Issue - meetings

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 Council on 25 February 2021. The strategy is focused on providing a framework for delivery of capital expenditure plans over a 10-30 year period. These plans cover spending on operational assets to support service delivery and on investments which provide an income for the council alongside meeting the council’s objectives in relation to economic development and place-making, regeneration and climate change mitigation. Governance arrangements are also outlined in order to ensure the capital programme continues to deliver value for money.

 

The council has a substantial capital programme which is mainly guided by and supports the strategic aims of the council as outlined in the One Cambridge – Fair for All vision and defined in the Annual Statement as published on the council website.

 

The strategy has been updated to reflect:

 

·      Changes to the CIPFA Prudential Code (throughout, but particularly the definitions set out in paras 3.2 and 3.7 and the prudential indicators referred to in paras 5.14, 5.15 and 6.2)

·      The Our Cambridge programme (paras 4.3 and 4.13)

·      the ongoing development of a programme to build 1,000 new council homes in the 10 years from 2022 (para 4.12) and the study to improve the energy performance of council homes (para 4.15)

 

The council’s Section 151 officer is required to report explicitly on the affordability and risk associated with the capital strategy.

 

As highlighted in the strategy the council ensures that capital projects and schemes are accompanied by detailed funding proposals. Where projects are to be funded from borrowing, either internally from cash balances or externally, a prudent Minimum Revenue Provision charge is made. The council has not borrowed externally to fund capital expenditure in the recent past, the current external borrowing representing debt incurred on the transition from the old housing subsidy system to HRA self-financing.

 

Where the council has expanded its commercial activities by purchasing additional commercial properties or by making loans to subsidiaries and joint ventures to facilitate the provision of intermediate housing or the development of sites for market and affordable housing, it ensures that the risks taken are proportionate to the size and scale of the authority. Legal advice is taken alongside the completion of appropriate due diligence and any loans are secured where appropriate. On projects undertaken by joint ventures the council monitors the expected repayment of loans and expected future surpluses carefully. The council has not borrowed externally to fund the increase in commercial activity.

 

External debt will be used to fund the redevelopment of the Park Street multi-storey car park and future housing developments within the HRA. The council is aware of the risks associated with borrowing for these purposes and will seek appropriate external advice.

 

External borrowing may also be used to fund the remainder of the capital programme where capital receipts and cash balances are insufficient. The level of capital spending will be reviewed annually for affordability in the Medium Term Finance Strategy (MTFS), before proposals are brought forward through the budget setting process.

 

Decision of the Executive Councillor for Finance and Resources

 

Agreed to recommend to Council the capital strategy as set out in the report and to note the summary capital programme

 

 

Reason for the decision

 

As detailed in the officer report.

 

Any alternative options considered and rejected

 

None.

 

Scrutiny considerations

 

The scrutiny committee noted that there will be a further review of the capital plan this year.

 

The scrutiny committee supported the recommendations.

 

The Executive Councillor approved the recommendations.

 

Conflicts of interest declared by the Executive Councillor (and any dispensation granted)

 

No conflicts of interest were declared by the Executive Councillor.