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Agenda Item No

 

The Vale of Glamorgan Council

 

Scrutiny Committee (Lifelong Learning): 5th December 2011

 

Report of the Director of Learning and Development

 

Initial Capital Programme Proposals 2012/13

 

Purpose of the Report

1.             To advise Scrutiny of the progress on the Capital Programme for 2011/12 for the period to 30th September 2011 and to submit for consultation the initial capital proposals for 2012/13.

Recommendations

1.             That the position with regard to the Authority’s 2011/12 Capital Programme be noted.

2.             That Scrutiny Committee consider the initial budget proposals and forward its comments to Corporate Resources Scrutiny Committee and Cabinet.

Reasons for the Recommendations

1.             That Members are aware of the position with regards the 2011/12 Capital Programme, relevant to this Scrutiny Committee.

2.             To allow full consultation on the future Capital Programmes.

Relevant Issues and Options

2.             Appendix A details financial progress on the Capital Programme as at 30th September 2011.  

2012/13 Capital Programme

3.             The Welsh Government announced the provisional 2012/13 General Capital Funding, on 18th November 2011. The 2012/13 capital settlement represents a 6.8% cut in funding over last year's allocation. This has been reflected in the table on Appendix B. In addition, the forecast cut for 2013/14 is a further 11.5%. This figure has also been used in Appendix B, year on year to 2016/17.

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

5.             Appendix B outlines the proposed 2012/13 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 2012/13 Capital Programme

GENERAL FUND                                                                £’000      £’000

Welsh Assembly Government Resources     

Supported Borrowing                                                          3,589

General Capital Grant                                                          2,090

                                                                                                                   5,679

Council Resources

Capital Receipts                                                                  1,021

Reserves/Leasing                                                               3,842

                                                                                                                    4,863           

Net Capital Resources                                                                              10,542                       

 

 

6.             The indicative 2012/13 Capital Programme shown in Appendix B includes allocations already approved by Council.

Capital Bids 2012/13

7.             As with last year, due to additional anticipated reductions in future capital funding, and in order to review historic priorities, all those budgets previously included in the indicative future Capital Programme have been withdrawn, other than those schemes which will be committed by the end of March 2012. Officers were asked to re-bid for those sums that they still regarded a high priority as part of the 2012/13 bidding round. As a consequence of this, it was noted that the number of bids submitted was far below previous years.

8.             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

9.             Sustainability checklists will be requested from Project Managers for each of the proposed bids on 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 included in the Final Capital Proposals report in February 2012. 

10.        The Budget Working Group has prioritised bids based upon the recommendations of the Corporate Asset Management Group (CAMG). The method of prioritisation used is shown below.

 

A

 

Health and Safety Legislation

B

 

Other Legislation / Statutory requirement

Ci

 

Economic Sense

Cii

 

Corporate Plan

Ciii

 

Sufficiency

D

 

Condition / Suitability

E

 

Welsh Government objectives

F

 

Low Priority

           

11.        Included in Appendix B is the sum of £2.402m for the second phase of the Barry Welsh Medium Schools accommodation at Ysgol Nant Talwg. Phase 2 Llantwit Major Welsh Medium proposals are currently being reviewed and are not included in Appendix B in this report.

12.        In addition to the capital bids included in Appendix B, Appendix C lists capital bids received that were unsuccessful and have not been put forward for inclusion in the 2012/13 programme. 

Next Steps

13.        The next stage is for the estimates to be submitted to Scrutiny Committee 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 20th December 2011. It is also proposed to consult with the LSB.

14.        Each Scrutiny Committee will be asked to first consider the indicative capital 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 Cabinet Budget Working Group draw up the final proposals.

15.        As well as considering the priority awarded to capital bids within its own services, the Corporate Resources Scrutiny Committee will be asked to look at the priority for bids across the whole range of Council services.

16.        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 29th February 2012.

17.        Cabinet’s final Capital Programme proposals will be considered by Council no later than 7 March 2012.

Resource Implications (Financial and Employment and Climate Change, if appropriate)

18.        The total net capital expenditure of the proposed programme for the whole Council over the 5 years is £105 million.  For services within this Scrutiny Committee's remit, the proposed programme is included at Appendix B.

19.        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.

General Fund Capital Receipts

             £'000

Anticipated Balance as at 1st April 2012

9,638

 

Anticipated Requirements – 2012/13

(1,021)

Anticipated Receipts – 2012/13

439

Balance as at 31st March 2013

9,056

 

Anticipated Requirements – 2013/14

(4,506)

Anticipated Receipts – 2013/14

170

Balance as at 31st March 2014

4,720

 

Anticipated Requirements – 2014/15

(597)

Anticipated Receipts – 2014/15

0

Balance as at 31st March 2015

4,123

 

Anticipated Requirements – 2015/16

(1,074)

Anticipated Receipts – 2015/16

448

Balance as at 31st March 2016

3,497

 

Anticipated Requirements – 2016/17

(52)

Anticipated Receipts – 2016/17

438

Balance as at 31st March 2017

3,883

 

20.        A Project Fund exists to finance capital and revenue projects.  The aim of the Fund is to initially finance a project with repayment of such advances (including interest) being credited back to the Fund.  The following table shows the projected position of the fund. 

Project Fund Balance

             £'000

Anticipated Balance as at 1st April 2012

4,299

 

Anticipated Requirements – 2012/13

       (450)

Anticipated Receipts – 2012/13

     124

 

Balance as at 31st March 2013

 3,973

 

Anticipated Requirements – 2013/14

        0

Anticipated Receipts – 2013/14

      70

 

Balance as at 31st March 2014

 4,043

 

Anticipated Requirements – 2014/15

        (1,200)

Anticipated Receipts – 2014/15

      70

 

Balance as at 31st March 2015

2,913

 

Anticipated Requirements – 2015/16

0

Anticipated Receipts – 2015/16

70

 

Balance as at 31st March 2016

2,983

Anticipated Requirements – 2016/17

0

Anticipated Receipts – 2016/17

30

 

Balance as at 31st March 2017

 3,013

 

21.        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.

Legal Implications (to Include Human Rights Implications)

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

Crime and Disorder Implications

23.        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)

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

Corporate/Service Objectives

25.        Contributes to the corporate priority of Corporate Resources by the provision of sound financial management.

Policy Framework and Budget

26.        This report follows the procedure laid down in the constitution for the making of the budget.  The 2012/13 budget proposals will require the approval of Council. 

Consultation (including Ward Member Consultation)

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

Relevant Scrutiny Committee

28.        Corporate Resources

Background Papers

Bids received from departments

Correspondence received from the Welsh Government

 

Contact Officer

Laura Davis Tel. No. 01446 709249

 

Officers Consulted

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

Management Team

 

Responsible Officer:

Sian Davies, Director of Finance, ICT and Property

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