Agenda item

To receive a report by the Head of Operations in order for the Cabinet to approve the Capital Programme 2015/16.

That the Capital Programme 2015/16 as attached to the officer’s report be approved and until the Treasury and Capital Management Group is established that all business cases be agreed by the relevant Executive Councillor prior to submission to the Finance Governance Board.

The Cabinet gave consideration to a report (a copy of which is appended in the Minute Book) regarding the Capital Programme for 2015/2016, having been reviewed by the Finance Governance Board. 

It was explained that the Capital Programme was usually approved at the same time as the budget.  However, following an audit report the Finance Governance Board was established to review the capital projects. 

A new scoring mechanism, based on methodology from The Chartered Institute of Public Finance and Accountancy (CIPFA) had been used to assess all Capital Projects taking into account the impact of the Minimum Revenue Provision (MRP).

The Cabinet were referred to the Appendices attached to the report which included the capital projects that had been submitted and assessed, those projects recommended for approval and the scoring matrix used to assess the bids.

The bids submitted for assessment totalled £11.065m and the Finance Governance Board had recommended that £9.637m of those be approved. The 2016/2017 approved budget included a MRP of £1.905m and the recommended Capital Programme had reduced the amount to £1.776m.  Thereby creating a budget saving.

All capital funding had an effect on the revenue budget which was reflected in the budget as MRP and the cost of internal borrowing.  It was therefore important that when approving any capital that there was regard to both the MRP and the cost of internal borrowing.  It was considered that the Capital Programme was affordable for 2015/2016 and supported the Council’s Corporate Plan.

Some of the submitted bids considered by the Finance Governance Board had been returned to the relevant Head of Service due to insufficient information or were generic and did not refer to a specific scheme.  Although other bids were considered a high priority, based on the evidence provided, it was decided that these could be reduced in order to provide potential in the Programme for priority in-year bids and still remain within the affordability envelope of the MRP.

The Executive Councillor for Resources explained that there was currently a review scheduled of the constitution and financial governance provisions where it would be proposed that a Member-led Treasury and Capital Management Group be established.  The Executive Councillor for Resources requested, and the Cabinet agreed, that prior to the establishment of this Group in the interim when a business case was completed the officer was to seek the agreement of the relevant Executive Councillor prior to its submission to the Finance Governance Board.

In response to questions the Cabinet were informed that the Capital Programme did not provide approval to spend as each Project was subject to a business case.  However, within the Capital Programme contained a list of ‘existing commitments’ which were committed projects that already had contracts.

The Cabinet were further advised that the Projects contained within the Capital Programme had already been assessed against the Council’s Corporate Plan during the scoring stage.

Reference was made to the legal implications contained within the report and that the Council could be seen to not be fulfilling its legal duty in respect of funding the full requirement for Disabled Facility Grants.  In response the Cabinet were assured that the Council was meeting the minimum legal requirement and that to satisfy the full demand for Disabled Facility Grants would prove difficult for the Council.

The Cabinet considered the views of the Overview and Scrutiny Panel (Economic Well-Being) and the Chairman of the Panel, having been invited to address the Cabinet, explained that at the Panels request the Members had received details of the scoring model used to assess the projects.  Overall the Panel considered the new scoring method to be professional and complemented the Project Management model.

In conclusion the Cabinet, 

RESOLVED

that the Capital Programme 2015/16 as attached to the officer’s report be approved and until the Treasury and Capital Management Group is established that all business cases be agreed by the relevant Executive Councillor prior to submission to the Finance Governance Board.