Agenda item

Capital Programme 2022-25

Minutes:

The report before Full Council set out the final Capital Programme for 2022-23 and the Medium-Term Financial Plan for North Northamptonshire Council. The draft budget proposals were considered by the Executive on 23rd December 2021.

 

The budget consultation period commenced on 23rd December 2021 and ended on 28th January 2022. The draft budgets had been subject to scrutiny by the Finance and Resources Scrutiny Committee. The consultation provided residents, local partners and other stakeholders the opportunity to review the budget proposals and provide feedback during the five-week consultation period. The final budget proposals were reported to the Executive at their meeting on 10th February 2022.

 

The report set out the baseline Capital Programme and identified the key factors and challenges influencing the development of North Northamptonshire Council’s future commitments for 2022-23 and beyond.

 

The report presented the General Fund Capital Programme for 2022-25, the Baseline Development Pool and the Housing Revenue Account (HRA) Capital Programme 2022-25.

 

The key principles underpinning the current Capital programme were detailed in the report and included: -

·         The delivery of a Medium-Term Capital Programme which was affordable and sustainable, ensuring that the Council’s internal resources and application of external borrowing were utilised to fund capital expenditure where it supported the delivery of the Council’s financial sustainability and where there were statutory requirements such as health & safety;

·         New capital investment would only be permitted where it contributed to the achievement of the Council’s corporate priorities;

·         The use of external funding was prioritised against the areas of greatest need, in the main supporting highways maintenance, the delivery of education places, Super-Fast Broadband and Homelessness Prevention. Priority would be given to schemes that also delivered transformation and/or revenue savings;

·         Maximisation of the use of the Council’s assets, and where possible working with local partner organisations to maximise the efficiency of assets across the public sector and North Northants;

·         Take into account external influences such as the South East Midlands Local Enterprise Partnership, Oxford Cambridge Arc, Health and joint working with other partner authorities;

·         Key integration and links with the Council’s other corporate strategies including Corporate Plan, Treasury Management, Investment Strategy, and Asset Management Plan;

·         Set out the Council’s regeneration and economic development ambition and additional objectives;

·         Set out the governance and risk management arrangements.

 

The current Capital Strategy demonstrated how the Council would make expenditure and investment decisions in line with service objectives and properly take account of stewardship, value for money, prudence, sustainability and affordability. It set out the key objectives and broad principles to be applied by the Council when considering capital investment and its funding and provided the context for how the Medium-Term Capital Programme sought to support the realisation of the Council’s vision and corporate objectives. The Strategy also provided details of the Council’s planned future capital programme and capital funding expectations.

 

It was noted that the current Capital Strategy and the key principles had been developed with reference to the requirements of the current Prudential Code and Treasury Code of Practice. CIPFA consulted earlier in the year on the principles to support the changes to the Prudential Code for Capital Finance in Local Authorities (Prudential Code) and the Treasury Management in the Public Services Code of Practice and Cross-Sectoral Guidance Notes (Treasury Management Code). The consultation closed on 16 November 2021 and the revised code was issued on 20th December 2021. This had been considered when updating the Council’s Treasury management Strategy for the reports to Executive and was expected to be fully implemented by 2023/24.

The key principles underpinning the Capital Strategy in compiling the Capital programme were as follows: -

·         The delivery of a Medium-Term Capital Programme which was affordable and sustainable, ensuring that the Council’s internal resources and application of external borrowing were utilised to fund capital expenditure where it supported the delivery of the Council’s financial sustainability and where there were statutory requirements such as health & safety;

·         New capital investment would only be permitted if it contributed to the achievement of the Council’s corporate priorities;

·         The use of external funding was prioritised against the areas of greatest need, in the main supporting highways maintenance, the delivery of education places, the Corby Town Plan and Tresham Garden Village within North Northants. Priority would be given to schemes that also delivered transformation and/or revenue savings;

·         Maximisation of the use of the Council’s assets, and where possible working with local partner organisations to maximise the efficiency of assets across the public sector and North Northants;

·         Take into account external influences such as the South East Midlands Local Enterprise Partnership, Oxford Cambridge Arc, Health and joint working with other partner authorities;

·         Key integration and links with the council’s other corporate strategies including Corporate Plan, Treasury Management, Investment Strategy, Asset Management Plan;

·         Set out the Council’s regeneration and economic development ambition and additional objectives;

·         Set out the governance and risk management arrangements.

