Agenda item

2021/22 Capital Budget Monitoring Report for the Period Ending 30 September 2021

Meeting of District Executive, Thursday 2nd December 2021 9.30 am (Item 105.)

Decision:

RESOLVED:	That District Executive recommends that Full Council agree to:-
	a.	the revised Capital Estimates for the financial year 2021/22 of £41.703m (as described in paragraphs 13 to 18 and as shown in detail in Appendix A).
	b.	ask officers to review the projects proposed to be removed from the capital programme as listed in Table Two prior to Full Council
	c.	the removal of the unspent Commercial Investment budget from the capital programme (of £8.643m) and the cessation of investment purely for yield capital expenditure from December 2021 (as described in paragraphs 32 to 41).
	d.	increase the capital programme by £482k to fund capital works on the Council’s Commercial Property Portfolio as described in paragraph 16.
	e.	revised capital funding plans as described in paragraphs 24 to 30 including the approval to use £20.2m of corporate Council earmarked reserves to fund expenditure in this financial year as follows: i. The allocation of £2m of the Useable Capital Receipts earmarked reserve to the Octagon Theatre Project to fund estimated expenditure for this and next financial year. ii. The use of the remaining amount currently in the Useable Capital Receipts earmarked reserve, of £16m, to fund the revised 2021/22 capital programme. iii. The use of the Capital Fund earmarked reserve of £1.167m to fund the revised 2021/22 capital programme. iv. The use of the Commercial Investment Risk Reserve of £482k to fund capital works required on the Council’s commercial property portfolio in 2021/22. v. The use of the Cremator Replacement Capital Reserve of £549k to part fund the Yeovil Crematorium Project in 2021/22.
Reason:	To inform Members of the forecast capital spend for the year 2021/22 and to seek approval from Council for Revised Capital Estimates for 2021/22 along with revised capital funding plans including the approval to use Council earmarked reserves to fund expenditure in this financial year.

Minutes:

The Portfolio Holder for Finance and Legal Services noted that since the last quarterly monitoring report, the Senior Leadership Team had reviewed the capital programme and the capital reserves had been rationalised for transparency. It was also planned to use existing reserves to fund the existing capital budget within that year which would reduce the need for external borrowing which would save on borrowing costs in the revenue budget of over £284,000. There were also a number of assumptions including the decarbonisation budget of £2.8m which was assumed to be delivered within the grant period but this may be extended and SSDC may fund elements which fell outside the criteria. The projects proposed to be removed from the capital programme were unlikely to be delivered for either external reasons, capacity issues or were no longer a priority for the Council in the Council Plan. He concluded that the Council had a large and active capital programme which had provided revenue income but due to changes to the CIPFA code it was proposed to cease borrowing to invest for revenue gain. He proposed that the recommendations be agreed by Council.

In response to questions from Members, the Portfolio Holder and Chief Finance Officer advised:

· The projects proposed to be removed from the capital programme were either unlikely to complete, due to a lack of officer capacity, or were not now a priority due to Local Government Reorganisation.

· The mortgage rescue contingency had not been used for a number of years and the gypsy and traveller acquisition fund was an officer capacity issue in the remaining 16 months of the Council, but it was likely to be picked up by the new Unitary Authority.

· The new car parks proposed to be removed from the capital programme would be clarified in the report to Council.

During discussion Members expressed their dismay at the proposed projects to be removed from the Capital programme and it was suggested that contractors could be brought in to deliver the projects. It was noted that the PV panels and LED bulbs proposed to be removed from the capital programme could be included as part of the decarbonisation grant scheme.

The Director for Service Delivery advised that more staff were being drawn into the Local Government Review work and did not have the capacity to deliver all of the proposed schemes.

The Deputy Chairman of the Scrutiny Committee confirmed that most of their questions were answered at the meeting or they had now been raised by the Executive.

The Chief Executive suggested that officers review the proposed schemes for removal from the capital programme at table two of the report and provide further clarity to Portfolio Holders prior to the Full Council meeting.

It was proposed to amend recommendation B toask officers to review the projects proposed to be removed from the capital programme as listed in Table Two prior to Full Council, and this was seconded. A named vote was taken and the recommendations were unanimously agreed by Members to be proposed to Council.

RESOLVED:	That District Executive recommends that Full Council agree to:-
	a.	the revised Capital Estimates for the financial year 2021/22 of £41.703m (as described in paragraphs 13 to 18 and as shown in detail in Appendix A).
	b.	ask officers to review the projects proposed to be removed from the capital programme as listed in Table Two prior to Full Council
	c.	the removal of the unspent Commercial Investment budget from the capital programme (of £8.643m) and the cessation of investment purely for yield capital expenditure from December 2021 (as described in paragraphs 32 to 41).
	d.	increase the capital programme by £482k to fund capital works on the Council’s Commercial Property Portfolio as described in paragraph 16.
	e.	revised capital funding plans as described in paragraphs 24 to 30 including the approval to use £20.2m of corporate Council earmarked reserves to fund expenditure in this financial year as follows: i. The allocation of £2m of the Useable Capital Receipts earmarked reserve to the Octagon Theatre Project to fund estimated expenditure for this and next financial year. ii. The use of the remaining amount currently in the Useable Capital Receipts earmarked reserve, of £16m, to fund the revised 2021/22 capital programme. iii. The use of the Capital Fund earmarked reserve of £1.167m to fund the revised 2021/22 capital programme. iv. The use of the Commercial Investment Risk Reserve of £482k to fund capital works required on the Council’s commercial property portfolio in 2021/22. v. The use of the Cremator Replacement Capital Reserve of £549k to part fund the Yeovil Crematorium Project in 2021/22.
Reason:	To inform Members of the forecast capital spend for the year 2021/22 and to seek approval from Council for Revised Capital Estimates for 2021/22 along with revised capital funding plans including the approval to use Council earmarked reserves to fund expenditure in this financial year.

Supporting documents:

Agenda item

2021/22 Capital Budget Monitoring Report for the Period Ending 30 September 2021

Council and Democracy