Agenda item

(Director of Resources) To consider the attached report (FPM-002-2015/16).

The Assistant Director (Accountancy) advised the Committee that the report set out the Council’s capital programme for 2014/15, in terms of expenditure and financing, and compares the provisional outturn figures with the revised estimates. The revised estimates, which were based on the Capital Programme, represent those adopted by the Council in February 2015.

The Assistant Director (Accountancy) stated that the Council’s total investment on capital schemes in 2014/15 was £20,114,000, compared to a revised estimate of £24,092,000. The total carry forwards requested in the General Fund totalled £2,555,000 and £1,540,000 on the HRA Capital Programmes; with the largest underspends on the General Fund relating to £1,000,000 on the St John’s Road Development Scheme, £448,000 on the Museum redevelopment scheme and £557,000 on the Planned Maintenance Programme and on the HRA relating to £436,000 on the New House Building and Conversions and £501,000 on the Kitchen and Bathroom Replacements.

In summary, Members were requested to recommend to Cabinet the approval of the budget overspends savings, carry forwards and brought forwards. Overall, there were budget savings of £2,000 on the General Fund; £1,000 on the HRA; and £7,000 on Revenue Expenditure Financed from Capital under Statute. There were also two overspends totaling £11,000 on the General Fund. The total carry forwards requested were £2,555,000 on the General fund; £1,540,000 on the HRA capital programme; £175,000 on Capital loans and £4,000 on REFCuS respectively. Sums brought forward from 2015/16 include a total of £44,000 on the General Fund and £173,000 on the HRA. Members were also asked to approve the other amendments of £22,000 on the General Fund and £100,000 on REFCuS.

With regard to the use of direct revenue funding, the HRA contribution of £5,200,000 was in line with the revised budget. However, the use of funds from the Major Repairs Reserve was £1,199,000 lower than estimated reflecting the underspend on HRA capital schemes. The impact of this, combined with an increase in the Major Repairs Allowance transfer, was that the balance on the Major Repairs Reserve was £1,474,000 higher than expected at £11,124,000 as at 31 March 2015.

RESOLVED:

(1)                  That the provisional outturn report for 2014/15 be noted;

(2)                  That retrospective approval for the over and underspends in 2014/15 on certain capital schemes as identified in the report be recommended to Cabinet;

(3)                  That approval for the carry forward of unspent capital estimates into 2015/16 relating to schemes on which slippage has occurred be  recommended to Cabinet;

(4)                  That approval for bringing forward allocations from 2015/16 in respect of a small number of capital schemes on which  expenditure has been incurred ahead of schedule be recommended to Cabinet; and

(5)                  That approval of the funding proposals outlined in this report in respect of the capital programme in 2014/15 be recommended to Cabinet.

Reasons 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:

The Council’s current policy was to use all HRA capital receipts from the sale of assets other than Right to Buy Council House sales to fund the Council's house building programme. However, Members had the option to use these capital receipts for other HRA or General Fund schemes if they chose. This option has been rejected to date because, unless HRA receipts were applied to affordable housing schemes, 50% of each receipt would be subject to pooling i.e. the council would have to pay 50% of these receipts to central government.

Another option would be to finance more of the 2014/15 HRA capital expenditure from 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 this report 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.