Agenda item

To present the report of 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 2025/26 Capital Budget setting process along with the key issues and questions for Scrutiny in evaluating the Executive’s final draft capital budget proposals. The report of the Director of Function (Resources)/Section 151 Officer to be presented to the 27 February 2025 meeting of the Executive summarising the proposed capital budget and programme for 2025/26 was attached at Appendix 1.

The report was presented by Councillor Robin Williams, Deputy Leader and Portfolio Member for Finance and Housing who reported that a capital budget of £39.309m is proposed with the programme and funding as set out in Table 3 of the report. In the course of the financial year the Council may receive additional grants for capital projects and should that be the case the budget will be adjusted accordingly.

The Director of Function (Resources)/Section 151 Officer referred to the Capital strategy that underpins the capital programme and he explained the main sources of funding for the programme as being the General Capital Grant from Welsh Government and supported borrowing. Although the General Capital Funding received from Welsh Government for 2025/26 is £401k higher than the allocation for the previous year which is the first significant increase 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 and is insufficient to meet the Council’s capital expenditure needs in terms of maintaining and improving its assets. The Council can take out unsupported borrowing but all the associated costs with borrowing in this way must be covered by the Council’s own revenue. The Section 151 Officer provided an overview of the schemes in the capital programme for 2025/26 along with the Housing Revenue Account capital funding and expenditure position. He further explained that it is understood but not confirmed that Welsh Government may be intending to introduce a scheme to support councils to borrow to fund further expenditure on highways, the details of the scheme and amounts involved are under discussion but the indication are that it will be a scheme over two years.

Councillor Geraint Bebb, Chair of the Finance Scrutiny Panel reported that the panel at its 18 February meeting had also considered the final draft capital budget proposals for 2025/26 and in scrutinising the details of the proposed capital budget had 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. He confirmed that the panel had resolved to support the final draft capital budget proposals for 2025/26 as presented and to recommend the same to the Corporate Scrutiny Committee.

The Portfolio Member for Finance and Housing and the Director of Function (Resources)/ Section 151 Officer responded to points raised by the committee on the capital budget proposals as follows –

• Explained that the £769k brought forward for school building major repair and upgrades is due to the late receipt of a Welsh Government grant that cannot all be spent before the end of the financial year. The Council has instead been allowed to spend its core budget and to set the expenditure against the grant on condition that the core budget slips into the following financial year.

• Clarified that with regard to vehicle replacement and whether the Council should be making efforts to extend the life and utility of its vehicles before replacing them, some vehicles require timely renewal e.g. gritters and minibuses in order to meet the needs of the client and to ensure the continuation of the service provided.
• Explained how the Council’s HRA investment and strategy supports the objectives of the Council Plan in ensuring that everyone has the right to call somewhere home. Expenditure funded by the HRA supports continued investment in the Council’s existing housing stock ensuring that they fulfil the requirements of the Welsh Housing Quality Standards including new standards introduced in November 2023 and energy efficiency commitments, in order to meet the needs of current tenants. The Council through the development of new council housing and the acquisition of former council houses as well as new build affordable houses seeks to meet the demand for affordable houses and the needs of individuals on the housing register. HRA funding also supports the development of extra care facilities.

Having scrutinised the final draft Capital Budget proposals for 2025/26 and having regard to the matters raised in discussion, the responses provided by the Officers and Portfolio Member and the feedback and recommendation of the Finance Scrutiny Panel it was resolved following a vote to support and recommend to the Executive, the final draft Capital Budget proposals for 2025/26 as presented.

(There were three abstentions and no votes against)