Decision details

(Cabinet Member with Special Responsibility Councillor Roger Mace)

(Mark Cullinan declared a personal interest in that part of the report that referred to Luneside East)

The Corporate Director (Finance and Performance) and Head of Financial Services presented a joint report that provided the latest information on the General Fund capital position for both current and future years, to allow Cabinet to make progress in developing its capital investment proposals and the supporting Investment Strategy. 

The options, options analysis, including risk assessment, were set out in the report as follows: 

Funding Assumptions and Achieving a Balanced Capital Programme

The broad options for achieving a balanced programme are set out below and are very much dependent on Members’ views on spending priorities.  As such, a full options appraisal and risk assessment cannot be completed until budget proposals are known in more detail.  That said, the basic options include:

-            removing schemes from the draft programme, taking account of service needs and priorities;

-            reducing proposed net expenditure on schemes, where possible;

-            generating additional capital resources (e.g. receipts, direct revenue financing or borrowing), within affordable limits.

-            deferring projects into later years – although this would not help with the overall five-year programme unless schemes were deferred until after 2012/13.

As referred to in earlier reports, setting a balanced Capital Programme is an iterative process, essentially balancing service delivery impact and aspirations against what the Council can (and is prepared to) afford.

In deciding the way forward, Cabinet is asked also to take into account the relevant basic principles of the Prudential Code, which are:

-          that the capital investment plans of local authorities are affordable, prudent and sustainable, and

-          that local strategic planning, asset management planning and proper options appraisal are supported.

Noting the Actions of the Head of Financial Services regarding Vehicle Acquisitions

The only alternative option would be to defer noting the actions, pending receiving further information. 

The Officer preferred options were as set out in the recommendations of the report. 

It was moved by Councillor Roger Mace and seconded by Councillor Evelyn Archer: -

“That the recommendations, as set out in the report, be approved.“

Members then voted as follows:

Resolved:

(8 Members (Councillors Evelyn Archer, June Ashworth, Eileen Blamire, Abbott Bryning, John Gilbert, Tony Johnson, David Kerr and Roger Mace) voted in favour and 2 Members (Councillors Jon Barry and Maia Whitelegg) abstained from voting

(1)     That the draft Capital Investment Strategy be updated to reflect the changes in financing assumptions, as outlined in sections 1.1 to 1.5 of the report. 

(2)     That Cabinet notes the delegated actions of the Head of Financial Services with regard to the funding of vehicle acquisitions as outlined in section 1.4 (iii) of the report. 

(3)     That Cabinet notes the latest position regarding the General Fund Capital Programme and funding assumptions from 2007/08 onwards, together with the work ongoing, and takes action to ensure that a fully balanced Programme is presented for Cabinet’s consideration at the February meeting, for subsequent referral on to Council. 

(4)     That the draft Treasury Strategy for 2008/09 and associated Prudential Indicators be updated in line with the above recommendations. 

Officers responsible for effecting the decision:

Corporate Director (Finance and Performance). 

Head of Financial Services. 

Reason for making the decision:

The decision is based on the information and outline options for Cabinet to consider in formulating its proposals for a balanced Capital Programme to 2012/13 in line with the Prudential Code.  The decision allows Cabinet to present to Council in February its Capital Programme proposals in line with the agreed timetable. 

The investment needed in Council owned buildings and facilities represents a major call on resources, and that opportunities may exist for generating significant capital receipts, but further work is needed to ensure that the final proposals to Council are prudent, affordable and financially sustainable.