0

65

 

Rhoose Primary New School

0

1,500

1,762

0

0

3,262

 

Gwenfo Primary Extension

394

11

0

0

0

405

 

St Brides Expansion

346

10

0

0

0

356

 

Victorian Schools

1,200

800

0

0

0

2,000

 

Eagleswell Demolition

300

0

0

0

0

300

 

Band B Schemes

0

0

0

18,361

32,927

51,288

 

Schools ICT Loans

200

200

200

200

200

1,000

 

Schools Capital Loan Schemes

200

200

200

200

200

1,000

 

Total

17,589

5,261

3,241

19,811

33,977

79,879

 
  1. The total allocation for Victorian Schools between 2015/16 and 2020/21 is £3.061m to support works across 21 Victorian Schools to address the existing issues with lath and plaster and masonry deterioration. The £1.061m budget for 2015/16 has been allocated to the following schemes via emergency power £270k to Victoria Primary School External Refurbishment Works, £741k to Overboarding Lath and Plaster Ceilings and £50k to Sandstone Repairs. Work is currently being carried out by Property Services to assess the works required between 2016/17 and 2017/18 and a full report will be brought to Cabinet with a strategy to address these problems.
  2. There is an asset renewal budget of £900k in 2015/16, 200k of this budget has been vired to the Modular Building Resiting Ysgol Dewi Sant Scheme. The asset renewal budget increased to £1m from 2016/17; however, £300k is being requested to be brought forward into 2015/16 as detailed earlier in this report. In addition there is a £50k asset renewal contingency budget in each year. From 2020/21 the asset renewal budget has to reduce to the original £600k allocation due to increasing constraints on resources and the 21st Century Schools Band B Programme. Education in consultation with Property Services, allocate this budget in year to various schemes including rolling programmes of boiler and toilet renewal.
  3. Band B Schemes are expected to commence in 2019/20 and in December 2014 the Council submitted proposals for a number of schemes to Welsh Government. Based on latest indications, it has been assumed that 50% funding will be available from Welsh Government to fund these schemes. However, there is no guarantee that this funding will be available from Welsh Government or what form it will take.
  4. Indicative strategic projects for the Council under Band B funding would seek to address the following:
  • Expanding primary sector capacity and addressing the condition of school buildings in various areas across the Vale.
  • Rationalisation of school buildings currently situated on split sites.
  1. The total cost for Band B schemes is projected to be in the region of £67.4m and of this total £18.361m and £32.927m have been included in Appendix B for 2019/20 and 2020/21 respectively.
  2. The Education Capital programme is funded as follows;

By Funding Source

16/17

17/18

18/19

19/20

20/21

Total

 

£000's

£000's

£000's

£000's

£000's

£000's

General Capital Funding

4,593

1,800

1,189

1,160

1,050

9,792

 

Capital Receipts

4,491

0

0

1,404

7,686

13,581

 

Other Reserves and Revenue Contribution

0

0

0

1,000

0

1,000

 

School Investment Reserve

2,433

915

290

1,397

3,391

8,426

 

School Rationalisation and Improvements Reserve

200

200

    200

200

200

1,000

 

IT Fund

200

200

200

200

200

1,000

  

Local Government Borrowing Initiative

528

0

0

0

0

528

 

Prudential Borrowing

0

0

0

0

0

0

 

Total Internal Funding

12,445

3,115

1,879

5,361

12,527

35,327

 

S106 Agreements

709

1,021

1,362

7,700

1,000

11,792

 

Welsh Government Grant

4,435

1,125

0

6,750

20,450

32,760

 

Total Funding

17,589

5,261

3,241

19,811

33,977

79,879

 

Housing Improvement Plan

  1. The 2015/16 Housing Improvement Programme budget totals £87.011m and £63.156m of this allocation relates to the buy-out from the housing subsidy system. The funding of the 2015/16 programme has been amended as set out in the table below: -

Funding

Current 2015/16 £'000

Amended 2015/16 £'000

Major Repairs Allowance Grant

2,760

2,760

Other Grant

2,069

2,069

Housing Capital Receipt

754

897

Housing Reserves

2,676

5,334

Unsupported Borrowing (Including HRA Buyout)

