Issue - meetings

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

It was resolved –

·        To reaffirm the capital strategy principles set out in paragraph 3 of the report.

·        To confirm that the 2018/19 capital programme funding will be limited to the total of the general capital grant and supported borrowing (as determined by Welsh Government) and the estimated value of any capital receipts that will be received.

·        To confirm that the existing project commitments (Table 5 of the report) and the funding for the renewal/upgrade of existing assets for 2018/19 are as set out in Table 6 of the report subject to the  addition of £250k to be released during 2018/19 from the capital reserve fund to be allocated to invest to save projects.

The report of the Head of Function (Resources) and Section 151 Officer setting out the proposed capital strategy for 2018/19 was presented for the Executive’s consideration. The report identifies the potential future capital expenditure requirements, assesses the impact on the capital financing element of the revenue account and determines the funding available to finance new capital schemes in 2018/19.

The Portfolio Member for Finance reported that in order for the Council to determine which projects are included in the 2018/19 capital programme, the Executive is asked to provide guidance on the level of funding that will be made available bearing in mind the impact of the capital programme on the capital financing budget element of the Council’s Revenue budget. The capital programme is funded from a number of sources which are listed in the report. In October, 2016, the Executive agreed to a number of principles in respect of the capital strategy and these are outlined in section 3 of the report. The Executive is being asked to reaffirm those principles for the purpose of the 2018/19 capital strategy.

The Council has commenced an ambitious plan to modernise and update its schools through the Twenty-First Century Schools Programme at a total capital cost of around £120m. Band A of the programme is funded by 50% additional funding from the Welsh Government and 50% via unsupported borrowing. It is anticipated subject to confirmation, that the Welsh Government’s contribution to Band B will remain at 50% for the traditional funded schemes but with the introduction also of an element of private sector funding through a mutual investment model. In seeking to reduce revenue expenditure to ensure a balanced budget, it is reasonable to also look to reduce the increase in the capital funding budget by restricting it to a level that can be funded by the annual settlement i.e. the General Capital Grant and supported borrowing which are expected to be around the £1.3m and £2.2m allocated respectively in 2017/18. Capital grants will be available in 2018/19 to fund specific schemes e.g. the completion of the Llangefni Lin k Road, flood alleviation and infrastructure schemes and Phase 2 of Holyhead Market Hall amongst others at a total cost £23.4m. Consideration may also have to be given to funding a number of other potential schemes – these are set out in section 7.3 of the report.

The Head of Function (Resources) and Section 151 Officer confirmed that the funding available to support capital schemes is tight; it does reflect a change of approach by the Welsh Government whereby local government capital schemes are increasingly funded through specific grants whereas the general capital grant and the supported borrowing element of capital funding have largely remained unchanged for the past few years with the upshot that there is less money available for the Council’s general projects. The Officer said that it is important that the Council should continue to invest in its current assets by way of maintenance and upgrading in order to avoid  ...  view the full minutes text for item 7