The Interim Chief Officer Finance, Performance and Change presented a report to comply with the requirement of the Chartered Institute of Public Finance and Accountancy’s (CIPFA) Prudential Code for Capital Finance in Local Authorities; provided an update on the capital outturn for 2019-20; provided an update of the Capital Programme for the period 1 April to 30 June 2020; sought approval for a revised capital programme for 2020-21 to 2029-30 and for Council to note the projected Prudential and Other Indicators for 2020-21.

The Interim Chief Officer Finance, Performance and Change reported that Council on 20 February 2019, approved a capital programme of £35.474m, which was last updated on 26 February 2020 and which had been further revised and approved by council during the year to incorporate budgets brought forward from 2018-19 and any new schemes and grant approvals.  She stated that the most recent programme for 2019-20, approved by Council in February 2020 as part of the Medium Term Financial Strategy, totalled £30.137m, of which £13.964m is met from BCBC resources, including capital receipts, revenue contributions from earmarked reserves and borrowing, with the remaining £16.173 million coming from external resources.   

The Interim Chief Officer Finance, Performance and Change informed Council that few amendments had been made other than new approvals of £1.964m as a result of a new grant scheme from the Welsh Government - the Hwb Infrastructure Grant and £0.403m funding brought back from 20-21 to more reflect more accurately the spend profiles, which brought the revised budget to £32.504m.  She informed Council that total expenditure as at 31 March 2020 was £22.822m, resulting in a total under spend of £9.682m. During the year a number of schemes have commenced but not been completed during the year, or have been moved wholly into 2020-21. These include the refurbishment of Waterton Depot, Bridge Strengthening at the A4061 Ogmore Valley, City Deal and regeneration works at Llynfi Valley.  She stated that slippage has arisen due to a number of reasons

including delays in starting projects due to the need to undertake more detailed survey works, ongoing discussions with funding bodies and other general programme delays.  There was also likely to be significant slippage during 2020-21 as a consequence of the Covid-19 lockdown and subsequent regulations on social distancing.  

The Interim Chief Officer Finance, Performance and Change informed Council that net slippage into 2020-21 of £9.073 million was required, the main schemes being:

·         £2,246,000 in respect of the Llynfi Development – Welsh Government has agreed an extension to the loan of 6 months to enable the Council to undertake further feasibility work

·         £908,600 of funding for minor capital works has slipped due to the delay in completing a number of schemes

·         £564,000 in respect of the Children’s Residential Hub due to delays in finalising funding approval

·         £471,000 in respect of Bridge Strengthening. Substantial elements of the works were delayed by the utility company and as such many elements of the contract spend were deferred until later within the revised contract period.

·         £582,000 in respect of the Enterprise Hub due to the project being reprofiled and reconfigured in 2020-21

·         £520,000 in respect of Digital Transformation whilst the digital strategy has been developed, to ensure the development is taking into account the effects of Covid -19 and how digital can support the Council in terms of its operational model

·         £320,000 in respect of 21st Century Schools Band B. New schemes are currently at feasibility stage

·         £260,000 in respect of Maesteg Town Hall due to delays, and changes to funding profiles as a result of the Council maximising additional grant funding during 2019-20.

The Interim Chief Officer Finance, Performance and Change reported on an update on the Council’s capital programme for 2020-21 since the budget was last approved by Council which incorporated any new schemes and grant approvals.  The revised programme for 2020-21 currently totalled  £62.305m, of which £40.313m is met from the Council’s resources,

including capital receipts, revenue contributions from earmarked reserves and borrowing, with the remaining £21.992 million coming from external resources, including General Capital Grant. The Interim Chief Officer Finance, Performance and Change highlighted the position by each Directorate.  She summarised the current funding assumptions for the capital programme for 2020-21 and that capital resources are managed to ensure that maximum financial benefit for the Council is achieved, which may include the realignment of funding to maximise government grants. 

The Interim Chief Officer Finance, Performance and Change reported on a number of amendments made to the capital programme for 2020-21 as follows:

• 21st Century Schools Band B
• Mynydd Cynffig Primary School – Mobile Classrooms
• Installation of Electric Vehicle Charging Points (EVCPs)
• Children’s Residential Accommodation Hub
• Bryncethin Depot
• Bridgend Enterprise Hub
• Community Recycling Centre (CRC), Village Farm Industrial Estate, Pyle
• Western Valley Empty Homes Pilot

The Interim Chief Officer Finance, Performance and Change also reported on the monitoring of Prudential and other indicators for 2020-21 to 2022-23 together with some local indicators.  The Capital Strategy is intended to give an overview of how capital expenditure, capital financing and treasury management activity contribute to the provision of services along with an overview of how associated risk is managed and the implications for future sustainability.  A number of prudential indicators were included, and approved by Council.  In line with the requirements of the Prudential Code, the Chief Finance Officer is required to establish procedures to monitor both performance against all forward-looking prudential indicators and the requirement specified.  She detailed the actual indicators for 2019-20, the estimated indicators for 2020021 set out in the Council’s Capital Strategy and the projected indicators for 2020-21 based on the revised Capital Programme, which shows that the Council is operating in line with the approved limits.

The Interim Chief Officer Finance, Performance and Change reported that the Capital Strategy also requires the monitoring of non-treasury management investments and other long term liabilities.  She stated that the Council does have an existing investment portfolio which is 100% based within the County Borough and primarily the office and industrial sectors.  Income streams are spread between the single and multi-let office investments on Bridgend Science Park, the multi-let industrial estates and the freehold ground rent investments.  The total value of Investment Properties was £4.635 million at 31 March 2020.  She informed Council that it has a number of Other Long Term Liabilities included within the Capital Strategy.

The Deputy Leader informed Council that this was a very challenging time for the Council which had resulted in slippage to a number of schemes.  He stated that emergency powers had to be used to amend the capital programme to authorise expenditure of £1.2m for the provision of temporary classrooms and to undertake infrastructure works on sections of the main school building that are required to be retained and kept in use (e.g. hall and kitchen) at Mynydd Cynffig Primary School.     

A member of Council was pleased to note the emergency funding of works to Mynydd Cynfiig Primary School, which due to the serious identified to the condition of the school posed a health and safety risk to pupils and staff.  The member thanked the Council on behalf of the pupils, staff and governing body for the speed of which temporary classrooms and infrastructure works were authorised.

RESOLVED:            That Council:

·         Noted the capital outturn for 2019-20;

·         noted the Council’s Capital Programme for 2020-21 Quarter 1 update to 30 June 2020;

·         approved the revised Capital Programme;

·         noted the projected Prudential and Other Indicators for 2020-21.