Agenda item

To submit a report by the Head of Function (Resources)/Section 151 Officer.

The report of the Head of Function (Resources)/Section 151 Officer incorporating a proposed capital budget for 2019/20 was presented for the Executive’s recommendation.

The Portfolio Member for Finance reported that the Executive is required to propose a capital budget for 2019/20 which will then be presented to the Full Council at its meeting on 27 February, 2019. The report set out the proposed main capital programme for 2019/20 as well as bids for additional schemes regarding which the Executive’s guidance is sought.

The Head of Function (Resources)/Section 151 Officer said that the core capital budget  reaffirms previous capital strategies which are based on investing in existing I.T, vehicle and building assets, road surfacing work and providing disabled facilities grants as statutorily required. As in previous years the level of core capital funding which the Council receives from Welsh Government (encompassing the General Capital Grant and the Unhypothecated Supported Borrowing) is largely unchanged meaning that its purchasing power reduces year on year thereby limiting what the Council can do. The Council has over the years made use of capital receipts from the sale of surplus assets as a contribution towards capital expenditure. However, apart from surplus school sites which have become available as a result of the Schools’ Modernisation Programme the proceeds from the sale of which are earmarked for building new schools, the Council has very few other assets to sell and so the sum available from capital receipts to fund new capital expenditure is much reduced from previous years.

The Officer referred to the following as matters requiring the Executive’s guidance on how to proceed –

•           In previous capital budgets, £1m of capital funding has been allocated towards the Seiriol Extra Care Home project. However, as this project will now be funded in its entirety through the Housing Revenue Account, the £1m allocated can now be released to fund other capital projects – a decision needs to be made on whether to release this funding.

•           In the 2018/19 Capital Programme, £1.858m of funding was allocated to the Gypsies and Traveller permanent and temporary sites consisting of £0.450m external grant for the permanent site and £1.408m from the Council’s own resources. There is planned expenditure of £0.120m in 2018/19 on the scheme leaving £1.288m of unused Council funding to be carried forward into 2019/20.As planning permission for the temporary site has now been granted, £0.778m has been included in the 2019/20 draft capital programme for the completion of this project. The plans for the permanent site have not moved ahead as quickly - planning permission has yet to be given and further work is required on the financial viability of the project. A decision needs to be made therefore on whether to release the remaining £0.51m of funding which can be used to fund other capital projects in 2019/20. Once the scheme has been finalised and the costs agreed, capital funding will be allocated to the project at a future date.

•           There have been 10 new capital bids submitted for inclusion in the 2019/20 Capital Programme (Table at section 3.3 of the report refers). These amount to £1.746m of which £0.949m would be externally funded with the remaining £0.797m being funded from the Council’s resources. All 10 bids could be funded from the £1.510m requested to be reallocated back into the general fund (made up of the £1.0m released from the Seiriol Extra Care Home project and £0.51m unused funding for the permanent Gypsy site as outlined above).

•           The Executive has in previous years approved the release of £0.25m from the capital reserve to fund small Invest to Save projects. Services were again invited to bid for the funding with two bids received totalling £0.400m (Energy Efficiency in Corporate Buildings - £250k and the Purchase of 4 new LPG vehicles and 4 electric vehicles - £150k). Both these bids could also be funded from the £1.510m that has been requested to be reallocated back into the general fund.

•           The Welsh Government has announced additional grant funding of £20m for 2019/20 for Highways resurfacing of which Anglesey’s allocation will be around £0.580m. A decision needs to be made on whether the grant is in addition to the minimum capital investment of £0.779m needed to meet the Highways contract in 2019/20 bearing in mind that the Highways Asset Management plan states that over £2m per annum needs to be spent on road surfacing to maintain roads to their current standard. The proposed capital budget assumes that the grant is in addition to the minimum capital investment required taking the capital budget for road maintenance to £1.359m.

The Executive considered the report and proposals and indicated that it supported releasing the £1.510m of unused funding for Seiriol Extra Care and the Residential Site for Gypsies and Travellers back into the General Fund to finance all 10 new capital bids along with the 2 Invest to Save project bids as submitted. In light of the Portfolio Member for Highways, Waste and Property’s confirmation that if money was no object, £66m would be required to bring all the Authority’s roads up to an acceptable standard, the Executive affirmed that the Welsh Government additional grant funding for Highways should be in addition to the minimum capital investment required.

It was resolved -

•           To recommend the following capital programme for 2019/20 to the Full Council -

                                                                                                                        £’m

Committed Schemes Brought Forward from 2018/19                     13.429

Investing in Existing Assets                                                                     2.539

Highway Resurfacing                                                                                 1.359

21st Century Schools                                                                                 7.563

Total General Fund Capital Schemes                                                  24.890

HRA Capital Schemes                                                                              13.110

Total Proposed Capital Programme                                              38.000

Funded By:

Funding B/F from 2018/19                                                                         1.099

General Capital Grant                                                                                 1.327

Supported Borrowing                                                                                 2.026

Unsupported Borrowing – 21st Century Schools                              1.847

Supported Borrowing – 21st Century Schools                                    1.943

External Grants                                                                                       18.728

Highways Refurbishment Grant                                                             0.580

HRA Unsupported Borrowing                                                                   1.000

HRA Funding                                                                                                 9.450

Total Funding                                                                                             38.000                                                                                  

•           That the £1.510m of unused funding for Seiriol Extra Care and Residential Sites for Gypsies and Travellers be released back into the General Capital Fund to finance the following –

•   The Council element of the funding for the 10 new capital bids set     out in paragraph 3.3 of the report (£797k)

•   Invest to Save Projects: - Energy Efficiency in Corporate   Buildings (£250k) and purchase of new LPG & Electric Vehicles (£150k)

•           To confirm that the additional grant funding for Highways resurfacing (£580k) is in addition to the minimum capital investment (£779k)