DirApp NAC 240228 Capital Investment Programme 2024-25 to 2033-34
North Ayrshire Council · 28 February 2024
Back to North Ayrshire Council — 28 February 2024 and its agenda
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NORTH AYRSHIRE COUNCIL 28 February 2024 North Ayrshire Council Title: Capital Investment Programme 2024/25 to 2033/34 Purpose: To advise Council on the draft Capital Investment Programme to 2033/34 Recommendation: That Council : (a) approves the revised Capital Investment Programme to 2033/34 included in appendix 3; (b) notes that the programme will be reviewed on an on-going basis with the next major review in 2026/27; and (c) approves the refreshed Capital Investment Strategy included in appendix 4. 1. Executive Summary 1.1 This report outlines the recommendations of the full review of the capital investment programme which was undertaken during 2023/24. 1.2 The review considered the current Capital Investment Programme and takes cognisance of subsequent changes, including: • The ongoing impact of construction industry inflation, cost volatility and supply chain issues across the overall Capital Investment Programme; • Reductions in Scottish Government capital grants as detailed in the Local Government Finance Settlement 2024/25; • A review of spending profiles across key capital projects to support the Council’s priorities; and • Revised levels of investment across projects, taking cognisance of Council priorities, external funding sources and investing in core assets through asset management plans. 1.3 The review included an assessment of all funding sources over the 10 years of the plan, including assumed levels of general capital grant, specific grants and a prudent assessment of the level of capital receipts over the period. Total available funding has been projected at £189.987m. The balance of funding required to deliver the capital programme will be met through prudential borrowing and this is anticipated at £216.472m. 1.4 The proposed Capital Investment Programme, aligned to the Council Plan priorities, is attached in Appendix 3 and will deliver a total programme of £406.459m to 2033/34.
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1.5 Compliance with Regulations and the Prudential Code requires assurance to be provided on affordability and sustainability of the Capital Investment programme, this is provided in the Treasury Management and Investment Strategy (TMIS) which follows this report on the Council agenda. The TMIS recognises that this will require to be kept under review to ensure the underlying assumptions continue to apply. 1.6 The longer-term affordability of the current and future Capital Investment Programmes requires incremental increases the current General Fund financing budgets. A review of available General Fund financing budgets has been undertaken, with significant increases in revenue support recommended, as part of the General Services Revenue Estimates 2024/25 to 2026/27, to support the delivery of the draft Capital Investment Programme. 1.7 In addition to the TMIS, there is a requirement for the Council to publish a Capital Investment Strategy (CIS). As part of the review of the Capital Investment Programme, a review of the previous CIS has also been undertaken and a draft revised CIS is attached at Appendix 4. 1.8 The capital programme will continue to be reviewed on an on-going basis by Cabinet with any additional funding brought forward for approval as appropriate. Major reviews will be undertaken on a 3-year basis, with the next due to be completed during 2026/27. 2. Background Capital Investment Programme 2024/25 to 2033/34 2.1 North Ayrshire Council approved the current Capital Investment Programme for the period 2023/24 to 2030/31 on 1 March 2023. A comprehensive review of the Programme was undertaken during 2023/24. This report contains the outcome of that review. Review of Capital Funding Scottish Government General Capital Grant 2.2 Local Government Finance Circular 8/2023 confirmed the level of General Capital Grant as £8.628m for 2024/25. This comprises a core General Capital element of £9.068m, which is a reduction of (£0.939m) from that previously anticipated, less a (£0.440m) reduction linked to the re-phasing of the Flooding Projects. In addition, the Scottish Government has indicated that North Ayrshire will receive an allocation of £0.100m during 2024/25 to support Coastal Change Adaptation. Projected at the core level of £9.068m to 2033/34, the total General Capital Grant for the period is forecast as £90.780m.
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Scottish Government Specific Capital Grants 2.3 In addition to the General Capital Grant, the Council will receive two Specific Grants: • £0.963m to tackle Vacant and Derelict Land with projects requiring Scottish Government approval; and • £0.587m, to fund Cycling, Walking and Safer Streets (CWSS). The Vacant and Derelict Land funding is a reduction of (£0.543m) from that received during 2023/24 and has only been confirmed for 2024/25. However, the CWSS funding has been projected at current levels to 2033/34. 2.4 A further Specific Grant allocation of £0.925m to support the Renewal of Play Parks programme has been confirmed outwith the Local Government Finance Settlement for the period 2024/25 to 2025/26. 2.5 In addition, the programme includes previous Specific Grant allocations in relation to a number of programmes which have been carried over into 2024/25 in line with revised project plans, including: • £1.414m from the 2023/24 Vacant and Derelict Land allocation; • £0.500m from the 2023/24 Islands Pit Stops; and • £0.505m from the 2023/24 Place Based Investment Programme. 2.6 As a result, the total forecast Specific Grant income to 2033/34 is £9.214m. Other Government Funding 2.7 The programme includes funding from the Scottish and UK Governments to support the Ayrshire Growth Deal. The total anticipated funding over the period is £57.265m. This has been aligned to the latest programme planning information. 2.8 The UK Government previously confirmed that North Ayrshire Council has been awarded £23.693m from the Levelling Up Fund to support the upgrading of the B714 to improve connectivity between North Ayrshire and the wider motorway network. £21.553m of this award is anticipated for receipt during financial years 2024/25 to 2025/26. 2.9 During 2024-25 the UK Government confirmed total funding of £0.253m to support the Digital SIP Great Harbour project. £0.128m of this is anticipated during 2024/25. Other Internal Funds 2.10 The programme includes previously approved contributions from earmarked funds of £3.299m to support the Solar PV project and £5.595m to support the B714 Upgrade. However, these have been reduced by £4.000m to facilitate the transfer of the General Capital Grant support for the 2023/24 pay settlement to Revenue.
