Agenda item

Context:

To outline the proposed capital budget for 2017/18 and the indicative capital budgets for the three years 2018/19 to 2020/21.

Key Issues:

Capital Medium Term Financial Plan (MTFP) issues:

·         The four year capital programme is reviewed annually and updated to take account of any new information that is relevant.

·         The major component of the capital MTFP for the next few years is the Future schools programme. The Council has recently approved further funding for this programme at its meeting held on the 20^th October 2016.

·         There are a number of other areas where there is a commitment to invest, however the schemes currently sit outside the programme as work progresses to identify the funding requirements.  These are:

-       Monmouth Pool – commitment to re-provide the pool in Monmouth as a consequence of the Future Schools Programme.

-       Abergavenny Hub – commitment to re-provide the library with the One Stop Shop in Abergavenny to conclude the creation of a Hub in each of the towns.

-       Disabled Facilities Grants – the demand for grants is currently outstripping the budget, work is being undertaken to assess the level of investment required to maximize the impact and benefit for recipients.

-       City Deal - 10 Authorities in the Cardiff City region are looking at a potential £1.2 billion City Deal. Agreement to commit to this programme is being sought across the region in January 2017 and so would impact on the capital MTFP. The potential impact on individual authority budgets is currently being modelled in advance of decisions on specific projects and profiles in order for authorities to start reflecting the commitment in their MTFPs.

-       J and E Block – the office rationalization programme is being considered to see if there is a solution that would enable the Magor and Usk sites to be consolidated, releasing funding to pay for the necessary investment to bring the blocks into use.

·      A strategy that enables the core programme, Future Schools and the above schemes to be accommodated is being developed. Notwithstanding this there will still remain a considerable number of pressures that sit outside of any potential to fund them within the Capital MTFP and this has significant risk associated with it.  Cabinet has previously accepted this risk. 

·      The current policy is that further new schemes can only be added to the programme if the business case demonstrates that they are self- financing or the scheme is deemed a higher priority than current schemes in the programme and therefore displaces it.

·      In summary, the following other issues and pressures have been identified:

-       Long list of back log pressures – infrastructure, property, DDA work and public rights of way.  None of these pressures are included in the current capital MTFP, but this carries with it a considerable risk.

-       Capital investment required to deliver revenue savings – this is principally in the area of office accommodation and looking at alternative delivery models for leisure and culture, and social care, property investment and possibly Additional Learning Needs. The level of investment is currently being assessed. However, in accordance with the principle already set above, if the schemes are not going to displace anything already in the programme then the cost of any additional borrowing will need to be netted off the saving to be made.

-       The IT reserve is depleted so funding for any major new IT investment is limited.  Any additional IT schemes will need to either be able to pay for themselves or displace other schemes in the programme.

-       Circuit of Wales – the Authority has undertaken due diligence work on a version of the proposal which concluded not to proceed, the current proposal is being considered by Welsh Government without recourse to Local Authority funding.

Member Scrutiny:

·         The capital programme will be finalised at the same time as the revenue budget proposals which will be on the 31^st January 2017.

·         The Budget for Area Management in the sum of £20,000 could be further reduced or cut in the face of other pressures. However, it was noted that this budget is tied in with the general review of Area Management which will be considered by Full Council in due course. It was considered that a decision regarding this matter was required as quickly as possible before the new Council is elected in May 2016.

·         The Asset Management Plan for County Farms will be scrutinised by the Economy and Development Select Committee.

·         Paragraph 3.4 of the report – areas where there is commitment to invest but the schemes currently sit outside of the programme.  It was noted that Cabinet could add these items to the Capital programme for 2017/18.

·         Disabled Facilities Grant – It was noted that when the budget consultation was launched, this matter had been put out for review to see what additional grants could be provided in next year’s budget.  Also, Cabinet was looking at additional monies that could be put in this year’s budget so that some of the back log could be cleared.  Officers were currently working on providing Cabinet with a schedule of work and amounts that could be added to this year’s budget.

·         J and E Blocks – Work was ongoing regarding J and E blocks and Innovation House, Magor.  All options relating to these sites were being investigated.  Cost and affordability were the key issues with regard to these sites.  Therefore, options were being considered that would be self-financing with a view to bringing J and E Blocks up to a habitable standard.  An holistic business Case was being established by the Estates Team.

·         In response to a Select Committee Member’s question, it was noted that a Strategic Asset Management Plan is in place which could be brought to the Select Committee at a future meeting.  Also, an asset investment strategy was being looked at with a view to being brought through shortly which would look at investing in opportunities and securing commercial returns. Both of these plans could be added to the Select Committee’s work programme.

·         IT reserve – In response to a Select Committee Member’s question regarding contributions once made by Members for their IT equipment but had been stopped, it was noted that this matter had been removed by the Independent Remuneration Panel in the Local Government Measure.

·         A Select Committee Member referred to the need to build new Comprehensive Schools at King Henry VIII and Chepstow to avoid these schools being disadvantaged.  Also, consideration should be looked at with regard to providing a catering college on the site of a new King Henry VIII School.  All of the 22 local authorities have submitted high level outline information in terms of their intent.  With regard to Plan B proposals, Welsh Government are looking for local authorities to bring forward strategic outline cases in the coming months.  Officers within the Authority were establishing the Revised Strategic Education Review document which will inform, influence and guide where the Authority goes forward with regard to our school estate.  It was noted that this matter was on the Children and Young People Select Committee Work Programme for review, in due course.

·         A Select Committee Member considered that a new Chepstow Comprehensive School could provide a focus on science and business. In response, it was noted that looking forward into the future, there was a need to be more creative with regard to the Plan B programme.

·         It was noted that the Agri Urban Project was currently in phase 1 with a view to establishing plans for 2018.  Catering colleges and food hubs are being considered via this project.