Issue - meetings

RESOLVED: That the Committee note and comment on the First Quarter Investment Strategy (Capital and Treasury) Review 2022/23

RECOMMENDED TO CABINET: That Cabinet:

(1)   Notes forecast expenditure of £12.252M in 2022/23 on the capital programme

(2)   Approves the adjustments to the capital programme for 2022/23 onwards, increasing the estimated spend in 2023/24 by £2.048M

(3)   Notes the position of the availability of capital resources and requirement to keep the capital programme under review for affordability

(4)   Note the position of Treasury Management activity as at the end of June 2022

REASON FOR DECISIONS:

(1)   Cabinet is required to approve adjustments to the capital programme and ensure the capital programme is fully funded

(2)   To ensure the Council’s continued compliance with CIPFA’s code of practice on Treasury Management and the Local Government Act 2003 and that the Council manages its exposure to interest and capital risk

Audio recording – 57:02

Ian Couper, Service Director – Resources, presented the report entitled First Quarter Investment Strategy (Capital and Treasury) Review 2022/23

·         This report shows the investment strategy which is the combination of our capital programme and our treasury investments.

·         The history of our capital budget since it was set in February 2022 and the changes that have happened since then. It takes us to a starting budget for this year £12.252M

·         Some schemes are detailed within the report as being delayed, the biggest one being John Barker Place. An amount was agreed a couple years back however it is clear now that we will not get to the right point of the construction phase to give that grant to them this year. Building work has made good progress but the grant is linked to the delivery of new affordable social housing in that area.

·         IFRS is an international financial reporting standard that was supposed to be implemented within local authorities this year which would require us to put leased vehicles onto our balance sheet and so we need a capital provision to do that. This delay is to make it easier for Councils and particularly auditors. This has been delayed again so we won’t do the adjustments this year and the impact will be felt next year

·         There are schemes around the Newark Close Road in Royston and the Lairage Car Park both of which have been delayed.

·         There are new spends in relation to the capital projects.

·         The Park Homes insulation spend which will be £341,000 and is fully funded from a grant. This helps with the Councils green agenda and also those living in the houses.

·         As we get Section 106 projects that are eligible, we bring the project and funding into the capital budget. We have identified £169,000 of that fund that will be used in the current year

·         There are some projects with overspends and we are looking for Cabinet approval to continue with those in line with financial regulations.

·         In playground renovations there was some carry forward from last year in relation to interactive play and whilst that has progressed to being finalised and was within the available budget initially, it was more than had been budgeted for and combined with the other planned works for the playgrounds, it means the variance will be higher the allowable tolerance in the financial regulations

·         It has been identified that we can apply £81,000 of Section 106 funding here

·         The Royston Leisure Centre solar thermal is also an overspend. We got some quotes and they were £20,000 more than budget, which is outside tolerance so it has been put on hold until Cabinet decision

·         The outdoor pool boilers in Hitchin and Letchworth had initial quotes that were above budget but within tolerances, but as work progressed they found a few extra things that pushed it over budget. However, it made no sense to abort the work at that stage. The tolerance is outside financial regulations but  ...  view the full minutes text for item 51