AGENDA ITEM NO. 8
REPORT TO:
Executive Board
REPORT NO:
CFPO/04/06
DATE:
17 January 2006
LEAD MEMBER:
Councillor Alun Jenkins (Finance & Performance)
LEAD OFFICER:
Chief Finance & Performance Officer
CONTACT OFFICER:
John Clark (292718)
SUBJECT:
Non HRA Rolling Capital Programme 2005/06 – 2009/10
WARD:
N/A
1.
PURPOSE OF THE REPORT
To review the 2005/06 - 2009/10 non HRA Capital Programme and Prudential Indicators for 2005/06 and
provide information on current capital finance issues.
2.
EXECUTIVE SUMMARY
2.1 The total capital expenditure in 2005/06 is estimated to be £26,718k.
2.2 The expenditure is fully funded by borrowing supported by the Welsh Assembly Government, grants and
contributions and capital receipts.
2.3 Capital receipts anticipated in 2005/06 will allow a £1,952k reduction in unsupported borrowing
undertaken in 2004/05 in respect of Secondary Schools Reorganisation.
2.4 The Joint Member / Officer Asset Management Group has recommended that additional Welsh Assembly
Government General Capital Funding for 2006/07 be allocated to flood prevention on highways and
traffic segregation and Disability Discrimination Act works in schools.
3.
RECOMMENDATIONS
3.1 The non HRA rolling capital programme for 2005/06 to 2009/10 as detailed in Appendix 2
(including the allocation of additional Welsh Assembly Government General Capital Funding as
recommended by the Joint Member/Officer Asset Management Group) is approved.
3.2 The capital programme is next reviewed and reported to the Executive Board in June 2006.
3.3 The Prudential Indicators in Appendix 4 be noted.
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REASONS FOR RECOMMENDATIONS
This report follows earlier monitoring reports in June and October 2005 in compliance with Financial
Regulation 2.4 that requires that the Chief Finance Officer monitors and reports to Members on the Capital
Programme.
Local Authorities are required under the Local Government Act 2003 to comply with the CIPFA Prudential
Code for Capital Finance. The indicators presented in Appendix 4 fulfil the requirements of the Code.
Mark Owen
Chief Finance & Performance Officer
4.0
BACKGROUND INFORMATION
Capital Programme 2005/2006
4.1
The Executive Board approved the last revision of the capital programme 2005/06 to 2009/10 on 18
October 2005 (CFPO/50/05). Appendix 1 provides a summary of actual expenditure by service, the
financing of that expenditure and the variance between the latest revised programme and the previously
approved position.
4.2
The latest revised expenditure on all capital schemes is £26,718k a net decrease of £567k compared
with the projected expenditure reported to the Executive Board in October. The significant changes
are as follows: Economic Development – Article 33 expenditure is increased by £453k following notification of
Round 4 grant funding. £433k in respect of the Brymbo Community Enterprise project cost reflects
Local Regeneration Fund grant allocated to the Council for this scheme managed by the Brymbo &
Tanyfron Regeneration Trust with a total estimated cost of £3,374k.Rephasing of spending on the
Industrial Portfolio Infrastructure, Technology Park Pumping Station Works, Railway Land
Bridgeworks and Cefn Mawr Regeneration projects has moved £806k spend to 2006/07.
Education – As reported in paragraph 4.11 below, £500k of the 2006/07 School Buildings Improvement
Grant is to be paid in advance by the Welsh Assembly Government. Schools’ minor works have been
increased by £444k. A further £56k, previously transferred from the schools furniture and equipment
annual capital provision to minor works, has been returned. A review of the phasing of payments on the
Coedpoeth Primary Schools Reorganisation has brought forward £277k of the approved costs from
2006/07 to 2005/06. Rephasing of spending on the St Joseph’s, Barrack’s Field and Acton Youth Centre
projects has moved £1,583k expenditure to 2006/07.
Social Services –Provision of £121k for Residential Child Care relocation has been moved to 2006/07
and is subject to review during the revenue budget process. Estimated spend in 2005/06 on office
accommodation at Greenacres has increased by £90k.