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Capital Receipts 2.11 A review of projected income from capital receipts has been undertaken during 2023/24. This is forecast to realise income of £4.143m over the period of the programme in relation to the sale of other Council owned assets. Other External Funding 2.12 In relation to additional grant funding from other external bodies, given the level of uncertainty around securing these funds, only those funds which have been confirmed, but not yet drawn down, have been included at this time. These include: Funding Source £m Project NAVT 0.800 Marine Tourism NAVT 0.110 Repurposing Property Grant Fund NAVT 0.101 Irvine Enterprise Area Sustrans 0.036 AGD Great Harbour £1.047m Prudential Borrowing 2.13 The difference between the Council's Capital Investment Programme and funding from the above sources is met through prudential borrowing of £216.472m. The Capital Investment Programme will be delivered within the approved loan charges revenue budget, utilising the balances held in the Prudential Investment Fund and Capital Fund to smooth the revenue implications of the borrowing costs associated with the revised programme. Development of the Capital Investment Programme to 2033/34 2.14 The approach to developing the draft Capital Investment Programme to 2033/34 included: • A full review of the current programme to 2030/31; • Identification of opportunities to reprioritise uncommitted projects; • Review of the phasing of projects from a delivery and affordability perspective; • Options appraisal of new requirements within the context of Council priorities; • Consideration of lifecycle investment to protect core assets. 2.15 The current capital investment programme to 2030/31, as approved by Council on 1 March 2023, has been updated to reflect the changes to the Programme approved by Cabinet during 2023/24, including any re-phasing of programmes to reflect updated project plans. Re-Profiling 2.16 A total of £33.336m of planned expenditure has been re-profiled from 2023/24 into 2024/25 to 2033/34 in line with updated project delivery timelines. Full details of individual projects re-phased from 2023/24 have been reported to Cabinet throughout the year.
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2.17 In order to address the recommendations made within the Audit Scotland report on the audit of the 2022/23 annual accounts, the phasing of expenditure within the draft Capital Investment Programme has been reviewed to reflect historic expenditure patterns and organisational capacity. This has resulted in the rephasing of approximately 19% of the planned expenditure in both 2024/25 and 2025/26 for delivery in later years, without impacting on the overall value of investment within the programme. The actual levels of expenditure will be continually monitored and reported to Cabinet throughout the life of the programme. Lifecycle Investment 2.18 Informed by the asset management plans, an additional £31.542m has been included in the Capital Investment Programme to ensure the Council continues to invest in its core assets and infrastructure. Many of these programmes include recurring annual investment which has been extended to include the period between the end of the current Capital Programme and 2033/34.These include: • £11.400m for Roads investment to maintain a steady state road condition over the next ten years; • £6.000m for the Vehicle Renewal programme; • £4.200m for Property Lifecycle Investment to enable high priority cyclical and statutory investment to extend the life of the Council’s core assets, ensuring that they remain fit for purpose and supporting delivery of core front line services; • £3.612m for Schools ICT investment; • £3.000m for Street Lighting replacement reflecting the age and condition of the lighting network; • £1.680m for the Bridges infrastructure programme; • £1.500m to support the Improvement Grants programme; and • £0.150m for the Access Paths Network programme. Additional Investments linked to Revised Funding 2.19 On 23 January 2024 Cabinet noted the provisional award of £37.4m for the Levelling up for Ayrshire – Commercial and Low Carbon Infrastructure project under round 3 of the UK Government’s Levelling Up Fund (LUF). The bid centred around commercial estate development and associated low carbon infrastructure in Irvine and around Prestwick airport. However, all funding is currently provisional pending completion of the current validation and onboarding process. The Council requires to provide a minimum of 10% match funding to support all LUF bids and a provision for £2.000m of match funding has been included within the Capital Investment Programme. 2.20 Local Government Finance Circular 8/2023 confirmed the level of Cycling, Walking and Safer Streets specific grant for 2024/25 at £0.587m. Expenditure has been projected at this level for the full period of the Capital Investment Programme, resulting in additional investment of £1.768m to 2033/34. In addition, Vacant and Derelict Land specific grant for 2024/25 has been confirmed at £0.963m and has been reflected in additional investment at this level.
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Additional / Revised Investments 2.21 In support of the Council’s Sustainable North Ayrshire Strategy 2024-27, an additional investment of £5.430m in the decarbonisation of the Council’s fleet is included. This investment will support the Council’s Fleet Decarbonisation Route Map through the replacement of fossil fuelled vehicles with electric vehicles and more environmentally sustainable fleet solutions. 2.22 On 29 August 2023 Cabinet approved an additional investment of £5.000m to support the B714 Upgrade project. As previously noted, the UK Government confirmed an award of £23.693m from the Levelling Up Fund to support the upgrading of the B714 to improve connectivity between North Ayrshire and the wider motorway network. Following a review of the costs involved in the delivery of the project, together with appropriate value engineering, it was determined that an additional investment of £5.000m was required. The UK Government confirmed that no additional funding was being made available to support this project and Cabinet approved the additional investment, supported by funding from the Investment and Recovery & Renewal Funds, additional allocations from anticipated capital receipts not currently committed and the proposed utilisation of existing resources from within the existing programme. 2.23 Following completion of the initial tender process for Ardrossan North Shore, an additional investment of £3.914m is included to reflect the additional tender costs through inflationary related cost volatility and the requirement to maintain an appropriate level of contingency funding within the project. 2.24 An additional investment of £2.500m has been included to support the anticipated outcomes of the ongoing locality-based property review. This review is developing options around how the Council best utilises its property assets within a Best Value context, taking account of the needs of our communities, staff workstyles and climate impact. This investment provision will remain under review as the programme of work develops through 2024/25. 2.25 On 7 November 2023 Cabinet approved changes to the Home Ownership Made Easy (HOME) project with the site being transferred to the HRA for the provision of social housing. This has resulted in the withdrawal of investment from the current General Services Capital Investment Programme, including a (£1.033m) reduction in planned expenditure for 2024/25. 2.26 Recent years have witnessed periods of significant volatility across the construction industry linked to the ongoing legacy impacts of the Covid-19 pandemic, the influence of national economic developments and international externalities arising from global conflicts and their impacts on costs and supply chains. These volatilities have manifested locally through increased borrowing costs, inflationary pressures, limited availability of contractors, supply chain issues and material shortages which are impacting on tender returns and the cost of materials. Where the resultant cost pressures have been quantified, additional expenditure requirements have been identified in relation to specific projects. However, unquantified risks have also been identified, or are anticipated, across a number of other projects, including the Upper Garnock Flood Protection Scheme, Moorpark Primary School and Ardrossan Harbour Landside works. In order to support the management of these and other emerging risks, it is proposed that the £10.000m investment within the Flexibility budget over the next five years is maintained.
