To submit a report by the Director of Function (Resources)/Section 151 Officer.
The report of the Director of Function (Resources) and Section 151 Officer setting out the financial performance of the Capital Budget for the 2020/21 financial year, subject to audit was presented for the Executive’s consideration.
Councillor Robin Williams, Portfolio Member for Finance reported that as with previous years the Capital Budget for 2020/21 is underspent which is not unusual where large complex projects are involved. However, the level of underspend in 2020/21 is significant (43% of the funding available) and is attributable to the effects of the Covid 19 pandemic and the introduction of the national lockdown at the beginning of the 2020/21 financial year which led to delays on capital works and schemes. In all cases, the funding for projects has been secured and will be carried forward to 2021/22 with no loss of resources for the Council.
The Director of Function (Resources) and Section 151 Officer elaborated on the reasons for the underspend with reference to individual schemes as summarised in the table at paragraph 2.2 of the report which shows the amount of underspend on each scheme and comments on their status. The Coronavirus pandemic has affected progress especially with regard to housing development where social distancing requirements and other Covid related regulations have hampered construction and planned maintenance work. Although an element of catch-up was achieved in the final quarter of 2020/21, it was not enough to make up for the three months that were lost at the beginning of the year. A delay in finalising proposals for schools’ modernisation in the Llangefni area has also contributed to the underspend as has a delay in the delivery of new waste vehicles which meant that the new waste fleet in its entirety was not purchased before year end. Many of the capital schemes are grant funded and despite the lack of progress on some of the schemes no grant funding has been lost but will instead carry forward into 2021/22. An update on the Authority’s Treasury Management Strategy will in due course be presented to the Governance and Audit Committee and thereafter to the Executive and will reflect the impact of the capital budget underspend on the Council’s management of its cash and borrowing activity.
Councillor Dafydd Roberts, Chair of the Finance Scrutiny Panel reported that the Panel in scrutinising the capital budget outturn report had asked that in order to facilitate capital expenditure the possibility of bringing forward the capital budget setting timetable be looked at especially as much of the capital programme content is known beforehand; an earlier start would allow tenders to be agreed sooner and work to proceed at a different more favourable time of the year thereby improving the likelihood of projects keeping to schedule.
It was resolved –
· To note the draft outturn position of the Capital Programme 2020/21 that is subject to audit, and
· To approve the carry-forward of £11.898m to 2021/22 for the underspend on the programme due to slippage. The funding for this will also carry forward to 2021/22 as per paragraph 4.3 of Appendix A to the report giving a revised capital budget for 2021/22 of £48.053m.