Agenda item

(Director of Finance & ICT) To consider the attached report (FPM-003-2013/14)

The Director of Finance and ICT presented a report on the provisional capital outturn for 2012/13. The report set out the Council’s capital programme for 2012/13, in terms of expenditure and financing, and compared the provisional outturn figures with the revised estimates. The revised estimates were based on the Capital Strategy that had been adopted by the Council in February 2013.

The Director of Finance and ICT stated that the Council’s total investment on capital schemes in 2012/13 had been £13,089,000, compared to a revised estimate of £13,087,000. Although the overall difference was negligible, there were some variances on particular schemes within the General Fund and Housing Revenue Account (HRA).  Expenditure on General Fund projects totalled £3,263,000, which was £306,000 or 8.5% less than anticipated, and expenditure on the HRA totalled £9,826,000, which was £308,000 or 3.2% more than anticipated.

The majority of the variations related to changes in the timing of works being carried out between the financial years, where work had not been completed by 31 March 2013 and the expenditure had slipped into 2013/14. Since the work had already been committed on the projects which had slipped, it had been recommended that the unspent elements of these budgets be carried forward to 2013/14. In addition to these variations, one small saving and two small overspends on the General Fund schemes had occurred and the larger of the overspends related to work which had been re-classified as capital therefore a compensating saving had been on the revenue account.

The Director of Finance and ICT informed the Committee that the major schemes in the General Fund Capital Programme in 2012/13 had been the Astroturf all-weather pitch at Waltham Abbey and the refurbishment of the changing village at Loughton Leisure Centre.  Construction had commenced on the all-weather pitch in the summer of 2012 and had required a dry period for the surfacing works to be undertaken, which resulted in a delay due to the adverse weather experienced throughout the winter although it was expected to be completed by July 2013. It had therefore been recommended that the remainder of the budget was carried forward.  The work at the Leisure Centre had been completed on time and on budget.

The largest underspend on the General Fund had been on the Planned Maintenance Programme (£88,000).  Although most schemes had been completed in 2012/13, some schemes within the Civic Offices such as the refurbishment of the toilets and energy efficiency works experienced some slippage and a carry forward had been recommended.  Also there had been a £10,000 underspend regarding the roof at the Waltham Abbey Swimming Pool.  Consultations were currently commencing and once a decision had been made, the position regarding the carry forward would be clearer. There was a slight overspend on the new development schemes and this had been due to feasibility work being carried out at Oakwood Hill, thus a brought forward had been recommended.

Within the Environment and Street Scene Directorate, the waste management vehicles and equipment budget for the provision of the new food and recycling system had been underspent by £28,000.  This related to the purchase of new bins and recycling containers for flats, schools, places of worship, village halls etc.  There had also been delays in progressing work on the parking reviews by Essex County Council, which had resulted in an underspend in 2012/13. Both these had been recommended to be carried forward into 2013/14.  There were two schemes relating to North Weald Airfield, one being the purchase of a vehicle to replace the old vehicle and the second being the infrastructure improvements works carried out on the market site.  The vehicle had been purchased at a lower cost than anticipated, thus generating a saving, however the market improvements had incurred an overspend which had been recommended to be brought forward from the budget in 2013/14.  The expenditure had been met from contributions made by the market operators.

The budget which experienced the greatest volume of slippage on the HRA had been the service enhancement budget, which had been underspent by £139,000. The new initiative had taken place in 2012/13 and took longer than expected to identify and progress some of the projects, for example planned software systems had been delayed and some DDA conversion works and installations of smoke alarms had taken longer than anticipated. In addition to this, environmental works of £66,000 had been delayed, in particular the off street parking and external lighting schemes. To compensate for these underspends; work to the value of £200,000 on heating systems had been carried out ahead of target. Changes in safety regulations relating to vertical flues prompted the need to accelerate the work on certain gas heating systems. Consequently, expenditure relating to these works had been brought forward and retrospective approval had been sought from Members.

The situation with regard to capital receipts in 2012/13 proved to be slightly lower than had been anticipated. This had been due to receipts from council house sales being lower than expected with 13 houses being sold as opposed to the 15 sales anticipated.  In contrast, General Fund capital receipts had been higher than expected; largely due to a compensation payment received relating to a scheme on the M25.  As the use of capital receipts had been lower than anticipated the balance on the Capital Receipts Reserve had been £13,899,000 as of 31 March 2013; this being £184,000 higher than projected.

Decisions:

(1)        That the provisional outturn report for 2012/13 be noted;

(2)        That retrospective approval for the over and underspends in 2012/13 on certain capital schemes as identified in the report be recommended to Cabinet for adoption;

(3)        That approval for the carry forward of unspent capital estimates into 2013/14 relating to schemes on which slippage has occurred be recommended to Cabinet for approval; and

(4)        That retrospective approval for changes to the funding of the capital programme in 2012/13 be recommended to Cabinet for approval.

Reason for Decision:

The funding approvals requested were intended to make best use of the Council’s capital resources that were available to finance the Capital Programme.

Other Options Considered and Rejected:

More of the HRA capital expenditure in 2012/13 could of been financed from the application of usable capital receipts. This option was rejected because the Direct Revenue Funding (DRF) level, previously referred to as Revenue Contributions to Capital Outlay (RCCO), suggested in the report and was affordable within the HRA, according to current predictions, and greater use of usable capital receipts for HRA purposes would of had the effect of reducing scarce capital resources available for the General Fund.