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2.27 The current approved Capital Investment Programme to 2030/31 is attached at appendix 1. Full details of the proposed changes to the programme following the review, as outlined above, are included in appendix 2. The revised Capital Investment Programme covering the period from 2024/25 to 2033/34 is included in appendix 3. This will deliver a total programme of investment of £406.459m. Future Affordability 2.28 The Prudential Investment Fund was created as part of the 2015/16 budget strategy to utilise short term underspends on General Fund financing budgets to offset longer term pressures to support Prudential Borrowing arising from the Capital Investment Programme. 2.29 Due to the significant investment planned by North Ayrshire Council over the period to 2033/34, set within the context of government grant forecasts and combined with the additional cost pressures identified across a number of projects, it is projected that these funds will be exhausted before the end of the current 10 year Capital Investment Programme. In order to ensure the affordability of current and future capital investments beyond this, it will be necessary to incrementally increase the current General Fund financing budgets over the period of the programme. Additional funding support to mitigate the significant cost increases and the increased cost of borrowing includes the use of the recurring element of the Service Concession flexibility, approved at Council on 15 February 2023, which resulted in an average contribution of £3.437m from 2022/23 and the utilisation of the balance of savings from the temporary reduction in the employers’ superannuation contributions during 2024/25 and 2025/26. 2.30 In addition to the application of these non-recurring funds, it is necessary to include an indicative recurring pressure within the General Services Revenue Estimates 2024/25 to 2026/27. This includes an incremental contribution of £0.250m per annum from 2024/25, increasing to £0.450m from 2025/26 and £0.500m per annum from 2026/27. The impacts of inflationary pressures and interest rate fluctuations will continue to be monitored on an ongoing basis and the resultant increases in revenue contributions will be reviewed as part of the next major review of the capital programme, due to be undertaken during 2026/27. Treasury Management and Investment Strategy (TMIS) 2.31 Compliance with Regulation and the Prudential Code requires assurance to be provided on affordability and sustainability of the Capital Investment Programme. This is provided in the Treasury Management and Investment Strategy (TMIS) which follows this report on the Council agenda. The TMIS recognises that this will require to be kept under review to ensure the underlying assumptions continue to apply. Capital Investment Strategy 2.32 In addition to the TMIS there is also a requirement for the Council to publish a Capital Investment Strategy (CIS) which provides the overarching framework under which the draft Capital Investment Programme has been developed. The current CIS was approved by Council on 1 March 2023. During 2023/24 this has been refreshed with the revised CIS included at Appendix 4.
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Conclusion 2.32 The draft Capital Investment Programme 2024/25 to 2033/34, including proposed funding, is attached at Appendix 3. This confirms total investment of £406.459m over the period. The proposed investment aligns with the Council's key priorities, as set out in the Council Plan 2023-2028, core asset management plans and the refreshed Capital Investment Strategy, included at Appendix 4. 2.33 The programme is affordable based on the estimated funding streams set out in the 2024/25 to 2026/27 Medium Term Financial Plan and from the mitigating actions noted earlier in this report to supplement the Loans Fund. These proposals have been developed within a very challenging financial landscape impacted by a combination of significant cost volatility across the Programme and an increased cost of borrowing. The affordability of the Programme is also highlighted within the Treasury Management and Investment Strategy, reported elsewhere on the agenda, and this will be monitored on an ongoing basis. A further, full assessment of the Programme’s affordability will be undertaken as part of the next major review of the capital programme due for completion during 2026/27. 3. Proposals 3.1 It is proposed that Council : (a) approves the draft Capital Investment Programme 2024/25 to 2033/34 included in appendix 3; (b) notes that the programme will be reviewed on an on-going basis with the next major review in 2026/27; and (c) approves the refreshed Capital Investment Strategy included in appendix 4. 4. Implications/Socio-economic Duty Financial 4.1 The revised capital programme is based on a number of assumptions around the availability of finance including capital grant and capital receipts. Given the forward projection for 10 years, it is essential that these and the cost of projects are kept under review. There are a number of assumptions underpinning the current revenue projection including; the level of loans fund support, the level of future interest rates, delivery of the programme within the timelines outlined in the programme and application of the Capital Fund and the Prudential Investment Fund to smooth the revenue implications across the life of the plan. Due to the long-term nature of the borrowing required to support this programme, a review of available financing budgets has been undertaken with a view to increasing the available funding and maintaining the future affordability of the Programme.
