Agenda item

(Director of Resources) to consider the attached report.

The Senior Accountant, John Bell took the Committee through the report on the provisional capital outturn for 2015/16, in terms of expenditure and financing compared with the revised estimates.

The Committee noted that:

·         The Council’s total investment on capital schemes and capital funded schemes in 2015/16 was £37,298,000 compared to a revised estimate of £49,917,000, representing an underspend of 25%;

·         Within the Resources Directorate, there were two large underspends of £306,000 and £151,000 on the planned maintenance programme and the upgrade of the industrial units at Oakwood Hill respectively;

·         Of the 27 projects scheduled to be undertaken within the Council’s planned maintenance programme, 14 were fully completed or nearly completed at a cost of £856,000. However, delays had been experienced on the remaining 10 schemes, most of which related to the civic offices at Epping;

·         It was recommended that the full £306,000 underspend was carried forward for these 10 projects;

·         The Information and Communication Technology (ICT) Programme progressed very well and 15 schemes were completed successfully in 2015/16. Capital expenditure totalled £311,000, compared to a revised budget of £315,000;

·         Progress on the new Shopping Park at Langston Road has been delayed, partly due to the need to re-tender the contract for the main construction works, and partly due to hold ups on the Section 278 highways work as a result of some very restrictive traffic management constraints imposed by Essex County Council after the tenders were submitted. Approval was sought to carry forward £2,076,000 to 2016/17 to continue the project;

·         Although the construction of the new depot at Oakwood Hill had progressed well since it started last September, some slippage had been experienced on this scheme. A carry forward of £503,000 was therefore recommended to complete the scheme early in 2016/17;

·         The major investment within the Communities Directorate had been the extension and refurbishment of the Council’s museum. Practical completion of the building works was achieved in December 2015 and the new facility was opened to the public in March 2016. The cost of the project was higher than originally estimated and the budget had been increased to allow for this. It was considered prudent to carry forward the underspend of £20,000 to 2016/17;

·         The approved HRA capital budget for 2015/16 was increased compared to previous years to provide for the Council’s housebuilding programme. A revised budget of £17,349,000 was approved but expenditure during the year totalled £13,811,000, representing an underspend of £3,538,000 or 20%;

·         A large underspend of £1,123,000 was on kitchen and bathroom replacements. This was primarily due to much lower numbers of replacements being undertaken on void properties. This was because kitchens and bathrooms were only replaced if deemed necessary and, as many void properties had already had replacements under the planned programme, works on voids had reduced;

• The second largest underspend was experienced on the new house building and conversions program. The Marden Close and Faversham Hall conversions were completed in November 2015 and all flats had been let. However, construction work had been delayed due to difficulties with the main contractor at the 4 sites within phase 1 of the new housebuilding programme and a carry forward of the full £1,069,000 underspend was sought to complete works at these sites;

·         With regard to the Capital Loans provided to third parties by the Council, these were more or less on target. The loan to the Council’s waste management operator went ahead as planned and a monthly repayment schedule has been agreed; and

·         Although the total value of loans made to individuals to improve private housing stock was lower than anticipated, demand increased in 2015/16 to £119,000 compared to £65,000 the previous year. Given the upward trend, it was recommended that the £41,000 underspend was carried forward to 2016/17.

Councillor Sartin asked if the bathrooms and kitchens were not to be replaced, was that because they had been replaced by previous tenants? Mr Bell replied that as people moved out their property was updated, we were now seeing more properties that had good bathrooms and kitchens.

Councillor Bedford asked if we could claim against the County Council for the delay they caused. He was told that we could not. We have tried to engage with them and get some feedback. They did promise to engage with our contractors before a tender was issued but this did not happen. Finally they came to us and upped the specifications and put in restrictions on the hours of working so as to cause less disruption on the site. Also, where there were highways works scheduled, the County Council should part-fund them but they now maintain that they have no plans to repair the roads around this area. It should be noted that Chelmsford had also encountered problems dealing with the County Council highways service.

Councillor Bedford asked if a joint letter with Chelmsford could be sent to the leader of Essex CC expressing our disappointment with the problems we were encountering with Essex Highways. The Director of Resources said he would put this suggestion to his Neighbourhood Directorate colleagues who deal with this scheme.

Councillor Kane asked about the contract for the housebuilding project; would that start by the end of July? He was told that the new contract had not been let as yet – Housing have put this to another contractor and are currently having discussions with them.

RESOLVED:

That the Select Committee noted and agreed the recommendations of the provisional Capital Outturn (2015/16) report.