Issue - meetings

Division/Wards Affected: All

Purpose:Chartered institute of Public Finance and Accountancy (CIPFA) produced a revised regulatory Code in December 2017, which included a need for local authorities to produce a Capital Strategy.  The requirements were staggered with an aim for reporting compliance during 2018/19 with a full Capital Strategy implemented for 2019/20.  This report concentrates on the former in evaluating the governance, planning and priority setting involved in presenting 2019-20 capital budget proposals and the 3 years thereafter making up the collective capital medium term financial plan.

CIPFA report that a Capital Strategy should be tailored to individual circumstances and consequentially don’t volunteer a prescriptive format.  The overall intent is that any Capital Strategy should allow Members to understand how stewardship, value for money, prudence, sustainability and affordability will be secured.  The overall purpose of a capital strategy being to provide opportunity for engagement with Full Council to ensure overall strategy, governance procedures and risk appetite are fully understood by all elected members

The code, in describing the Capital Strategy, reports itcan be delegated to Cabinet (or similar body) with Full Council being responsible.  MCC’s approach is to report budget setting process through Cabinet, with consideration and approval of the future capital programmes resting with full Council.  The Council’s Constitution is consistent with compliance requirements.  It is anticipated that the actual resulting capital strategy will be reconciled and consistent with a wider financial strategy and both available for consideration during Spring cycle of meetings.

Author: Mark Howcroft – Assistant Head of Finance (Deputy S151 Officer)

Contact Details: markhowcroft@monmouthshire.gov.uk

That Cabinet considers the capital strategy requirements and assesses the preparedness of current practices to satisfy capital strategy compliance obligations for onward endorsement to Council as part of capital strategy report in January 2019.

That Cabinet considers the annual core capital programme identified in

Appendix 2 for 2019-20, together with the additions proposed in paras 6.14 to

6.18, and issues its draft capital budget proposals for 2019/20 to 2022/23 for consultation purposes.

That Cabinet reaffirms the principle that during the financial year, any new schemes volunteered can only be added to the programme if the business case demonstrates that they are self-financing or if the scheme is deemed a higher priority than current schemes in the programme and therefore displaces it.

When considering the relative merits of projects and potential displacement, that Cabinet consider the indicative priority matrix supplied in para 4.15, either endorsing or amending it for onward consideration by full Council.

That Cabinet considers the extent of proposed sale of assets captured in exempt Appendix 5, in order to support the capital programme, and that once agreed, no further options are considered for these assets.

That Cabinet note the potential forecast of capital receipt levels, prior to the consideration of using £75,000 of receipts balance to afford condition survey work to update historic condition survey information and a ceiling of capital receipts funding of £300k to assist with the business case affordability of

Severn View Residential Home replacement. Any excess of capital receipts generated thereafter is proposed to be applied by Treasury colleagues in a fashion that will mitigate minimum revenue provision costs and interest payments, to assist with revenue budget management. This is a change in capital receipt strategy to that applied in earmarking receipt generation to afford Members tranche A Future Schools aspirations. This will mean that any further school redevelopment will need to derive a greater extent of revenue headroom to afford the prudential borrowing financing of such developments.