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Human Resources 4.2 Through investment in the Capital Investment Programme, it is anticipated there will be additional staffing requirements. This will be considered on a project basis. Legal 4.3 None. Equality/Socio-economic 4.4 Where the Council is making decisions in relation to its spending priorities, it is obliged to comply with the public sector equality duty set out in the Equalities Act 2010. To meet this requirement, the Council assesses the impact of applying a decision against key groups to ensure that certain groups are not disadvantaged by those decisions. A number of the projects within the revised capital programme, will make a positive contribution to the Council’s commitment to equalities. Environmental and Sustainability 4.5 All projects within the revised plan will be delivered to minimise the impact on the environment and maximise sustainability. Further, specific projects within the plan will have a positive environmental impact. Key Priorities 4.6 The refreshed Capital Investment Programme 2024/25 to 2033/34 supports the delivery of the outcomes as outlined in the Council Plan 2023-2028 by focusing our investment on priorities, managing risk and supporting the delivery of key priorities. Community Wealth Building 4.7 The Council will aim to maximise opportunities within the context of the 5 pillars of Community Wealth Building from its investment programme. In particular, Ayrshire Growth Deal and growth and investment projects will make a positive contribution to economic regeneration across the region. 5. Consultation 5.1 Executive Directors have been consulted as part of the review the current capital investment programme and the identification of the proposed revisions and additions to the programme detailed in this report. Mark Boyd Head of Service (Finance) For further information please contact David Forbes, Senior Manager (Strategic Business Partner), on 01294 324551. Background Papers Capital Investment Programme 2023/24 to 2030/31 – North Ayrshire Council 1 March 2023
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Appendix 1 Project Description Revised 24/25 Revised 25/26 Revised 26/27 Revised 27/28 Revised 28/29 Revised 29/30 Revised 30/31 Total £ £ £ £ £ £ £ £ EXPENDITURE Place Roads Improvement / Reconstruction 3,800,000 3,800,000 3,800,000 3,800,000 3,800,000 3,800,000 3,800,000 26,600,000 Lighting 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 7,000,000 Millport Coastal FPS 20,035,000 20,035,000 Millport Pier 349,920 349,920 Millburn FPS 1,109,982 1,109,982 Bridges infrastructure programme 954,564 560,000 560,000 560,000 560,000 560,000 460,000 4,214,564 B714 Improvements 8,000,000 16,351,443 24,351,443 Property lifecycle investment 1,000,000 1,000,000 1,000,000 1,100,000 1,000,000 1,000,000 1,000,000 7,100,000 HOME 1,033,021 1,033,021 Cemetery extns, walls & infra 300,000 268,162 23,042 591,204 Cmty, Kilbirnie - Works 200,000 200,000 Cmty, Ardrossan - Extension 300,000 300,000 Renewal of Play Parks 347,000 578,000 925,000 Vehicles 1,022,023 2,000,000 2,977,977 2,000,000 2,000,000 2,000,000 2,000,000 14,000,000 Montgomerie Park Masterplan 50,000 100,000 600,000 350,000 490,000 500,000 2,090,000 Cycling / Walker / Safer Streets 586,000 586,000 586,000 586,000 586,000 586,000 586,000 4,102,000 Access Paths Network Programme 50,000 50,000 50,000 50,000 50,000 50,000 50,000 350,000 Growth & Investment Ayrshire Growth Deal: AGD - i3 DPMC Phase 1 394,551 394,551 AGD - i3 DPMC Phase 2 400,000 2,000,000 2,150,030 4,550,030 AGD - i3 Flexible Business Space Phase 1 978,000 2,419,000 7,591,500 411,818 11,400,318 AGD - Hunterston - Centre for Low Carbon Energy & Circular Economy 335,000 335,000 4,196,000 4,196,000 4,196,000 4,195,881 17,453,881 AGD - Great Harbour 4,025,000 4,188,000 2,335,000 2,221,000 86,000 88,474 12,943,474 AGD - IMSE 250,000 273,740 3,200,000 3,250,000 3,250,000 10,223,740 AGD Marine Tourism - Ardrossan 512,000 4,500,000 1,689,621 6,701,621 AGD Marine Tourism - Arran 30,000 40,000 150,000 1,600,000 104,611 1,924,611 AGD Marine Tourism - Cumbrae 50,000 150,000 1,600,000 96,750 1,896,750 Ardrossan Harbour & Landside 1,793,701 1,793,702 3,587,403 Irvine Enterprise Area 103,079 103,079 Ardrossan North Shore 10,912,238 1,694,804 12,607,042 Sub Total 59,621,079 43,614,111 30,082,910 21,421,568 16,982,611 17,020,355 9,396,000 198,138,634 Communities Montgomerie Park School 15,413,953 15,413,953 Universal Free School Meals Expansion 122,420 1,538,830 2,090,270 1,944,294 333,087 3,067,241 9,096,142 Schools ICT Investment 752,000 752,000 752,000 752,000 752,000 752,000 752,000 5,264,000 Ardrossan New Build 15,183,238 19,000,185 35,238,359 4,600,000 74,021,782 Sub Total 31,471,611 21,291,015 38,080,629 7,296,294 1,085,087 3,819,241 752,000 103,795,877 North Ayrshire Council Approved Capital Programme 2024/25 - 2030/31 (Base)
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Appendix 1 Project Description Revised 24/25 Revised 25/26 Revised 26/27 Revised 27/28 Revised 28/29 Revised 29/30 Revised 30/31 Total £ £ £ £ £ £ £ £ North Ayrshire Council Approved Capital Programme 2024/25 - 2030/31 (Base) Chief Executive ICT Investment Fund 382,400 376,600 702,600 297,600 282,600 282,600 297,600 2,622,000 WAN 500,000 500,000 LAN/WiFi 1,500,000 1,500,000 Telephony 650,000 650,000 Sub Total 382,400 376,600 702,600 2,947,600 282,600 282,600 297,600 5,272,000 Health & Social Care Partnership Community Alarms - Analogue to Digital 333,000 333,000 Improvement grants 500,000 500,000 500,000 500,000 500,000 500,000 500,000 3,500,000 Sub Total 833,000 500,000 500,000 500,000 500,000 500,000 500,000 3,833,000 Other Flexibility / Infrastructure Fund 7,000,000 100,000 7,100,000 Sub Total 7,000,000 100,000 7,100,000 TOTAL EXPENDITURE 92,308,090 72,781,726 69,466,139 32,165,462 18,850,298 21,622,196 10,945,600 318,139,511 Revised 24/25 Revised 25/26 Revised 26/27 Revised 27/28 Revised 28/29 Revised 29/30 Revised 30/31 Total £ £ £ £ £ £ £ £ INCOME Prudential Borrowing 68,762,811 33,183,283 50,474,139 13,173,462 1,218,552 (7,035,058) 352,600 160,129,789 Specific Grants - AGD 4,839,000 8,399,000 8,399,000 8,399,000 7,038,746 18,064,254 55,139,000 Specific Grants - Cycling, Walking & Safer Streets 586,000 586,000 586,000 586,000 586,000 586,000 586,000 4,102,000 Specific Grants - B714 Improvements 5,630,000 16,351,443 21,981,443 Specific Grants - Renewal of Play Parks 347,000 578,000 925,000 General Capital Grant 10,007,000 10,007,000 10,007,000 10,007,000 10,007,000 10,007,000 10,007,000 70,049,000 Recovery & Renewal 1,235,180 1,235,180 Grants & Contributions 901,099 901,099 Sale of land & buildings 3,677,000 3,677,000 TOTAL INCOME 92,308,090 72,781,726 69,466,139 32,165,462 18,850,298 21,622,196 10,945,600 318,139,511
