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Agenda item

Capital Programme Monitoring 2020/21

Summary:

 

To inform Cabinetof the progressto date on the schemesin the approvedCapital Programme,and toreport thelatest positionon capital resources.

 

Recommendations:

 

1.  That Cabinet notesthe progressmade todate onthe 2020/21 Programme;

 

2.  That the current position on the Capital Prudential Indicators, as shown in Appendix C to the report, benoted;

 

3.  That Cabinet approvesthe virementsbetween housingrevenue account budgets,as detailedin thereport andin AppendixA; and

 

4.  That Cabinet approves the virement of £900,000 from the

Leisure and Open Spaces budget, to the Acacia Project budget.

 

 

 

Minutes:

The Strategic Director (Internal Services) introduced a report which detailed the progress to date on the schemes in the approved Capital Programme for 2020/21along with the latest position on capital resources.

 

The Cabinet noted that there had been considerable discussion at the Cabinet Advisory Panel(CAP) about the reported £900,000 overspend on the Acacia Budget and the clarification provided by the Head of Finance on the reasons for the overspend and the proposed virement from the Leisure and Open Spaces budget.

 

The Chairman said that whilst the value of the overspend might be significant it was important to look at the detail behind the overspend. He noted that a Member of the CAP had also asked whether there had been any contingency built into the original budget and implied that this had been insufficient and possibly should have been higher. He confirmed that there would have been an element of contingency in the budget but that it was important not to pitch this at an unrealistically high level as this would result in distorted capital budgets that would reduce the number of projects that the Council could undertake at any time, encourage contractors to submit inflated tenders and result in the reporting of large eventual underspends, which were undesirable. Contingencies had to be set at sensible levels across the range of all Council projects. He pointed to the factors behind the Acacia overspend including the considerable impact of COVID, which had resulted in work having to cease temporarily whilst plant, site security and other costs had continued to accrue. There were also some works that had already been carried out that needed to be redone once work restarted and other unanticipated works had been encountered once groundwork had begun. It was not uncommon for unanticipated, and sometimes costly, works to emerge during complex capital projects and this had been the case.  Fortunately the Council had considerable headroom from underspends on other budgets, including the budget for Leisure and Open Spaces where it would not be possible to carry out originally projected works during the current financial year due to COVID and the staff required not being in place. He confirmed that the virement applied only for the current financial year, that the Leisure and Open Spaces budget for the next financial year was not affected and that no other projects had been cancelled or postponed as a result of the virement. Whilst it was legitimate for overspends to be questioned it was important to look at the reasons behind them and he was proud of the fact that the Council addressed this honestly and transparently.

 

The Cabinet Portfolio Holder for Finance supported the Chairman’s comments and the methodology underpinning the Council’s capital budgeting and the setting of the level of contingency in public sector budgets.     

 

            RESOLVED:

 

1.    That Cabinet notes the progress made to date on the 2020/21 Capital Programme;

 

2.    That the current position on the Capital Prudential Indicators, as shown in Appendix C to the report, be noted;

 

3.    That Cabinet approves the virements between housing revenue account budgets, as detailed in the report and in Appendix A to the report; and

 

4.    That Cabinet approves the virement of £900,000 from the Leisure and Open Spaces budget, to the Acacia Project budget

Supporting documents: