Agenda item

As detailed in the recommendations with the following two resolutions:

(e)       That Cabinet welcome Corporate Resources Overview and Scrutiny Committees request for a report on the consequential revenue impacts of capital expenditure; and

(f)        That Cabinet agrees to approach Welsh Government for assistance with any costs arising from:

            (i)         Remedial works to the Flintshire Bridge;

            (ii)        Early sharing of responsibility in advance of any changes arising

                        From the “Red Route”; and

(iii)       Increased wear and tear on Flintshire roads as a result of traffic diverted due to the works on the A55

The Chief Officer (Organisational Change) introduced the Development of 2018/19 – 2020/21 Capital Programme report.

                        The Finance Manager explained that the report built on the Capital Strategy and Asset Management Plan adopted in February 2016 and split the Council Fund Capital Programme into three sections:

1.    Statutory/Regulatory – allocations to cover regulatory and statutory works – examples included providing support to improve and adapt private sector homes (Disabled Facilities Grants), adaptations to schools for children with disabilities, any works required to keep buildings open by Health and Safety requirements;

2.    Retained Assets – allocations to fund infrastructure works necessary to ensure service and business continuity.  Allocations to fund schemes that maintained, enhanced and improved retained assets and infrastructure to deliver services.  Significant needs identified by service plans/condition surveys; and

3.    Investment – to fund costs incurred when remodelling and investing in services.  New schemes arising from Portfolio business plans, the Council Plan, other relevant and emerging plans, and other strategies or emerging Council priorities approved through a selection process based on the provision of a sound business case.

Tables 1 and 2 in the report showed schemes approved by Council in February 2017 for the 2017/18 – 2019/20 Capital Programme and how those schemes were being funded.  When the programme was set there was an overall shortfall in funding of £3.187m although schemes for 2017/18 were fully funded.  The shortfall in funding of schemes in 2018/19 and 2019/20 was kept flexible with options including a combination of future capital receipts, alternative grants, prudential borrowing or scheme phasing over several years.  Progress on addressing that shortfall had been regularly reported to Cabinet and Corporate Resources Overview and Scrutiny Committee during 2017/18.  Capital receipts had now been received which resulted in the programme approved for 2017/18 – 2019/20 being fully funded with a small surplus of £0.201m. 

            Table 3 of the report detailed the general capital funding projected to be available to fund the Capital Programme over the next 3 years.  The Council had developed a prudent policy of only allowing capital receipts to fund capital projects when receipts were actually received.  All of the schemes proposed for inclusion invested in assets and / or reconfigured models of service provision.  The majority of the programme could be funded from capital receipts and WG funding allocations, although there was an overall shortfall which could require funding by borrowing which had revenue implications.  Schemes had therefore been phased over the 3 year period to ensure 2018/19 financial year was fully funded. 

            Table 4 showed the proposed allocations for the period 2018/19 – 2020/21 for the Statutory / Regulatory Retained Assets of the Capital Programme.  Table 5 showed the proposed schemes for the same period for the Investment Section. 

            There was an overall shortfall in projected funding of £8.216m. To meet that shortfall the Council would potentially need to borrow to fund the schemes which had the impact of increasing debt financing costs of interest and revenue provision for repayment of debt in the revenue budget.  There was potential for capital receipts to be generated during the remainder of 2017/18 with a current projection for a further £0.772m to be received by the end of 2017/18, and a further £0.600m however this risked slipping into 2018/19.

            Future capital schemes were outlined as 21^st Century School Building Programme Band B, the Growth Deal Bid and the Digital Strategy.

            The proposed Capital Programme had been submitted to Corporate Resources Overview and Scrutiny Committee on 15^th February 2018 and a copy of the questions, comments and responses was circulated to Cabinet Members.  At Corporate Resources Overview and Scrutiny Committee it was resolved to inform the Cabinet of the following:

(i)         That a report had been requested which outlined the effect of capital expenditure (new schemes for approval) and detailing the effects on the revenue account, including cost of borrowing, operational revenue costs and operational benefits, for the meeting in March or April;

(ii)        That there were concerns about the cost of any remedial works required as a result of the inspection of the Flintshire Bridge.  Early negotiations with WG on shared responsibility for costs, in advance of any changes arising from the Red Route implementation were welcomed.  The results of the inspection to be reported to Environment Overview and Scrutiny Committee and if affecting the capital programme, to Corporate Resources Overview and Scrutiny Committee as well; and

(iii)       That the Committee invited the Cabinet to consider making representations to WG about the wear and tear to Flintshire roads being used as diverted routes as a result of work on the A55.

Councillor Shotton concluded that in a time when revenue budgets were under significant pressure, the capital programme provided hope for communities with the proposed schemes, including the building of new council houses.   He commented on the welcome investments in Castell Alun High School and Glan Aber Primary School and at Marleyfield Residential Home.  He also thanked Councillor Carolyn Thomas for her part in national lobbying which resulted in an additional £1.4m for highways and roads from Welsh Government.

            RESOLVED:

(a)       That the allocations and schemes in Table 4 of the report for the Statutory/Regulatory and Retained Assets sections of the Council Fund Capital Programme 2018/19 – 2020/21 be approved;

(b)       That the schemes in Table 5 of the report for the Investment section of the Council Fund Capital Programme 2018/19 – 2020/21 be approved;

(c)        That it be noted that the shortfall in funding of schemes in 2019/20 and 2020/21 at this point in the approval process is flexible.  Options including a combination of future capital receipts, alternative grants (if available), prudential borrowing or the re-phasing of schemes will be considered during 2018/19, and included in future capital programme reports;

(d)       That further development and a refresh of a forward Capital Strategy and Asset Management Plan be noted;

(e)       That Cabinet welcome Corporate Resources Overview and Scrutiny Committees request for a report on the consequential revenue impacts of capital expenditure; and

(f)        That Cabinet agrees to approach Welsh Government for assistance with any costs arising from:

            (i)         Remedial works to the Flintshire Bridge;

            (ii)        Early sharing of responsibility in advance of any changes arising

                        from the “Red Route”; and

(iii)       Increased wear and tear on Flintshire roads as a result of traffic diverted due to the works on the A55.