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Agenda Item No.10(b)

 

THE VALE OF GLAMORGAN COUNCIL

 

COUNCIL MEETING: 17 DECEMBER 2014

 

REFERENCE FROM CABINET:  28 NOVEMBER 2014

 

 

C2534            INITIAL CAPITAL PROGRAMME PROPOSALS 2015/16 (L) (SCRUTINY COMMITTEE – CORPORATE RESOURCES) -                      

 

Approval was sought for the revised Capital Programme for 2014/15 and the Initial Capital Programme Proposals for 2015/16 so that they could be submitted to Scrutiny Committees for consultation.

 

Appendix A attached to the report detailed the financial progress on the Capital Programme as at 30 September, 2014.  

 

Director of Learning and Skills

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

 

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

 

21st Century Schools Investment Strategy  - Included amendments to the following schemes:

  • Ysgol Nant Talwg - It was 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 would 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 had been reviewed for this scheme and it was requested that £700K was carried from 2014/15 to 2015/16 and £35K was brought forward from 2016/17 to 2015/16. The amended budget would 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 had been reviewed and it was requested that there was a reduction in the 2014/15 budget of £1.412M and to carry forward this sum to 2015/16. It was also requested that £398K was brought forward from 2016/17 to 2015/16. An adjustment to reduce the remaining budget in 2016/17 by £55K to £47K was required to correct the overall budget figure. The amended budget would 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 was requested that the overall budget for the scheme was reduced to £19.750M following Welsh Government approval of the amended Strategic Outline Case (SOC). The scheme had been reprofiled and it was 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 would 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

 

Additional Capital Schemes - It was requested that the following schemes totalling £800K were 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

 

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

 

Director of Visible Services and Housing

 

Vehicle Replacement Programme - It was 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 would be reviewed as a result of the outcome of the Transport Review prior to the Final Budget Proposals being submitted in February 2015.

 

It was requested that the following schemes totalling £1M were 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

 

Penarth Esplanade Feasibility - It was requested that there was 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 had not been feasible in 2014/15 due to other priorities and commitments.

 

Ashpath Footpath Improvements - It was requested to carry forward funding of £72K to the 2015/16 Capital Programme as the implementation of the full programme had been delayed due to land issues. The remaining £28K was retained in 2014/15 to enable a scheme to resolve the flooding issue to be implemented. A bid for improvements to the footpath had 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 was available in 2015/16.

 

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

 

S106 Funded Schemes -  An increase of £346K in 2014/15 and £350K in 2015/16 was 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.

Renewal Area - A carry forward of £496K from the 2014/15 Capital Programme to 2015/16 was 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 had now been tendered, Phase 2 of the scheme was currently out to tender and phases 3 and 4 would be tendered by January. The following amounts would 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.

 

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

 

Director of Resources

 

Space Project - A carry forward of £1.178M to the 2015/16 Capital Programme was 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

 

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 met the criteria:-

  • Ysgol Dewi Sant - Budget amendment had 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 had 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 was likely to be a variance in the WHQS expenditure as the extent of the works required in a property was not known until the works commenced. Less had been spent than was projected for Rewire schemes, Kitchen Replacements, Bathroom works and schemes in Non Traditional Properties. More had been spent than was projected for Central Heating works and General Improvement schemes, the total budget was unaffected. The allocation of the WHQS budget would be reviewed as part of the forthcoming Housing Business Plan. 
  • Local Road Network Improvements - As noted in the previous monitoring this scheme had been subject to delay this financial year however a further £791K had been spent in October 2014 which would bring expenditure in line with budget profile. 
  • Disabled Facilities Grants - As detailed in previous monitoring there was a variance between profiled budget and actual because the profiled budget had been based on historical patterns of spend. Changes made to processes within the service for 2014/15 had led to a more consistent pattern of approvals and spend throughout the financial year. This budget would be monitored closely to ensure that overall expenditure remained within the available funding.

2015/16 to 2019/20 Capital Programme

 

The Welsh Government (WG) announced the provisional 2015/16 General Capital Funding, on 8 October, 2014. The 2015/16 capital settlement represented a £62K decrease on the 2014/15 Final Settlement which equated to a 1% cut. There was 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 had been reflected in the proposed Capital Programme 2015/16 to 2019/20 which was shown in the table in Appendix B attached to the report.

