Decision details

The Executive Councillor will recommend the strategy to Council. (Item to be considered by Council on 25 February 2021.)

Matter for Decision

This report presents the capital strategy of the council together with a summary capital programme for the General Fund (GF) and Housing Revenue Account (HRA). The previous capital strategy was approved by the council on 25 February 2020. The strategy is focused on providing a framework for delivery of capital expenditure plans over a 10-30 year period.

 

Decision of the Executive Councillor for Finance and Resources

 

i.      To recommend Council approved the Capital Strategy as set out in the officer report.

ii.               Noted the summary capital programme

 

Reason for the Decision

As set out in the Officer’s report.

 

Any Alternative Options Considered and Rejected

Not applicable

 

Scrutiny Considerations

The Committee received a report from the Head of Finance.

 

The Committee made the following comments in response to the report:

i.      Noted the report proposed the end of revenue funding of capital programme, which was a substantial change. Questioned the financial impact of borrowing over time and if there would be a burden on the revenue budget.

ii.      Noted commitment to building 1000 new council homes to Passivhaus standards but only where this was feasible.

iii.   Referred to ‘Doughnut economics’ which looked at what helped address economic issues and what was sustainable.

iv.  Referred to the Asset Management Plan and noted that maintenance did not appear to be done on a regular basis and commented this could lead to increased costs and carbon foot print by the time the works were completed.

v.    The New Homes Bonus used to be seen as funding for capital development but not anymore.

vi.  Thanked the Finance Team as they had maintained the Council in a good financial position so felt a new approach could be tried.

vii.Asked what could be done to encourage development of officers especially Planning Officers.

 

In response the Head of Finance said the following:

i.      Agreed that there was a fundamental change to the way the council would fund its capital programme however it created a revenue saving to the council, £2.3 million would be returned to the revenue budget for service delivery. There would be a number of capital receipts totalling £25 million in the next 5 - 10 years. Work had been undertaken with services to identify capital works although this would need to be revisited and extended. Where borrowing would increase the revenue pressure, this would be reviewed at the Medium-Term Financial Strategy.

ii.    Could not say how many councils used revenue resources to fund their capital programmes but considering the number of councils who borrow, and that borrowing can only be used to fund capital expenditure, there could not be many councils who had the capacity to do so.

iii.   Now was a good time to make changes to the way in which the capital programme was funded as there were significant challenges ahead.  This linked to the transformation programme and was an opportunity to consider whether the council needed all the assets it had.

 

In response the Executive Councillor for Finance and Resources said the following:

i.      Their ambition was to build the new council homes to Passivhaus standards however this was where possible. Hoped would be operating on zero carbon as soon as possible but this had to be balanced against being able to build 1000 new council homes.

ii.    The Council were investigating the costs to retrofit council housing stock so that they were carbon neutral.

iii.   The recruitment and retention of staff was vital. The Planning Department was currently fully staffed. There had been some work carried out regarding ‘golden hellos’.

 

The Committee resolved by 4 votes to 0 to endorse the recommendations.

 

The Executive Councillor approved the recommendations.

 

Conflicts of Interest Declared by the Executive Councillor (and any Dispensations Granted) 

No conflicts of interest were declared by the Executive Councillor.