Agenda item

Capital Programme Update - Quarter 3 Report 2021-22


The Chief Officer – Finance, Performance and Change presented a report in respect of the above, the purpose of Which was to:


·          comply with the requirement of the Chartered Institute of Public Finance and Accountancy’s (CIPFA) ‘The Prudential Code for Capital Finance in Local Authorities (2017 edition)

·          provide an update of the capital position for 2021-22 as at 31 December 2021 (Appendix A of the report)

·          seek approval for a revised capital programme for 2021-22 to 2030-31 (at Appendix B)

·          note the projected Prudential and Other Indicators for 2021-22 (Appendix C).


The report outlined certain background information, following which it detailed the current position that provided Members with an update on the Council’s capital programme for 2021-22 since it was last approved by Council and incorporated any new schemes and grant approvals. The revised programme for 2021-22 currently totalled £49.603 million, of which £28.495 million is met from Bridgend County Borough Council (BCBC) resources, including capital receipts and revenue contributions from earmarked reserves, with the remaining £21.108 million coming from external resources, including Welsh Government General Capital Grant.


Table 1 in the report showed the capital programme for each Directorate from the October 2021 (quarter 2) approved Council position to quarter 3. This reflected a slippage to future years, of just over £30m.


Table 2 in paragraph 4.2 of the report, summarised the current funding assumptions for the capital programme for 2021-22. This may include the realignment of funding to maximise government grants, confirmed the Chief Officer – Finance, Performance and Change.


Appendix A to the report, provided details of the individual schemes within the capital programme, showing any new approvals, virements and the slippage so referred to in respect of the revised budget for 2021-22.


Paragraph 4.4 of the report, showed the individual schemes that were subject to slippage to future years and the Chief Officer – Finance, Performance and Change gave a resume of these for the benefit of Council.


Since the last capital report approved by Council in October 2021, there have been a number of new externally funded schemes approved and internally funded schemes, which have been incorporated into the capital programme. Details of each of these were shown in paragraph 4.5 of the report. There were a number of other schemes within the capital programme awaiting confirmation of external funding over the winter period. Some of these schemes may also require re-profiling, she added. The revised Capital Programme was attached at Appendix B to the report.


The next part of the report, gave details regarding Prudential and Other Indicators for 2021-22 and the monitoring of these.


The Chief Officer – Finance, Performance and Change explained that in terms of the borrowing of any monies, the Council would not be pursuing this in the short term, but rather use its short-term reserves for this purpose. However, the borrowing of money going forward would continue to be evaluated and monitored.


Appendix C to the report, gave details of the actual indicators for 2020-21, the estimated indicators for 2021-22 set out in the Council’s Capital Strategy and the projected indicators for 2021-22, based on the revised Capital Programme. These reflected that the Council was operating in line with approved limits.


With regard to Capital Strategy Monitoring, the Council had a number of other long-term liabilities which were included within the Capital Strategy, such as the Maesteg School Private Finance Initiative (PFO), as well as lease arrangements for the Innovation Centre, the Authority’s Waste Contract and a Welsh Government energy efficiency loan.


The Deputy leader confirmed that he welcomed the report and in particular, the works proposed at Bryncethin Depot to support the use going forward of electronic vehicles.


A Member made the point that in relation to the new School at Maesteg being built through the allocation of PFI monies, this was an expensive way by which to construct the school. With there being low interest rates presently, he asked of there was any way the Council could withdraw from the Agreement, that may then benefit the Authority financially speaking.


The Chief Officer – Finance, Performance and Change was not aware of the full history of this scheme, however, she was aware that the provision of the school had been negotiated and agreed through a long term agreement and should we seek to withdraw from this agreement now, then this would change the contractual arrangements of the agreement that would inevitably result in some significant penalty costs being awarded against the Council.


The Leader advised that this had been explored previously in the last 18 months and it had been established that there would be no financial benefit to the Authority if it withdrew from the PFI Agreement. The Deputy Leader concurred with this, adding that the Council had still secured a cost-effective way of purchasing the new school.


A Member stated that he was pleased to see some of the new schemes that were proposed as part of the Capital Programme, in particularly, the new Pencoed Road Bridge/Rail Crossing Scheme as part of the Metro Plus Local Transport Fund, presently out for public consultation. He asked what the funding had been committed to so far, as he was aware that funding of £150k and been initially invested, with £47k of this being spent to date.


The Corporate Director – Communities, advised that the scheme at Pencoed had been estimated to cost around £17m and this would be sought from the Levelling-Up Fund. Presently the Council were working on the design of the bridge with key stakeholders, with a bid being made by June of this year. She stressed however, that the works required would then take approximately three years to complete, as these affected the main railway line to London. The initial funding had been committed through the Cardiff City Deal Regional Fund, with then the major part of the funding coming from Central Government, ie the Levelling-Up Fund.


The Cabinet Member – Communities added, that £17m was an estimate cost at present, that could in reality end up being a conservative estimate of costs.


A Member noted that there was a slippage in the sum of just over £30m going into the next financial year, as a result of the pandemic etc, which he conceded was to a degree understandable, given the pressures that local authorities had faced in the last two years. He asked how this slippage compared with previous years. He also welcomed the news that Welsh Government were committing £2.65m of funding to support previous work undertaken in homes of residents in the Caerau Ward and he asked if the Council should also be adding to this funding through its Capital Programme allocation.


In terms of the slippage comparisons for this year into next and comparisons with previous years, the Chief Officer – Finance, Performance and Change advised that she would look into this comparison outside of the meeting and in turn feed this back to the Member accordingly. Any changes to the Capital Programme, would be proposed by Cabinet in the usual way then presented to full Council following this, for determination.  


RESOLVED:                         That Council:-


(1)  Noted the Council’s Capital Programme 2021-22 Quarter 3 update to 31 December 2021 (at Appendix A to the report)

(2)  Approved the revised Capital Programme (at Appendix B)

Noted the projected Prudential and Other Indicators for 2021-22 (Appendix C)  

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