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Agenda Item No. 7(a)

 

 

THE VALE OF GLAMORGAN COUNCIL

 

COUNCIL MEETING:  18 DECEMBER 2013

 

REFERENCE FROM CABINET: 18 NOVEMBER  2013

 

 

C2074             INITIAL CAPITAL PROGRAMME PROPOSALS 2014/15 (L) (SCRUTINY COMMITTEE – CORPORATE RESOURCES) –

 

Approval was sought for the revised capital programme for 2013/14 and the initial capital proposals for 2014/15 so that they may be submitted to Scrutiny Committees for consultation. Members were also advised of the progress on the 2013/14 Capital Programme for the period 1st April 2013 to 30th September 2013 and, where necessary, to request changes to the programme.

 

The following information was provided with regard to the 2013/14 Capital Programme.

 

Director of Learning and Skills

Request to carry forward £146,000 of funding for Oakfield new entrance and reception area to 2014/15 when the funding would be used for pitches, external play and woodland school facilities as part of the 21st Century Schools funded proposals for Ysgol Gwaun y Nant and Oakfield Primary School.

 

Director of Social Services

Flying Start Grants - Following approval from Welsh Government  additional funding had been made available to Flying Start in 2013/14, a provisional budget of £413,000 had been included in the Capital Programme and it was now requested to increase this by £131,520. The revised budget £544,520 would cover the following schemes;

 

Ladybirds provision at Holton School £193,250, £20,000 for equipment was already built into the capital programme for 2013/14.  The provision would consist of a room for childcare, toilet and office facilities a new entrance and an outside space.

 

·         £40,000 to fund a Parenting Suite at Holm View this would consist of a crèche, a room for group working as part of the parenting classes and also a preparation room.

·         Funding of £122,364 for the Flying Start Family Centre; this would fund a Parenting Room at the Gladstone Road site.

·         Funding £168,906 for Co-location project at Skomer Road office.

·         Rondel House Boiler Replacement - Emergency Powers had been used to approve the virement of £40,000 from Hen Goleg Boiler Replacement and Heating Works to Rondel House Boiler Replacement to ensure that the scheme was progressed in 2013/14. The sum was insufficient to fund a boiler replacement at Hen Goleg and a bid had been put in for additional funding for the replacement at Hen Goleg works as part of the 2014/15 budget process.

 

Director of Visible Services and Housing

Flood Risk Management - £750,000 was approved as part of the 2013/14 Capital Programme for various schemes to address flooding and drainage issues. The Highways and Engineering department had proposals for a number of schemes to deliver from the £750,000 Flood Risk Management funding. Whilst a small number of schemes were progressing including Llancadle, Old Wick Road and highway drainage improvements, the full details of these proposals would be the subject of a separate report by the Director of Visible and Housing Services.

 

Cross Common Road Bridge - It was requested that the Capital Programme was increased by £650,000 to address the outcome of a feasibility study which was considering options for the future of Cross Common Road Bridge, this would be funded from a revenue contribution. A report detailing this feasibility study will be presented to Cabinet shortly.

 

Housing Improvement Programme - Increase the Housing Revenue Account Capital Programme by £600,000 to fund work to be carried out on void properties; this would be funded from an increased contribution from revenue.  Welsh Housing Quality Standard (WHQS) works for Sheltered Housing -  As approved by Cabinet on 21 October, 2013 (Minute No. C2058) funding of £150,000 would be brought forward from the Capital programme in 2014/15 to progress WHQS works for sheltered housing.  This additional funding would enable completion of the Fairoaks site within this financial year and would have benefits in terms of tenants’ satisfaction and preliminary costs associated with site set up. There were 22 additional properties that would need to be upgraded to complete the improvement works in the Fairoaks area. 

 

Director of Development Services

S106/Belle Vue Park - It was requested that £10,000 be included in the Capital Programme for Section 106 funding and had been awarded to a project at Belle Vue Park. This entailed the replacement of an original water drinking fountain in the park; improve recycling facilities and a contribution towards an outdoor gym.

 

Variance between Actual Spend to date and Profiled Spend

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

 

WHQS Works - As outlined in previous capital monitoring reports there was always likely to be a variance in the WHQS expenditure as the extent of works required in a property was not known until the works commenced. During September, works on central heating/boilers and roofing works were behind profile, whilst asbestos management costs had exceeded the initial profile.

 

Learning in Digital (Wales) Grant - A large order £470,000 was placed during September which would rectify the discrepancy between the profile and actual expenditure and ensure the grant was fully spent by the grant deadline in December 2013.

 

Ysgol Nant Talwg, Barry - The variance between actuals to date at the end of September and profiled budget was due to a delay was issuing a certificate of payment. All required information was now in place and a payment was made in October which brought the actuals to date in line with the profiled expenditure.

 

Vehicles Renewal Fund - Expenditure was slightly behind profile due to second hand vehicles being purchased in year and some items of expenditure being delayed pending the outcome of decisions regarding future revenue services.

