The Acting Director of Finance introduced the
report and stated that an updated version of the paper had been
provided to Members, which amended the second paragraph on the
first page of the report. He read the updated paragraph
The total cost of the draft Capital Programme in 2023/24 is currently projected to be £62.158m, broken down as £37.043m relating to the General Fund and £25.115m relating to the HRA. The HRA capital programme is part funded by borrowing, grants and reserves and the associated revenue costs are managed from within the HRA budget envelope. The General Fund projects require prudential borrowing of £19.859m and the associated revenue impacts are also budgeted.
The Acting Director of Finance explained that the capital programme was currently under review, and the report presented a holding position which was supported by the S114 notice. He stated that the team were currently assessing whether spend on capital programmes should occur, but the Council would not break contractual agreements whilst considering new spend and borrowing. He explained that projects utilising third party funding had more flexibility, for example the school capital programme was grant funded and therefore did not present a wider risk to the Council. He added that a wider piece of work to review the programme and manage spending and borrowing was taking place, and this included removing or reassessing capital programmes. The Acting Director of Finance confirmed that some capital programme projects, such as the Grays underpass and Stanford-le-Hope Interchange, were currently on hold given the current financial context, and these would be reassessed considering the necessity, inflation, and construction costs. He explained that the capital programme would continue to evolve, and more clarity would be presented to Members in further reports. He added that officers were working to increase the transparency of the Capital Programme report and were working on introducing a mechanism for Member feedback.
The Chair highlighted 5.2 of the report and asked how S106 agreements could be used for ‘spend to save’ projects. The Acting Director of Finance explained that some projects, such as new streetlighting, could save the Council money after an initial outlay, for example by using more energy efficient bulbs or having more control over when streetlighting came on and switched off. He stated that grant-funded projects could continue, but all ‘spend to save’ projects would be challenged through Directorate Management Team meetings, the corporate transformation team, and Cabinet. Councillor Kent highlighted appendix two of the report and questioned the proposed river development project. He also questioned why Investment Portfolio ‘spend to save’ project funding increased dramatically between 2023/24 and 2024/25. The Acting Director of Finance replied that he did not have the detail of these projects, and would respond outside of the meeting.
Councillor Kent summarised and felt pleased that the Treasury Management and Capital Programme report had been separated, as this made it easier to understand for Members and residents.
RESOLVED: That the Committee:
1. Noted the charges to the capital programme as set out in this report and associated appendices.
2. Noted the impact of new Prudential Borrowing on the debt levels of the Council as set out in Appendix 1.
3. Noted the programme will be subject to a further review as set out in the report and following the issue of a Section 114 notice.
4. Noted the projected revenue impact of the MRP costs as set out in Section 5.2.
5. Commented on the proposed delegation to Cabinet to approve additions to the programme based on the criteria set out in section 5.2.