Agenda item

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

The report of the Director of Function (Resources)/Section 151 Officer setting out the financial performance of the capital budget for the 2019/20 financial year was presented for the Executive’s consideration.

The Portfolio Member for Finance reported that a summary of capital spending to 31 March, 2020 is provided in the table at paragraph 2.1 of the report. The budget for the General Fund was £29.790m with expenditure of £18.203m incurred as at 31 March, 2020 equating to 61% of the budget. Reasons for the underspend include less progress than anticipated being made with large grant funded projects as listed in paragraph 2.2 of the report with the Covid-19 crisis being one factor in the delay.  These projects will slip into 2020/21 along with the grant funding for them.

The Director of Function (Resources) confirmed that the level of underspending, although significant (32% of the funding available) is not unexpected when dealing with a number of large complex projects whose progress can be affected by a range of factors including unexpected issues that can arise once work has commenced on site. The status and progress of current capital grant schemes is provided in section 3 of the report. In all cases, the funding for the projects have been secured and will be carried forward to 2020/21, with no loss of resources for the Council. An element of slippage was built into the 2020/21 budget – this reports updates those figures.

In considering the report, the Executive sought further assurance about the certainty of grant funding in light of the slippage on the capital programme and also whether the Covid-19 crisis in terms of the introduction of special measures and the increased costs these may entail poses a risk to the Council’s capital projects.

The Director of Function (Resources)/Section 151 Officer advised that the largest grant involves the 21st Century Schools programme and whilst schemes in Band A and Band B of the programme and the grant funding for them have been confirmed and is secure at this point in time, should progress not be made those schemes may have to be amended which may in turn impact on the level of grant funding from Welsh Government. Otherwise, funding for projects that have slipped into 2020/21 will be carried forward with them. As regards the impact of the Covid-19 crisis on capital projects, for those schemes where the contract has been agreed and work has commenced, any additional costs which contractors might claim because of the need to implement special measures as a result of Covid-19 will have to be looked at in the context of the contract terms. With new contracts not yet awarded, then tenders for the work will reflect the costs of the new ways of working due to the Covid-19 crisis; the Council will at that point evaluate the effect on the capital budget and seek to establish how much if any additional costs can be claimed through grant. It remains to be seen whether grant funding bodies acknowledge the impact of Covid-19 on costs and on the projects already submitted for which grant funding has been confirmed.

It was resolved –

•           To note the draft outturn position of the Capital Programme 2019/20 that is subject to audit; and

•           To approve the carry-forward of £12.109m to 2020/21 for the underspend on the programme due to slippage. The funding for this will also carry forward to 2020/21. The revised capital budget for 2020/21 is £41.368m.