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Appendix 2 Project Description Changes 24/25 Changes 25/26 Changes 26/27 Changes 27/28 Changes 28/29 Changes 29/30 Changes 30/31 Changes 31/32 Changes 32/33 Changes 33/34 Total £ £ £ £ £ £ £ £ £ £ £ EXPENDITURE Place Roads Improvement / Reconstruction 3,800,000 3,800,000 3,800,000 11,400,000 Traffic Calming 82,953 82,953 Lighting 1,000,000 1,000,000 1,000,000 3,000,000 Upper Garnock FPS 467,828 467,828 Millport Pier (329,920) 154,960 134,960 (40,000) Millburn FPS 343,547 343,547 Coastal Adaptations 99,727 99,727 Bridges infrastructure programme (100,000) 100,000 560,000 560,000 560,000 1,680,000 Largs Promenade Seawall 50,000 50,000 100,000 B714 Improvements (5,435,000) (1,574,749) 12,211,695 5,201,946 Property lifecycle investment 51,160 400,000 600,000 1,000,000 1,000,000 1,000,000 4,051,160 Locality Based Property Review 1,000,000 1,500,000 2,500,000 HOME (1,033,021) (1,033,021) Cemetery extns, walls & infra (229,285) (63,365) 122,560 11,521 (158,569) Cmty, Kilbirnie - Works (200,000) (200,000) Cmty, Ardrossan - Extension 150,000 450,000 600,000 Cmty, Kilbirnie - Walls 36,071 36,072 72,143 Cmty, Beith - Walls 51,416 51,417 102,833 Cmty, Abbey Tower - Walls 44,469 44,469 88,938 Cmty, Stev Hawkhill - Walls 51,196 51,196 102,392 Cmty, West Kilbride - Walls 47,282 47,282 94,564 Cmty, Kilbirnie - New 288,916 288,917 577,833 Goldcraigs Refurbishment 608,438 132,562 741,000 Vehicles (2,023) 2,023 2,000,000 2,000,000 2,000,000 6,000,000 Fleet Decarbonisation 2,320,000 1,660,000 1,950,000 5,930,000 Shewalton landfill 48,949 48,949 Solar PV Investment - Nethermains 260,720 260,721 521,441 Solar PV Investment - Shewalton 1,825,377 1,825,377 3,650,754 Repurposing Property Grant Fund 250,000 250,000 Islands Pit Stops 500,000 500,000 Place Based Investment Programme 350,000 350,000 Digital - SIPP Great Harbour 127,882 127,882 PBIP 36 Bank Street 50,000 50,000 PBIP Galt House 25,000 25,000 Montgomerie Park Masterplan 137,500 112,500 (25,000) 50,000 275,000 VDLF - 2024/25 allocation 963,000 963,000 VDLF - Irvine Kyle Road Phase 2 1,087,018 1,087,018 VDLF - Development Work 119,012 119,012 VDLF - Tree Planting 47,600 47,600 VDLF Stalled Spaces Fund 100,000 100,000 Cycling / Walker / Safer Streets 1,000 1,000 1,000 1,000 1,000 1,000 1,000 587,000 587,000 587,000 1,768,000 Access Paths Network Programme 445,000 50,000 50,000 50,000 595,000 North Ayrshire Council Capital Programme 2024/25 - 2033/34 - Revisions
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Appendix 2 Project Description Changes 24/25 Changes 25/26 Changes 26/27 Changes 27/28 Changes 28/29 Changes 29/30 Changes 30/31 Changes 31/32 Changes 32/33 Changes 33/34 Total £ £ £ £ £ £ £ £ £ £ £ North Ayrshire Council Capital Programme 2024/25 - 2033/34 - Revisions Growth & Investment Ayrshire Growth Deal: AGD - i3 DPMC Phase 1 5,898 300,000 305,898 AGD - i3 DPMC Phase 2 (300,449) (1,750,000) (693,169) 2,908,275 164,657 AGD - i3 Flexible Business Space Phase 1 1,047,920 (2,419,000) (7,591,500) (411,818) (9,374,398) AGD - i3 Flexible Business Space Phase 2 600,000 4,900,000 4,900,000 148,000 352,000 10,900,000 AGD - Hunterston - Centre for Low Carbon Energy & Circular Economy 333,892 (1) 333,891 AGD - Great Harbour (2,737,647) (1,881,436) 516,490 2,552,566 1,804,928 (31,909) 222,992 AGD - IMSE 445,000 (352,253) 92,747 AGD Marine Tourism - Ardrossan (512,000) (4,500,000) (1,689,621) 2,000,000 2,500,000 224,285 (1,977,336) AGD Marine Tourism - Arran 10,482 (37,837) (27,355) AGD Marine Tourism - Cumbrae 175,000 775,000 600,000 899,504 2,449,504 Ardrossan Harbour & Landside (914,222) (17,372) 896,851 (34,743) Irvine Enterprise Area (51,540) 51,540 Ardrossan North Shore 18,500,543 35,500 18,536,043 Sub Total 20,255,740 422,591 13,436,289 8,207,997 4,620,091 (158,878) 101,000 8,997,000 8,997,000 8,997,000 73,875,830 Communities Montgomerie Park School (2,364,552) (2,364,552) Universal Free School Meals Expansion 392,425 (327,021) (544,010) 1,136,848 (913) (137,500) 519,829 Schools ICT Investment 451,908 451,908 451,908 752,000 752,000 752,000 3,611,724 Ardrossan New Build (8,080,621) 1,371,270 (4,559,147) 17,410,374 6,141,876 Sub Total (9,600,840) 1,496,157 (4,651,249) 18,547,222 (913) (137,500) 752,000 752,000 752,000 7,908,877 Chief Executive ICT Investment Fund (158,700) 52,900 (145,500) 351,300 100,000 Telephony 115,000 115,000 230,000 Sub Total (43,700) 167,900 (145,500) 351,300 330,000 Health & Social Care Partnership Community Alarms - Analogue to Digital (264,024) 68,977 (195,047) Improvement grants 500,000 500,000 500,000 1,500,000 Sub Total (264,024) 68,977 500,000 500,000 500,000 1,304,953 Other Flexibility / Infrastructure Fund (7,000,000) 3,223,000 3,521,036 3,155,964 2,900,000 Core Infrastructure, property and Vehicles Renewal Investment 2,000,000 2,000,000 Sub Total 2,000,000 (7,000,000) 3,223,000 3,521,036 3,155,964 4,900,000 TOTAL EXPENDITURE 12,347,176 (4,844,375) 11,862,540 30,627,555 7,775,142 (296,378) 101,000 10,249,000 10,249,000 10,249,000 88,319,660
