Agenda item

To present the joint report of the Scrutiny Manager and the Director of Function (Resources)/Section 151 Officer.

The report of the Scrutiny Manager was presented for the Committee’s consideration. The report outlined the context to the 2019/20 Capital Budget setting process along with the key issues and questions for Scrutiny in evaluating the Executive’s initial capital budget proposals taking into consideration the key messages from the public consultation exercise. The following documentation was appended to the report –

4.1   The report of the Director of Function (Resources)/Section 151 Officer on the initial proposals for the 2021/22 capital budget which was presented to the Executive on 18 January, 2021 and which included a position statement with regard to the Executive’s initial capital budget position for 2021/22; the level of capital expenditure; borrowing impact on the revenue budget due to capital financing costs; ongoing revenue costs (e.g. maintenance); budget pressures and risks and impact on the Medium Term Financial Plan and Council Plan.

Councillor Robin Williams, Portfolio Member for Finance reported that a capital programme of £36.155m is proposed for 2021/22; as unlike in previous years the capital budget for 2021/22 falls short by approximately £900k the intention is to utilise the projected underspend on the revenue account in 2020/21 to bridge the gap and enable the planned programme to be delivered. The greater part of the capital expenditure in 2021/22 is linked to the Housing Revenue Account (HRA) which maintains and develops the Council’s housing stock.

The Director of Function (Resources) and Section 151 Officer provided an overview of the capital budget process by way of a visual presentation which he expanded upon orally with the key points highlighted as follows -  

•           That the level of funding under the Welsh Government’s General Capital Grant and Supported Borrowing has not increased for a number of years and is not expected to change significantly between the provisional and final settlement.

•           That the Council’s capital strategy provides for funding to be allocated annually to invest in existing assets. Hence the programme includes £1m for refurbishing school buildings; £60k for other Council buildings; £1.25m for Highways; £195k for replacement vehicles and £292k to upgrade IT assets. A £50k allocation for the Disabled Facilities Grant is also included in the programme the grant being a statutory obligation.

•           Capital investment of £6.6m is planned for new schools (Llangefni area – subject to the final decision) in line with the Council’s commitment to the 21st Century Schools Programme.

•           The capital programme will be funded by a combination of external grants, the General Capital Grant, and supported and unsupported borrowing (details as at Table 1 paragraph 3.1 of the report). HRA projects are to be financed through HRA funding which is ring-fenced for the purpose.

•           New one-off capital projects to the value of £1.105m are included in the capital programme for 2021/22 and these encompass chrome books for schools, resurfacing two play areas in Holyhead High School, flood relief schemes and match funding for economic development and environmental wellbeing projects. These projects will be financed from general reserves provided the predicted £1m underspend on the 2020/21 revenue budget is realised.

4.2 The report of the Programme, Business Planning and Performance Manager which provided an analysis of the messages from the Public Consultation exercise on the Authority’s 2021/22 initial Budget proposals as approved by the Executive conducted during the period 19 January to 2 February, 2021. (Appendix 2)

As previously reported the Programme, Business Planning and Performance Manager confirmed that there was a slight majority (51.55%) of the respondents in the public consultation in favour of the proposals for capital funding over the next 12 months.

Councillor Dafydd Roberts, Chair of the Finance Scrutiny Panel reporting from the Panel’s 12 February, 2012 meeting confirmed that the Panel agreed with the proposals for the 2021/22 capital programme but that it also registered concern over the condition of school buildings on the Island which it recognised as a long term issue that needs specific attention. 

Following on from the feedback from the Finance Scrutiny Panel above, the Committee questioned whether a planned £1m allocation for school refurbishment in 2021/22 is sufficient and whether there are any prospects for additional funding being made available.

Councillor Robin Williams, Portfolio Member for Finance acknowledged that the Council’s school estate consists of ageing buildings especially so its secondary schools which will require investment over the coming years either by refurbishing the current buildings or replacing them with new buildings. Additional support for the delivery of new schools is being provided by Welsh Government’s 21st Century Schools Programme.

The Director of Function (Resources)/Section 151 Officer advised that maintaining the whole range of Council assets including schools, leisure centres and main Council building is going to be problematic for the future as the capital investment required is likely to far exceed what the Council is able to afford. Whilst the Council’s capital strategy entails modernising its assets where it can by taking advantage of external funding where available, consideration will have to be given to rationalising the Council’s assets as continuing to maintain them in the long term is becoming an increasing challenge.

In response to a question about the wisdom of investing £300k on resurfacing two play areas at Holyhead High school in the context of deteriorating school buildings, the Portfolio Member for Education clarified that the expenditure meets an immediate need at the school.

Having considered the information presented both written and verbally at the meeting, and having regard to the messages from the public consultation exercise and feedback from the Finance Scrutiny Panel, it was resolved to recommend the Capital Budget for 2021/22 as presented to the Executive (Councillors Aled Morris Jones and Bryan Owen abstained from voting).