 

The Welsh Government (WG) announced the provisional 2014/15 General Capital Funding, on 16th October 2013. The 2014/15 capital settlement represented a £246,000 (4.7%) increase in funding over last year's allocation; however because this amount included the reinstatement of £280,000 transferred to supported borrowing for the Housing Revenue Account in 2013/14, the actual position for the Council was a reduction of £34,000 which represents a 0.61% cut. The indicative amount provided by WG suggests that capital funding would be maintained at this level for 2015/16. This had been reflected in the proposed Capital Programme 2014/15 to 2018/19 which was shown in the table in Appendix B.

 

Whilst the indicative amounts had been utilised in 2014/15 and 2015/16, for the purposes of this programme, the assumption of a 10% cut each year had been assumed in 2016/17, 2017/18 and 2018/19. In line with the financial strategy, the Council would mitigate the deteriorating situation by looking to progress only those schemes which were deemed to be a key corporate priority, whilst also seeking to gain assurance that such schemes were delivered on time and within budget.

 

On 13 February, 2008, Cabinet approved that the Director of Resources in consultation with the Cabinet Member responsible for Finance, be given delegated authority to transfer supported borrowing between General Fund and the Housing Capital budgets as appropriate. Due to the uncertainty regarding the future of Housing Subsidy, the Authority did not intend to seek a £280,000 transfer in each year of the capital programme as had been previously assumed; unsupported borrowing in the Housing Revenue Account has been increased accordingly.

 

The Major Repairs Allowance (MRA), which was the grant that provided capital funding to the Housing Revenue Account (HRA), for 2014/15 had not yet been announced by the Welsh Government.  Cabinet would be advised once the announcement was made. An assumption had been made in Appendix B that the grant would continue at the current allocation of £2.8 million in 2014/15 and throughout the period of the capital programme. 

 

In addition to external funding, the Council would finance part of the capital programme from its own resources, e.g. capital receipts and reserves.  

 

Appendix B attached to the report outlined the proposed 2014/15 Capital Programme. The table below details the General Capital Funding and internal resources required to fund the proposed schemes.

 

Analysis of Net Funding Required for the Indicative 2014/15 Capital Programme

GENERAL FUND                                                                £’000               £’000

Welsh Government Resources 

Supported Borrowing                                                        3,438

General Capital Grant                                                        2,092

                                                                                                                  5,530

Council Resources

Capital Receipts                                                                 2,509

Reserves/Leasing                                                               6,095

Unsupported Borrowing                                                     5,600

                                                                                                                 14,204

Net Capital Resources                                                                             19,734

HOUSING REVENUE ACCOUNT                                       £’000              £’000

Housing Reserves                                                              7,387

Housing Capital Receipts                                                   1,525

Housing Unsupported Borrowing                                       6,034

Net Capital Resources                                                                            14,946

 

The indicative 2014/15 Capital Programme shown in Appendix B included allocations already approved by Council.

 

With regard to Capital bids the number of bids received was reduced from the high volume in the previous year. This reduction reflected that the capital programme had been set to 2017/18 following the budget review that took place as part of the 2013/14 budget process. 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.

 

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

 

 

 

 

 

 

 

 

 

 

Only those schemes assessed as corporate priority 1 or medium risk and above were included in these proposals. The bids that did not meet these criteria or were excluded from consideration because funding had already been allocated were set out in Appendix C with a reason for their exclusion from the Capital programme. These had not been put forward for inclusion in the 2014/15 to 2018/19 programme. 

 

In addition to bids meeting the criteria for inclusion in the Capital Programme, there had been a number of changes approved by Cabinet since the final budget proposals in February 2013 that impact on the Capital Programme, these changes included amendments to the School Investment Strategy, budgets carried forward, an increase to the Schools ICT loan scheme and the new School Capital Loan scheme. Also reflected in Appendix B were proposed changes to the Housing Revenue Account Business Plan.

 

The next stage was for the estimates to be submitted to Scrutiny Committee for consultation.  Corporate Resources Scrutiny Committee was the lead Scrutiny Committee and would consider both the Initial Budget Proposals and the comments that other Scrutiny Committees had made.  The responses of Scrutiny Committee must be made no later than the 13th December 2013.

 

Each Scrutiny Committee would be asked to first consider the indicative capital proposals as shown in Appendix B.  They then may make recommendations for changes.  If they wished to make a change, the reason for this needed to be recorded in order to assist the Cabinet and the Cabinet Budget Working Group draw up the final proposals.

 

Managers would 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 would be no later than 24th February 2014. 

Cabinet’s final capital programme proposals would be considered by Council on 5th March 2014.

 

Part of the report was required to be referred to Council for approval as it followed the procedure laid down in the Constitution for the making of the budget.

 

RESOLVED -

 

(1)       .........................

 

(2)       .........................

 

 

(3)       T H A T the following changes to the 2013/14 Capital Programme be recommended to Council:

 

·         £146,000 be carried forward for Oakfield School new entrance and reception area, to 2014/15 when the funding will be used as part of the 21st Century Schools funded proposals for Ysgol Gwaun y Nant and Oakfield Primary School.

 

Reasons for decisions

 

(1)       .........................

 

(2)       .........................

 

(3)       To amend the 2013/14 capital programme.

 

 

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