Top

Top

Agenda Item No. 7

 

The Vale of Glamorgan Council

 

Scrutiny Committee (Social Care and Health): 1st December 2014

 

Report of the Director of Social Services

 

Initial Capital Programme Proposals 2015/16

 

Purpose of the Report

1.         To provide an update on the progress of the Capital Programme for 2014/15 and to submit for consultation the initial capital proposals for 2015/16.

Recommendations

It is recommended:-

1.         That the position with regard to the 2014/15 Capital Programme be noted.

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

Reasons for the Recommendations

1.         To ensure that Members are aware of the position with regards the 2014/15 Capital Programme, relevant to this Scrutiny Committee.

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

Relevant Issues and Options

2014/15 Capital Programme

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

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

2015/16 to 2019/20 Capital Programme

4.         The Welsh Government (WG) announced the provisional 2015/16 General Capital Funding, on 8th October 2014. The 2015/16 capital settlement represents a £62k decrease on the 2014/15 Final Settlement which equates to a 1% cut.  There is no indication of the level of funding likely beyond 2015/16 therefore in line with the approach adopted in the Medium Term Financial Plan the proposals assume a reduction of 10% for each year of the programme from 2016/17.  This has been reflected in the proposed Capital Programme 2015/16 to 2019/20. Proposed schemes for this Committee are shown 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.         In addition to external funding, the Council will finance part of the Capital Programme from its own resources, e.g. capital receipts and reserves.  

The table below details the General Capital Funding and internal resources required to fund the proposed schemes for the Council as a whole.

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

 

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

Capital Bids 2015/16 to 2019/20

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

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

 

Possible Impact or Magnitude of Risk

 

Catastrophic

 

MEDIUM

 

MEDIUM/HIGH

 

HIGH

 

VERY HIGH

 

High

 

MEDIUM/LOW

 

MEDIUM

 

MEDIUM/HIGH

 

HIGH

 

Medium

 

 LOW

 

MEDIUM

 

MEDIUM

 

MEDIUM/HIGH

 

Low

 

VERY LOW

 

 LOW

 

MEDIUM/LOW

 

MEDIUM

Risk Matrix

Very Unlikely

Possible

Probable

Almost Certain

Likelihood/Probability of Risk Occurring

 

10.      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

 

 

 

 

 

 

 

 

 

 

 

 

11.      Only those schemes assessed as corporate priority 1 or higher and medium risk or higher are included in these proposals.

12.      In addition to bids meeting the criteria for inclusion in the Capital Programme, there have been a number of changes approved by Cabinet since the final budget proposals 2014/15 to 2018/19 in February 2014 that have an impact on the Capital Programme.

Next Steps

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

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

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

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

Resource Implications (Financial and Employment)

17.      The total net capital expenditure of the proposed programme for the Council as a whole over the 5 years is approximately £96.144m.

18.      If all proposed for the Council as a whole are approved, the effect on General Fund useable capital receipts will be as shown in the following table. 

Capital Receipts

General

Ringfenced Social Services

Ringfenced Education

 

    £000's

           £000's

           £000's

Anticipated Balance as at 1st April 2015

8,233

1,225

0

 

 

 

 

Anticipated Requirements – 2015/16

(1,660)

0

(600)

Anticipated Receipts – 2015/16

0

0

1,285

Balance as at 31st March 2016

 6,573

1,225

685

 

 

 

 

Anticipated Requirements – 2016/17

(5,525)

0

(1,684)

Anticipated Receipts – 2016/17

0

0

2,500

Balance as at 31st March 2017

1,048

1,225

1,501

 

 

 

 

Anticipated Requirements – 2017/18

0

(1,225)

(800)

Anticipated Receipts – 2017/18

0

0

2,500

Balance as at 31st March 2018

1,048

0

3,201

 

 

 

 

Anticipated Requirements – 2018/19

0

0

0

Anticipated Receipts – 2018/19

0

0

0

Balance as at 31st March 2019

1,048

0

3,201

 

 

 

 

Anticipated Requirements – 2019/20

0

0

0

Anticipated Receipts – 2019/20

0

0

2,800

Balance as at 31st March 2020

1,048

0

6,001

 

 

 

 

Anticipated Requirements between 2020/21 and 2025/26

0

0

(6,001)

Anticipated Receipts between 2020/21 and 2025/26

0

0

0

Balance as at 31st March 2026

1,048

0

0

 

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

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

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

Project Fund

             £'000

Anticipated Balance as at 1st April 2015

4,244

 

 

Anticipated Requirements – 2015/16

(1,684)

Anticipated Receipts – 2015/16

100

Balance as at 31st March 2016

2,660

 

 

Anticipated Requirements – 2016/17

(400)

Anticipated Receipts – 2016/17

60

Balance as at 31st March 2017

2,320

 

 

Anticipated Requirements – 2017/18

(100)

Anticipated Receipts – 2017/18

60

Balance as at 31st March 2018

2,280

 

 

Anticipated Requirements – 2018/19

0

Anticipated Receipts – 2018/19

0

Balance as at 31st March 2019

2,280

 

 

Anticipated Requirements – 2019/20

0

Anticipated Receipts – 2019/20

0

Balance as at 31st March 2020

2,280

 

22.      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

23.      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.

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

Legal Implications (to Include Human Rights Implications)

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

Crime and Disorder Implications

26.      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)

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

Corporate/Service Objectives

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

Policy Framework and Budget

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

Consultation (including Ward Member Consultation)

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

Relevant Scrutiny Committee

31.      Corporate Resources

Background Papers

Bids received from departments

Correspondence received from the Welsh Government

 

Contact Officer

Gemma Jones, Principal Accountant

 

Officers Consulted

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

Corporate Management Team

 

Responsible Officer:

Phil Evans

Director of Social Services

 

Share on facebook Like us on Facebook