Agenda item

            The Committee was reminded that the Council invested through its Capital Programme, significant sums of money to improve service provision and its stock of assets.  The scale and content of the Capital Programme was inextricably linked to the Revenue Budget and issues of affordability, financial prudence and sustainability.  It was therefore important that there was a clear link between the Programme and the Council’s strategic objectives for the City and an alignment with the budgeting process.  This would support an integrated system of financial planning and resource allocation.

            A series of Party Grouping briefings had been held during April in order to update the Members on the current status of the Capital Programme and to provide information on the range of projects which were currently included or proposed, with a view to seeking the direction of the Members on how the Capital Programme could be rationalised and brought within affordability limits.  At those briefings, the Members had accepted that a number of Capital projects had reached a certain stage of development and commitment and could be proceeded further.  However, the Members had indicated also that there was now an opportunity to take affirmative steps to rationalise the Capital Programme in terms of need, affordability and the Council’s capacity to deliver.

            To date those schemes included in the Capital Programme had emerged and/or had been proposed by Standing Committees or officers with a limited challenge put forward in terms of priorities, finance, level of need and the capacity to deliver.  Consequently, it was unlikely that the levels of investment contained currently within the Capital Programme were achievable within the Council’s financial constraints, were not adequately justified and would be difficult to align with the corporate priorities.  The overall capital expenditure, if the Council were to implement the 150 projects proposed currently for the period 2008-2013, would be £122.5 million, most of which would need to be funded via rate-financed loans.  In order to align the Capital Programme to both the corporate priorities and affordability, it was recommended that the following approach be adopted:

            1.  Capital Programme 2008-2009

            For the period 2008-2009, all the projects underway and/or committed to (numbers 1 – 57 as set out in Appendix 1) be progressed.  These projects had either commenced or had reached a point where they would be difficult contractually to stop and would result in abortive expenditure.  While these projects equated to £26.73 million capital expenditure, £5.375 million of that amount had been allocated as part of the North Foreshore Closure Plan.  Furthermore, the £2.235 million included for the rolling replacement vehicle programme had been budgeted for within the Revenue Estimates.  Therefore, the estimated total net capital spend for 2008-2009 would be £19.5 million.

            2.  Capital Programme 2009-2010 Onwards

            The remainder of the projects proposed, estimated to be in excess of £80 million, be put through the revised Capital Programme prioritisation “Gateway” process.  This process would involve:

·         Initial agreement and prioritisation of projects by the Strategic Policy and Resources Committee;

·         consideration of potential new projects as they emerged by means of a project proposal form and if deemed appropriate, and if they were in line with Service Business Plans, need and affordability, their recommendation for potential inclusion in the Capital Programme, subject to the approval of the Strategic Policy and Resources Committee;

·         the presentation on a 4-monthly basis of a Capital Programme update advising on the current status of existing projects and indicating any new proposals and their financial impact, along with the project proposal details;

·         if confirmed for potential inclusion by the Committee as being in line with the Corporate Plan, Strategic Objects and Priorities, the undertaking of an appraisal, proportional to the scale of the project to provide challenge and verification of the need, scope, finance and alignment with the Asset Strategy;

·         the submission to the Strategic Policy and Resources Committee of the appraisal result for consideration as to whether or not to formally include the project in the Capital Programme and for prioritisation against existing projects.  This might require deferral of certain projects;

·         the taking of further decisions relating to the project by the Strategic Policy and Resources Committee, although the service Committee would be advised regularly of the project status; and

·         the confirmation by the Strategic Policy and Resources Committee of any variations requested by the service Committee or Department.

            The Committee noted that, following the recent revision of the Council’s Standing Orders, the Strategic Policy and Resources Committee had been given full responsibility for the Capital Budget and was required to play a central role in challenging, improving and prioritising Capital projects.

            To take forward the committed Capital projects there would be a net capital cost to the Council of £19.5 million, £15 million of which had been allocated for net capital expenditure within the Council’s Estimates for the period 2008-2009.  The shortfall might have to be dealt with through re-profiling, which would impact on future projects and programmes.

            After discussion, the Committee agreed that:

(i)      the practically complete projects, numbers 1-22, and the committed projects, numbers 23 to 57 as set out above, be progressed;

(ii)     the Mary Peters Track, the Blanchflower Playing Fields projects be included within the Capital Programme for consideration through the Gateway Process; and

(iii)    all other projects be put through the revised “Gateway” process with a view to their rationalisation and prioritisation being on the basis of corporate priorities, need, affordability and delivery.

            The Committee agreed also that consideration be given to certain Capital projects being considered as potential projects within the City Investment Strategy.