78,752

75,951

Total

87,011

87,011

Next Steps

  1. 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 is asked to consider both the Initial Budget Proposals and any recommendations that other Scrutiny Committees have made. The responses of Scrutiny Committee must be made no later than the 15th December 2015.
  2. Each Scrutiny Committee will be asked to first consider the Initial Capital Programme proposals as shown in Appendix B and to make any 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.
  3. 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.
  4. Currently the approved timetable requires Cabinet to approve the final budget proposals by no later than the 22nd February 2016 and that Cabinet's final budget proposals will be considered by Council at a meeting to be held on 2nd March 2016.
  5. As the Final Settlement will not be received from WG until 2nd March 2016, this timetable is now under review and will have to be revised.

Resource Implications (Financial and Employment)

  1. The total net capital expenditure of the proposed programme in Appendix B, over the 5 years, is approximately £104.525m.
  2. 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 2016

8,122

1,348

1,065

 

Anticipated Requirements - 2016/17

-5,515

0

-1,684

 

Anticipated Receipts - 2016/17

0

0

7,500

 

Balance as at 31st March 2017

2,607

1,348

6,881

 

Anticipated Requirements - 2017/18

0

-1,348

0

 

Anticipated Receipts - 2017/18

0

0

2,800

 

Balance as at 31st March 2018

2,607

0

9,681

 

Anticipated Requirements - 2018/19

0

0

0

 

Anticipated Receipts - 2018/19

0

0

0

 

Balance as at 31st March 2019

2,607

0

9,681

 

Anticipated Requirements - 2019/20

-4

0

-1,404

 

Anticipated Receipts - 2019/20

0

0

0

 

Balance as at 31st March 2020

2,603

0

8,277

 

Anticipated Requirements - 2020/21

-223

0

-7,686

 

Anticipated Receipts - 2020/21

0

0

0

 

Balance as at 31st March 2021

2,380

0

591

 

Anticipated Requirements between 2021/22 and 2026/27

0

0

-5,250

 

Anticipated Receipts between 2021/22 and 2026/27

0

0

4,750

 

Balance as at 31st March 2027

2,380

0

91

 

  1. The Education Capital Programme utilises general capital receipts in addition to capital receipts ringfenced for Education.
  2. The capital receipt balance for Social Services 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 £1.348m will be utilised for older persons accommodation in 2017/18.
  3. 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 2016/17 to 2020/21.
  4. 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 Head of Finance. 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 2016

2,918

Anticipated Requirements - 2016/17

-858

Anticipated Receipts - 2016/17

50

Balance as at 31st March 2017

2,110

Anticipated Requirements - 2017/18

-100

Anticipated Receipts - 2017/18

50

Balance as at 31st March 2018

2,060

Anticipated Requirements - 2018/19

0

Anticipated Receipts - 2018/19

50

Balance as at 31st March 2019

2,110

Anticipated Requirements - 2019/20

0

Anticipated Receipts - 2019/20

50

Balance as at 31st March 2020

2,160

Anticipated Requirements - 2020/21

0

Anticipated Receipts - 2020/21

50

Balance as at 31st March 2021

2,210

  1. 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

  1. 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
  1. 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 2016.

Legal Implications (to Include Human Rights Implications)

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

Crime and Disorder Implications

  1. 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)

  1. Additional finance improves the Council's opportunities for assisting disadvantaged members of society.

Corporate/Service Objectives

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

Policy Framework and Budget

  1. This report follows the procedure laid down in the constitution for the making of the budget. The 2016/17 budget proposals will require the approval of Council. Some of the proposals for amendments to the 2015/16 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)

  1. All Scrutiny Committees will be consulted on the proposals.

Relevant Scrutiny Committee

  1. The lead Scrutiny Committee is Corporate Resources.

Background Papers

Bids received from departments

Correspondence received from the Welsh Government

Contact Officer

Victoria Lloyd, Capital Accountant

Officers Consulted

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

Corporate Management Team

Budget Working Group

Responsible Officer:

Carys Lord

Section 151 Officer

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