 

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.

 

The Major Repairs Allowance (MRA),  was the grant that provided capital funding to the Housing Revenue Account (HRA), for 2015/16 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 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 was £2.76M and this figure would be reflected in the Housing Business Plan when it was brought to Cabinet in December 2014; the revised figure would then be reflected in the Final Capital Programme in February 2015.

 

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

 

The table below detailed the General Capital Funding and internal resources required to fund the proposed schemes which were detailed in Appendix B as attached to the report.

 

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

 

The indicative 2015/16 Capital Programme shown in Appendix B included allocations already approved by Council. Appendix B also reflected the amendments requested within the report.

 

Capital Bids 2015/16 to 2019/20

 

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 would not be contractually committed at the end of 2014/15;

  • Ashpath Footpath Improvements - There had been delays on implementation of the full scheme due to land issues. In 2014/15, it was proposed that a scheme intended to resolve the flooding issues  that would cost £28K was implemented. The bid for improvement to the footpath had been resubmitted as part of the Initial Capital Programme for 2015/16 and in addition to the £72K carried forward it was requested that an additional £28k was made available for footpath widening, improved security and improvements to the cycle path. This increased cost would be funded by an additional contribution from Capital Receipts. 
  • Penarth Esplanade Feasibility - The purpose of the scheme was 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 had not been feasible in 2014/15. It was requested that £50K funding was carried forward from 2014/15 to 2015/16 and a further £50K was carried forward from 2015/16 to 2016/17.

School Investment Programme

 

The 21st Century Schools Programme was 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 ran between 2013/14 and 2018/19. Band B schemes were expected to commence in 2019/20.

 

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

 

In April 2014, WG notified the Council that some of the funding for Band A of the 21st Century Schools Programme would be in the form of unsupported borrowing instead of a revenue grant.  The Council would be expected to borrow; however, WG would provide revenue funding to cover the cost of the loan.  In 2014/15 this would be via a specific grant and from 2015/16 the funding would be distributed through the Revenue Support Grant.  This had no impact on the value of the Capital Programme, only the way in which it was funded. The table below showed 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

 

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 represented 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.

 

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

 

Band B Funding under the 21st Century Schools Programme was due to start in 2019/20.  The analysis assumed the Council schemes would not commence until 2020/21 as the schemes were not yet approved. The Council would need to consider what schemes were likely to be included in the Band B School Investment Programme to address growing pressures within Vale of Glamorgan schools. These pressures included but were 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.

The projected cost of schemes under Band B was £38M, which it was assumed would 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.

 

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

 

Housing Improvement Plan

 

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

 

The capital funded from revenue (CERA) for the current Housing Improvement Plan was £4.141M, an increase of £933K on the £3.208M currently reflected in the Capital Programme. The 2015/16 Capital Programme had 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

 

The next stage was for the estimate to be submitted to Scrutiny Committees 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 16 December, 2014.

 

Each Scrutiny Committee would be asked to first consider the initial Capital Programme proposals as shown in Appendix B attached to the report.  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 Budget Working Group (BWG) 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 23 February, 2015. 

 

Cabinet’s Final Capital Programme proposals would be considered by Council on 4 March, 2015.

 

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

 

This was a matter for Executive and Council decision

 

RESOLVED –

 

(1)       ....................

 

(2)       ....................

 

(3)       ....................

 

(4)       ....................

 

(5)       T H A T the use of the  Council's Urgent Decision procedure, in accordance with Article 13.09 of the Council's Constitution, be implemented  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)       T H A T the use of the Council's Urgent Decision procedure, in accordance with Article 13.09 of the Council's Constitution, be implemented in respect of resolution 5 above be reported to Council.

 

(7)       T H A T 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).      T H A T 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 be referred to Council for approval.

 

Reasons for decisions

 

(1)       ....................

 

(2)       ....................

 

(3)       ....................

 

(4)       ....................

 

(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.

 

 

[View Cabinet report]

 

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