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Appendix 2 Project Description Changes 24/25 Changes 25/26 Changes 26/27 Changes 27/28 Changes 28/29 Changes 29/30 Changes 30/31 Changes 31/32 Changes 32/33 Changes 33/34 Total £ £ £ £ £ £ £ £ £ £ £ North Ayrshire Council Capital Programme 2024/25 - 2033/34 - Revisions Changes 24/25 Changes 25/26 Changes 26/27 Changes 27/28 Changes 28/29 Changes 29/30 Changes 30/31 Changes 31/32 Changes 32/33 Changes 33/34 Total £ £ £ £ £ £ £ £ £ £ £ INCOME Prudential Borrowing 9,537,439 (3,597,408) 5,359,081 22,110,062 7,534,232 12,703,178 914,000 594,000 594,000 594,000 56,342,584 Specific Grants - AGD (1,435,109) (1,743,415) 6,731,279 9,455,493 1,178,910 (12,061,556) 2,125,602 Specific Grants - Cycling, Walking & Safer Streets 1,000 1,000 1,000 1,000 1,000 1,000 1,000 587,000 587,000 587,000 1,768,000 Specific Grants - Vacant & Derelict Funding 2,376,630 2,376,630 Specific Grants - Islands Pit Stop 500,000 500,000 Specific Grants - Place Based Investment Programme 505,000 505,000 Specific Grants - B714 Improvements (428,054) (428,054) Specific Grants - Digital - SIPP Great Harbour 127,882 127,882 General Capital Grant - Flooding (440,000) 440,000 General Capital Grant (839,273) (939,000) (939,000) (939,000) (939,000) (939,000) (939,000) 9,068,000 9,068,000 9,068,000 20,730,727 Capital Fund 885,000 885,000 Recovery & Renewal 1,359,673 703,707 710,180 2,773,560 Grants & Contributions 96,988 49,560 146,548 Sale of land & buildings 100,000 241,181 125,000 466,181 TOTAL INCOME 12,347,176 (4,844,375) 11,862,540 30,627,555 7,775,142 (296,378) 101,000 10,249,000 10,249,000 10,249,000 88,319,660
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Appendix 3 Project Description Revised 24/25 Revised 25/26 Revised 26/27 Revised 27/28 Revised 28/29 Revised 29/30 Revised 30/31 Revised 31/32 Revised 32/33 Revised 33/34 Total £ £ £ £ £ £ £ £ £ £ £ EXPENDITURE Place Roads Improvement / Reconstruction 3,800,000 3,800,000 3,800,000 3,800,000 3,800,000 3,800,000 3,800,000 3,800,000 3,800,000 3,800,000 38,000,000 Traffic Calming 82,953 82,953 Lighting 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 10,000,000 Upper Garnock FPS 467,828 467,828 Millport Coastal FPS 20,035,000 20,035,000 Millport Pier 20,000 154,960 134,960 309,920 Millburn FPS 1,453,529 1,453,529 Coastal Adaptations 99,727 99,727 Bridges infrastructure programme 854,564 560,000 560,000 560,000 560,000 560,000 560,000 560,000 560,000 560,000 5,894,564 Largs Promenade Seawall 50,000 50,000 100,000 B714 Improvements 2,565,000 14,776,694 12,211,695 29,553,389 Property lifecycle investment 1,051,160 1,400,000 1,600,000 1,100,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 11,151,160 Locality Based Property Review 1,000,000 1,500,000 2,500,000 Cemetery extns, walls & infra 70,715 204,797 145,602 11,521 432,635 Cmty, Ardrossan - Extension 450,000 450,000 900,000 Cmty, Kilbirnie - Walls 36,071 36,072 72,143 Cmty, Beith - Walls 51,416 51,417 102,833 Cmty, Abbey Tower - Walls 44,469 44,469 88,938 Cmty, Stev Hawkhill - Walls 51,196 51,196 102,392 Cmty, West Kilbride - Walls 47,282 47,282 94,564 Cmty, Kilbirnie - New 288,916 288,917 577,833 Goldcraigs Refurbishment 608,438 132,562 741,000 Renewal of Play Parks 347,000 578,000 925,000 Vehicles 1,020,000 2,000,000 2,980,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 20,000,000 Fleet Decarbonisation 2,320,000 1,660,000 1,950,000 5,930,000 Shewalton landfill 48,949 48,949 Solar PV Investment - Nethermains 260,720 260,721 521,441 Solar PV Investment - Shewalton 1,825,377 1,825,377 3,650,754 Repurposing Property Grant Fund 250,000 250,000 Islands Pit Stops 500,000 500,000 Place Based Investment Programme 350,000 350,000 Digital - SIPP Great Harbour 127,882 127,882 PBIP 36 Bank Street 50,000 50,000 PBIP Galt House 25,000 25,000 Montgomerie Park Masterplan 137,500 162,500 75,000 650,000 350,000 490,000 500,000 2,365,000 VDLF - 2024/25 allocation 963,000 963,000 VDLF - Irvine Kyle Road Phase 2 1,087,018 1,087,018 VDLF - Development Work 119,012 119,012 VDLF - Tree Planting 47,600 47,600 VDLF Stalled Spaces Fund 100,000 100,000 Cycling / Walker / Safer Streets 587,000 587,000 587,000 587,000 587,000 587,000 587,000 587,000 587,000 587,000 5,870,000 Access Paths Network Programme 495,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 945,000 North Ayrshire Council Revised Capital Programme 2024/25 - 2033/34
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Appendix 3 Project Description Revised 24/25 Revised 25/26 Revised 26/27 Revised 27/28 Revised 28/29 Revised 29/30 Revised 30/31 Revised 31/32 Revised 32/33 Revised 33/34 Total £ £ £ £ £ £ £ £ £ £ £ North Ayrshire Council Revised Capital Programme 2024/25 - 2033/34 Growth & Investment Ayrshire Growth Deal: AGD - i3 DPMC Phase 1 400,449 300,000 700,449 AGD - i3 DPMC Phase 2 99,551 250,000 1,456,861 2,908,275 4,714,687 AGD - i3 Flexible Business Space Phase 1 2,025,920 2,025,920 AGD - i3 Flexible Business Space Phase 2 600,000 4,900,000 4,900,000 148,000 352,000 10,900,000 AGD - Hunterston - Centre for Low Carbon Energy & Circular Economy 668,892 335,000 4,196,000 4,196,000 4,196,000 4,195,880 17,787,772 AGD - Great Harbour 1,287,353 2,306,564 2,851,490 4,773,566 1,890,928 56,565 13,166,466 AGD - IMSE 445,000 250,000 273,740 3,200,000 3,250,000 2,897,747 10,316,487 AGD Marine Tourism - Ardrossan 2,000,000 2,500,000 224,285 4,724,285 AGD Marine Tourism - Arran 40,482 40,000 150,000 1,600,000 66,774 1,897,256 AGD Marine Tourism - Cumbrae 225,000 925,000 2,200,000 996,254 4,346,254 Ardrossan Harbour & Landside 879,479 1,776,330 896,851 3,552,660 Irvine Enterprise Area 51,539 51,540 103,079 Ardrossan North Shore 29,412,781 1,730,304 31,143,085 Sub Total 79,876,819 44,036,702 43,519,199 29,629,565 21,602,702 16,861,477 9,497,000 8,997,000 8,997,000 8,997,000 272,014,464 Communities Montgomerie Park School 13,049,401 13,049,401 Universal Free School Meals Expansion 514,845 1,211,809 1,546,260 3,081,142 332,174 2,929,741 9,615,971 Schools ICT Investment 1,203,908 1,203,908 1,203,908 752,000 752,000 752,000 752,000 752,000 752,000 752,000 8,875,724 Ardrossan New Build 7,102,617 20,371,455 30,679,212 22,010,374 80,163,658 Sub Total 21,870,771 22,787,172 33,429,380 25,843,516 1,084,174 3,681,741 752,000 752,000 752,000 752,000 111,704,754 Chief Executive ICT Investment Fund 223,700 429,500 557,100 648,900 282,600 282,600 297,600 2,722,000 WAN 500,000 500,000 LAN/WiFi 1,500,000 1,500,000 Telephony 115,000 115,000 650,000 880,000 Sub Total 338,700 544,500 557,100 3,298,900 282,600 282,600 297,600 5,602,000 Health & Social Care Partnership Community Alarms - Analogue to Digital 68,976 68,977 137,953 Improvement grants 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 5,000,000 Sub Total 568,976 568,977 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 5,137,953 Other Flexibility / Infrastructure Fund 3,323,000 3,521,036 3,155,964 10,000,000 Core Infrastructure, property and Vehicles Renewal Investment 2,000,000 2,000,000 Sub Total 2,000,000 3,323,000 3,521,036 3,155,964 12,000,000 TOTAL EXPENDITURE 104,655,266 67,937,351 81,328,679 62,793,017 26,625,440 21,325,818 11,046,600 10,249,000 10,249,000 10,249,000 406,459,171