The Capital Strategy outlined the Governance Structure for approving new capital schemes. New capital investment would only be permitted if it contributed to the achievement of the Council’s strategic priorities. The use of external funding would be prioritised against the areas of greatest need within the North Northants area, in the main supporting highways maintenance and the delivery of education places. Priority would be given to schemes that delivered transformation that the Council was aiming to deliver generating revenue savings or income streams to support the MTFP. An updated strategy was shown in Appendix D.

The Baseline Programme had been put together by taking the already approved schemes in year and the schemes already approved from the Medium-Term Capital Programme by Executive in February 2021. This had resulted in a Total Capital Programme of £75.1m (General Fund £37.0m, HRA £38.1m) over the three-year period, which comprised: -

·         A General Fund Baseline Programme totalling £37.0m including the completion of key projects including the Stanton Cross Primary School, and extensions, highways schemes and various property and environmental projects across North Northants;

·         A HRA Baseline Programme totalling £38.1m across Kettering and Corby grouped into statutory and priority works, decent homes, health, safety and compliance works, pre-planned stock investment, and enhancements and a significant investment of nearly £21.8m for the Housing Development and New Build Programmes; and

·         A Development Pool totalling £81.8m and the prioritisation of 24 key schemes against the associated funding streams making up the Pool. This showed key highways infrastructure projects (A509 bypass and A43 improvements) into 2025-26 based on the current phasing and funding. The key themes were Children’s Services including Basic Needs, increasing capacity for pupil numbers, schools’ maintenance, looked after children’s placements and fostering support, Place including highways maintenance, new road or extension schemes, cycleways, flood alleviation, regeneration and economic development projects and property asset management, adults’ community equipment and Corporate Projects mainly corporate IT and service systems.

The disaggregation of the capital assets, balances and debt were still to be finalised and subject to audit of the 2020-21 financial accounts for Northamptonshire County Council.

 

The Minimum Revenue Provision (MRP) reflected the minimum amount a Council must charge to the revenue budget each year to set aside a provision for repaying external borrowing. The increase in the MRP provision of £1.549m for 2022/23 was to ensure the provision was aligned to the MRP policy moving into the medium term. This formed part of the Treasury Management Strategy.

The Public Works Loan Board would no longer lend to local authorities that planned to buy commercial assets primarily for yield. PWLB would still be available to all local authorities for refinancing. To borrow from the PWLB, local authorities would now be required to submit a summary of their planned capital spending and PWLB borrowing for the following three years including a commentary outlining the expenditure plans of the Council.

The capital programme assumed various sources of funding including capital receipts and grants, together with support from external/internal borrowing, which was at the discretion of the Council for essential capital expenditure.

 

Councillor Bunday formally MOVED the recommendations detailed in the report. Councillor Levell formally SECONDED the recommendations detailed in the report.

 

Councillor Colquhoun on behalf of the Labour Group and Councillor Fedorowycz on behalf of the Green Alliance Group provided a response to the presentation of the report.

 

The Chair invited Councillor J McGhee on behalf of the Labour Group to move amendments relating to the report. Councillor Addison seconded these. The amendments include a proposal to set money aside to switch some streetlights back on and for the installation of new streetlights based upon the recommendations from the Community Safety Team. In addition, there was a proposal to expedite the creation of a new children’s home within Northamptonshire, to reduce the necessity of children having to be accommodated outside of the county.

 

The proposed amendments were put to the vote. The amendments fell.

 

The Chair invited Councillor Fedorowycz on behalf of the Green Alliance Group to move amendments to the report. Councillor Hakewill seconded these. These included proposals relating to the electrification of the Council’s vehicle fleet.

 

The proposed amendments were put to the vote. The amendments fell.

 

Members then debated the substantive recommendations.

 

The recommendations had previously been MOVED by Councillor Bunday and SECONDED by Councillor Levell.

 

RESOLVED that: -

 

1.         The General Fund Capital Programme 2022-25, Baseline Development Pool and Housing Revenue Account (HRA) Capital Programme 2022-25 be approved.

 

Supporting documents: