Agenda item

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

The report of the Director of Function (Resources)/Section 151 Officer setting out the proposed capital budget and programme for 2025/26 was presented for the Executive to review prior to submission to the Full Council.

The report was presented by Councillor Robin Williams, Deputy Leader and Portfolio Member for Finance and Housing who reported that a capital budget of £44.294m is proposed with the programme and funding as set out in the table on the opening page of the report. The capital budget can change in the course of the year as additional grants are allocated and applied for and the budget is adjusted accordingly.

The Director of Function (Resources)/Section 151 Officer referred to the link between the capital strategy, the capital budget and the treasury management strategy in providing a framework for supporting and managing the Council’s capital objectives and expenditure.  The capital budget position has long been challenging and although the General Capital Funding from Welsh Government for 2025/26 is £401k higher than the 2024/25 allocation which is the first significant increase that the Council has received for a number of years, it does not make up for the erosion in the value of the funding that has taken place due to inflation. Table 1 of the report shows the anticipated capital funding available as £32.378m against a proposed programme valued at £44m. The shortfall of £11.91m is being met through unsupported borrowing, £10.623m of which is HRA expenditure and £1.293m General Fund expenditure. While this represents a shift in strategy with the Council not previously undertaking unsupported borrowing unless the schemes invested in generate savings to cover the borrowing costs, a prudent approach is being maintained to ensure that the borrowing proposed is manageable from a revenue perspective. The borrowing is necessary to enable investment in the Council’s assets many of which need upgrading with the Welsh Government capital funding allocation not sufficient to meet those costs. Additional supported borrowing may be made available by Welsh Government for highways purposes but details are yet to be confirmed.

Councillor Douglas Fowlie, Chair of the Corporate Scrutiny Committee reported from the committee’s 19 February 2025 meeting which also considered the proposed Capital Programme and Budget for 2025/26 to confirm that having noted that there are no sources of significant capital funding available to the Council to fund any large scale projects apart from the HRA which is earmarked for HRA projects alone and cannot be used for any other purpose, the committee had supported the capital budget proposals as presented.

The Executive acknowledged the potential value of capital projects to the local workforce and companies and noted the importance of local companies tendering for capital contracts to the benefit of the local economy. The Executive also acknowledged the innovation and initiative shown by Officers in securing capital grants.

It was resolved to recommend to the Full Council the following

capital programme for 2025/26 –

                                                                                                          £’000  

2024/25 Schemes Brought Forward – General Fund           6,439

Refurbishment/Replacement of Assets                                   6,304

Heating System upgrades Low Carbon Heat grant

funding                                                                                             4,463

Communities for Learning                                                             152

Flood Relief Scheme                                                                        330

Holyhead: A Culture and Heritage Driven

Transformation                                                                               4,367

Economic Development Sites and Premises                            200

Waste Infrastructure                                                                     1,445

Housing Revenue Account                                                      20,594

Total Recommended Capital Programme 2025/26            44,294

Funded By:

General Capital Grant                                                                   2,661

Supported Borrowing General                                                   3,118

Communities for Learning Unsupported Borrowing              152

Capital Receipts Reserve                                                               500

Earmarked Reserves                                                                    1,160

Welsh & UK Government Grants                                            14,816

Unsupported Borrowing – General Fund                                1,293

HRA Revenue Account Surplus                                                5,488

HRA External Grants                                                                     4,483

HRA Unsupported Borrowing                                                 10,623                                                                                                 

2025/26 Total Capital Funding                                                44,294