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Appendix 3 Project Description Revised 24/25 Revised 25/26 Revised 26/27 Revised 27/28 Revised 28/29 Revised 29/30 Revised 30/31 Revised 31/32 Revised 32/33 Revised 33/34 Total £ £ £ £ £ £ £ £ £ £ £ North Ayrshire Council Revised Capital Programme 2024/25 - 2033/34 Revised 24/25 Revised 25/26 Revised 26/27 Revised 27/28 Revised 28/29 Revised 29/30 Revised 30/31 Revised 31/32 Revised 32/33 Revised 33/34 Total £ £ £ £ £ £ £ £ £ £ £ INCOME Prudential Borrowing 78,300,250 29,585,875 55,833,220 35,283,524 8,752,784 5,668,120 1,266,600 594,000 594,000 594,000 216,472,373 Specific Grants - AGD 3,403,891 6,655,585 15,130,279 17,854,493 8,217,656 6,002,698 57,264,602 Specific Grants - Cycling, Walking & Safer Streets 587,000 587,000 587,000 587,000 587,000 587,000 587,000 587,000 587,000 587,000 5,870,000 Specific Grants - Vacant & Derelict Funding 2,376,630 2,376,630 Specific Grants - Islands Pit Stop 500,000 500,000 Specific Grants - Place Based Investment Programme 505,000 505,000 Specific Grants - B714 Improvements 5,201,946 16,351,443 21,553,389 Specific Grants - Digital - SIPP Great Harbour 127,882 127,882 Specific Grants - Renewal of Play Parks 347,000 578,000 925,000 General Capital Grant - Flooding (440,000) 440,000 General Capital Grant 9,167,727 9,068,000 9,068,000 9,068,000 9,068,000 9,068,000 9,068,000 9,068,000 9,068,000 9,068,000 90,779,727 Capital Fund 885,000 885,000 Recovery & Renewal 2,594,853 703,707 710,180 4,008,740 Grants & Contributions 998,087 49,560 1,047,647 Sale of land & buildings 100,000 3,918,181 125,000 4,143,181 TOTAL INCOME 104,655,266 67,937,351 81,328,679 62,793,017 26,625,440 21,325,818 11,046,600 10,249,000 10,249,000 10,249,000 406,459,171
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Appendix 4
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Introduction The Capital Investment Strategy for North Ayrshire Council provides an overview of how capital expenditure plans, capital financing and treasury management activity contribute to the infrastructure and provision of services for the benefit of North Ayrshire communities and citizens. This refreshed strategy takes a long-term view and covers the period from 2024 to 2034. This is aligned to the Capital Investment Programme. The Capital Investment Strategy is a reporting requirement of the CIPFA Prudential Code. Local authorities produce many plans and strategies in the course of their operations. However, it is recognised that within the context of capital planning, there is a need to produce an overarching view that addresses the following key considerations: - • Ensuring that capital plans are aligned to the strategic priorities as set out in the Council Plan. • Ensuring that capital plans are affordable, prudent and sustainable. • Demonstrating the linkage to local strategic planning and local asset management planning. • Ensuring that financing decisions are taken in accordance with good professional practice and a full understanding of the risks involved. • Demonstrating the Council has robust governance arrangements to support its capital planning activities
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Background North Ayrshire Council has ambitious plans to deliver significant capital investment over the planning period across housing, schools, economic development and infrastructure. Working in partnership with East Ayrshire, South Ayrshire, the UK and Scottish Government, the Ayrshire Growth deal will see the regeneration of the region through investment in strategic infrastructure across various sectors, including life sciences, tourism, manufacturing and aerospace. Throughout 2023/24 the wider construction industry has reported significant, ongoing inflationary pressures linked to a number of factors, including additional costs as an ongoing consequence of the Covid-19 pandemic; upward pressure on input costs linked to international externalities such as ongoing global conflicts and its impact on global supply chains; material and labour shortages; and increased demand linked to reduced contractor availability. This has resulted in the identification of increased cost risks in relation to a number of our investment priorities. The Capital Investment Strategy takes account of the Council’s strategic priorities and considers any new investment within the context of outcomes, affordability or invest to save. Decisions made over the course of the programme for capital and treasury management will have financial consequences for the Council for many years in the future. There is also recognition of the need to balance investment between maintaining current assets and infrastructure against the ambitions for acquiring new assets. North Ayrshire Council’s Capital Investment Programme is shaped and influenced by various associated strategies and plans.
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The primary purpose of the Capital Investment Strategy is to provide an overarching view of how various plans and strategies inform capital investment and to demonstrate that this is both affordable and sustainable. The associated plans and strategies each focus on specific priority areas and, through appropriate governance structures, ultimately shape and influence the investment plans delivered through the Capital Investment Programme. Underpinning the Capital Investment Programme is the Treasury Management and Investment Strategy and Loans Fund Policy. Both ultimately consider the delivery of the capital programme within the context of affordability and risk and apply a measurement of what this means against key prudential and treasury indicators. The aim being to demonstrate affordability and sustainability over the long term.