Housing Capital Programme
The 2005/06 Housing Renewal Areas programme has been increased by £211k using owners’
contributions. The Chief Housing and Public Protection Officer is to report to the Executive Board later
in January on the Housing Revenue Account and the Housing General Fund capital programmes. The
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General Fund report will include details of the Council’s allocation of £1.9m Housing Renewal Area
grant for 2006/07, announced by the Welsh Assembly Government in December.
Funding
4.3
In funding the capital expenditure, Welsh Assembly Government allocations of General Capital Funding
(General Capital Grant and Basic Credit Approval) has been utilised in accordance with the Executive
Board decision at its meeting on 1 February 2004. Unsupported Borrowing of £2,764k made in 2004/05
in respect of the Secondary Schools Reorganisation project will be reduced by receipts from planned
asset sales of £1,952k. The balance remaining of £812k will be eliminated as further receipts from asset
sales allow. Use of grants and contributions is estimated at £16,486k and £6,485k expenditure is to be
funded from Capital Receipts.
Capital Programme 2006/07 – 2009/10
4.4
The revised programme includes:  revised forecasts of expenditure on committed schemes
 projects which have received specific funding or been agreed by the Executive Board
 annual capital provisions.
4.5
The resources available to fund the programme comprise WAG unhypothecated supported borrowing,
grants, contributions, capital receipts and prudential system unsupported borrowing.
Capital Receipts
4.6
As shown in Appendix 1, the proposed capital programme will require capital receipts funding of an
estimated £16.9 million from 2005/06 onwards. Corporate usable capital receipts available at 31 March
2005 were reduced to £78k to minimise unsupported borrowing. Additional income from the sale of
surplus assets, totalling £16.8m will be required to ensure the programme is fully funded (as assumed in
Appendix 1). A programme of asset sales, monitored by the Joint Member/Officer Asset Management
Working Group, is in place to achieve this.
4.7
By their very nature, capital programmes are dynamic and during the course of the year further funds
may be made available for specific schemes. A close watch will also be needed to ensure that sufficient
capital receipts are realised. It is therefore recommended that the capital programme is reviewed again
in June 2006.
4.8
Specific issues on schemes in the programme are discussed below:
St Joseph’s Voluntary Aided School
4.9
Following a review, the contribution from the County Borough Council as Local Education Authority
(LEA) towards the scheme, which has a total estimated construction cost of £8,600k, has been increased
by £46k to £796k. This additional requirement can be financed be a transfer from the 2006/07 schools
minor works programme. In addition to this, information technology equipment, furniture and other
equipment estimated at £132k is to be funded from annual capital provisions.
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Minera Aided Primary School
4.10 Provision has been made in the 2006/07 schools capital programme for an LEA contribution of £20k
towards a scheme for refurbishments at Minera Aided Primary School with a total estimated building
cost of £550k. This provision can be met from the 2006/07 schools minor works programme.
School Buildings Improvement Grant
4.11 The Welsh Assembly Government have offered to bring forward £500k of Wrexham’s 2006/07 annual
School Buildings Improvement Grant to 2005/06. While this offer does not represent additional funding,
it gives the opportunity to complete schools’ minor works earlier than planned and has been accepted.
The proposed use of the grant is shown on page 11 of appendix 2.
Rhos Schools Reorganisation
4.12 Following the decision of the Executive Board at its meeting on 13 December (ACEO/52/05), this
project is included in the programme at an estimated cost of £6,850k.
Ponciau Park
4.13 Wrexham’s bid for Heritage Lottery Fund (HLF) grant for restoration of Ponciau Park,
Rhosllanerchrugog has received a stage one pass and £505k has been earmarked by the HLF for the
project. Progress on the project is conditional on the project receiving stage two approval by the HLF.
The provisional grant is included in the 2007/08 capital programme in addition to the provision in
2006/07 of £100k for capping disused mineshafts on the site funded by the Environment department.
