Agenda item

Context:

To scrutinise 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 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, Public rights of way, as outlined in Appendix 1 of the report.  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, social care, property investment and possibly Additional Learning Needs. The level of investment is currently being assessed. However, in accordance with the principle already established , 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 future programme for 21^st Century Schools relates to the budgets for the approved programme on Future Schools including the new schools at Monmouth and Chepstow and does not include budgets for Chepstow School or King Henry VIII School In response. In response, it was noted that until the Welsh Government indicates its proposals with regard to Band B, the Authority is unable to provide any information with regard to the development of these schools.  However, Monmouthshire County Council is committed to its four schools strategy with regard to the 21^st Century Schools Programme.

·         In response to Select Committee Member’s question regarding the cost of providing 21^st Century Schools, it was noted that a report had been presented to Council which had extended the amount of funding that was required for the Monmouth and Caldicot Schools.  This funding has been included in the Capital Programme which is half funded by the Authority and half funded by Welsh Government. Therefore, the budget for the two schools has been set and funded. Total cost equates to £49,000,000 for Monmouth School and £41,000,000 for Caldicot School. With regard to Monmouth swimming pool, further work was still required and a definitive figure for this proposal was not yet available.

·         The overall funding is achieved via part borrowing, part Welsh Government resources and part capital receipts.

·         The Budget for Area Management, in the sum of £20,000, could be further reduced or cut in the face of other pressures.  It was noted that there is a review of Area Management taking place.  Therefore, it had been decided to leave the £20,000 budget in place for the time being until the review had been completed.  This decision will be made by Full Council.