Social Services Accommodation
4.14 Following consideration by the Joint Member/Officer Asset Management Group, provision of £493k is
made for adaptations to Greenacres and Crown Buildings for short- term accommodation for staff from
Grosvenor road prior to the sale of this site in 2006/07. The Corporate Property Review is addressing the
long- term accommodation of staff and it is anticipated that the Greenacres site will be sold to realise a
capital receipt.
Residential Child Care
4.15 As part of the revenue budget process, a report on the provision of residential child care is to be made to
the Executive Board. The results of this process may affect the capital provision for relocation of the
service.
Residential Homes for Older People - Care Standards Act Improvements
4.16 Consultation is currently being undertaken on the Social Services Older Person's Commissioning
Strategy, the outcome of which will make recommendations for future services for older people in
Wrexham including residential homes for older people.
Service development options with the National Health Service are being explored including the potential
use of one of the Council’s Residential Homes as a joint social services and health facility.
The outcome of these discussions will determine proposals for the Council’s homes for elderly people
and a report containing these proposals including project costs, funding and time scales will be made to
the Executive Board in due course.
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Welsh Assembly Government General Capital Funding
4.17 The final 2006/07 Welsh Local Government settlement announced by Welsh Assembly Government on
8th December included a General Capital Funding allocation to Wrexham of £8,102k, which is £531k
greater than the amount included in the Capital Programme.
On 30 November, the Joint Member Officer Asset Management Group considered the allocation of the
additional resources (at that time based on a provisional allocation which gave an increase of £558k) and
resolved to recommend that the Executive Board approve the allocation of £250k to flood protection and
the balance to traffic management and Disability Discrimination Act works in schools.
The Executive Board of 13 December (CTAMO/23/05) subsequently approved the allocation of £250k
to flood protection.
The schedules accompanying this report now incorporate the provision for flood protection. The
allocation to schools traffic management and DDA works, adjusted to reflect the final settlement figure,
is included for approval.
Prudential Indicators
4.18 The Local Government Act 2003 requires Local Authorities to comply with the CIPFA Prudential Code
for Capital Finance to demonstrate compliance with the code. Authorities are required to adopt and
monitor prudential indicators to show that their capital plans are affordable, prudent and sustainable, and
that treasury management decisions are taken in accordance with good professional practice. The
Council approved prudential indicators for the period 2005/06 to 2007/08 at its meeting on 9 March
2005. The changes to the 2005/06 indicators, resulting from the capital programme reported in
Appendix 2, are reported in Appendix 4.
Summary of Proposals
Members approve the rolling capital programme 2005/06 to 2009/10 as shown in appendixes 1 and 2.
Members approve the Prudential Indicators set out in appendix 4.
5.
CONSULTATION
5.1
The Capital Programme has been discussed at the officers’ Capital Programme Working Group held
on 14 December 2005.
5.2
The Joint Member/Officer Asset Management Working Group has considered reports on Capital
Receipts requirements and forecasts and Welsh Assembly Government General Capital Funding on 30
November 2005.
6.
SCRUTINY COMMITTEE COMMENTS
6.1
Not Applicable.
7.
IMPLICATIONS
7.1
Policy Framework – This matter is not covered by the Policy Framework but is explicitly delegated to
the Executive Board under the Constitution (Part 3- Table 4, 4(d)).
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7.2
Budget - The total non HRA capital programme for 2005/06 is £27.1 million, funding details are
provided in Appendix 1.
7.3
Legal - Significant legal implications of individual projects are the subject of separate, project specific
reports.
7.4
Staffing - There are no direct staffing implications as a result of this report.
BACKGROUND PAPERS
LOCATION
WEBSITE INFO.
Executive Board – 18 October 2005
CFPO/84/05
Legal & Administration
Department
Welsh Local Government Settlement
2006-07
Welsh Assembly
Government
http://www.internal.wrexham.gov.uk/
MinutesData/ExBoard/ex18102005m.
htm
http://www.wales.gov.uk/subilocalgov
/content/settlement/200607/settlement-e.htm
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