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Plans and Strategies Council Plan 2023-2028 The mission for North Ayrshire Council is “Working together to improve the lives of our people in North Ayrshire.” To deliver on this mission 4 key strategic priorities, outlined below, have been developed to direct plans now and into the future. Through appropriate governance frameworks all capital investment must demonstrate that it is aligned to the Council’s strategic themes, with particular focus and priority given to capital investment opportunities that meet multiple strategic priorities.
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Community Planning Partnerships and Local Outcomes Improvement Plan The North Ayrshire Community Planning Partnership is a partnership across a wide range of organisations. The Local Outcomes Improvement Plan (LOIP) 2022 – 2030 provides a commitment by all partners to North Ayrshire communities and citizens across three main priority areas: The Community Planning Partnership consists of 6 Locality Partnerships across North Ayrshire. Key to the success of the LOIP is working in partnership with a number of agencies to deliver better outcomes for citizens and communities. The partnership includes Scottish Government, Police Scotland, NHS Ayrshire and Arran, Skills Development Scotland, KA Leisure, Scottish Fire and Rescue and Scottish Enterprise. Through the Local Development Plan, one of the strategic policies is to deliver on local community priorities. Each Locality Partnership has agreed their own local priorities. The following diagram illustrates the links between the locality priorities and those in the LOIP:
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This framework of community engagement and structured partnership working is vital when planning capital investment. More importantly, that local priorities are considered as part of any strategic planning framework. Health and Social Care Partnership Strategic Commissioning Plan 2022-2030 The North Ayrshire Health & Social Care Strategic Plan 2022-2030 was developed through engagement and collaboration with local people, service users, members of staff and other key stakeholders. It sets out our long-term ambitions for improving the health and wellbeing of everyone who lives in North Ayrshire. The 2022-2030 plan continues the existing vision that “all people who live in North Ayrshire are able to have a safe, healthy and active life” and to achieve this the HSCP focuses on key priorities: WELLBEING WORK WORLD
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Asset Management Plans Asset Management Plans aim to ensure that the Council holds the right assets and that they are fit for purpose in terms of condition, suitability and accessibility. The plans also provide the vehicle for identifying future investment needs across all asset classes. In line with the CIPFA “Guide to Asset Management and Capital Planning in Local Authorities” North Ayrshire has classified its assets into six categories: The Council’s assets play a key role in the delivery of a wide range of essential services to our local communities, contribute to regeneration and help drive economic growth. The plans set out clear actions and include details of lifecycle investment costs required to maintain assets and infrastructure to an appropriate standard that supports service delivery. The plans are updated on an annual basis and chief officers across all Directorates hold the responsibility for maintaining the plans and reporting progress to the Council’s Cabinet on a bi-annual basis. A snapshot of the asset portfolio for North Ayrshire Council includes: Both capital and revenue financial resources across the General Fund and Housing Revenue Account are used to maintain the current asset base. From a capital perspective, planned investment which has been incorporated in the current Capital Investment Programme includes: Fleet and Plant •Around 570 Vehicles and items of Plant Roads • Over 1,000 Km of roads Structures •Around 400 bridges and structures Street Lighting •Over 23,000 street lighting columns Operational Buildings • Over 70 offices, libraries and community centres Council Houses •Around 13,000 Council Houses Schools and Early Years •63 Schools and Early Years Facilities Social Care •21 Social Care Facilities
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Local Housing Strategy 2023-28 and Strategic Housing Investment Plan 2024- 29 The Local Housing Strategy sets out the Council’s ambition: ‘We want all our people to live in the right homes, in great places, with access to any support services they need.” The strategy mirrors the format of Scotland’s first 20 year housing strategy, Housing to 2040 and sets out four overarching outcomes which align to the four key strategies in Housing to 2040: •Planned investment of £112.8m to 2033/34 including improvements to the roads and street lighting network, upgrading of the B714, flood prevention works at Upper Garnock and Millport and bridges infrastructure improvement. Roads, Structures and Lighting •Procurement and maintenance of all Council fleet vehicles and plant ensuring the fleet of 566 vehicles and heavy plant are maintained and operated in accordance with the Council’s Operator’s licences and Road Transport legislation. Prioritisation of emissions reductions through decarbonisation of vehicle fleet. Vehicle and plant capital investment is planned at £25.9m to 2033/34. Fleet,Plant and Equipment •To ensure Council properties meet all legislative requirements and they are sustainable, energy efficient and maintained to a high standard as well as ensuring the physical environment is able to support mobile and flexible work programmes, Investment is planned at £18.6m to 2033/34. It is also recognised that through the Estates Strategy further rationalisation and remodelling will continue to be progressed on a locality by locality basis, with capital receipts incorporated into the capital programme. Property •Underpinned by the Local Housing Strategy, the Strategic Housing Investment Plan and the 30 Year HRA Business Plan, responsibility for maintenance of around 13,000 council houses, ensuring legislative compliance and meeting the needs of tenants. In addition, delivery of an ambitious house building and improvement programme over the period 2024/25-2028/29 will see capital investment by the Council total £352.0m. Housing •The Technology Strategy sets out how ICT supports service delivery and transformation. Significant changes to our ICT infrastructure have been reflected in the ICT Asset Management Plan. To deliver on the 6 key principles as outlined in the Technology Strategy £5.6m investment to 2033/34 is planned. ICT •The service maintains 2,410 hectares of public open space, a Country Park, 14 local parks, 44 cemeteries and burial grounds, 37 war memorials & monuments, 366 hectares of woodlands, 3 allotments, 91 sports facilities and playing fields, 84 equipped play areas and 12 multi-use games areas, residential greenspace, 38 water courses and open water features, 5 promenades and 16 beaches, three of which are Sites of Special Scientific Interest. The majority of investment is delivered through the Place service revenue budget, however, specific capital investment of £2.4m is planned to 2033/34 for cemetery infrastructure. Open Spaces
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The Strategic Housing Investment Plan is an extension of, and aligns to, the Local Housing Strategy, supporting the objectives of the Council Plan. The Strategic Housing Investment Plan also aligns with the Council’s Community Wealth Building Strategy and supports the North Ayrshire Child Poverty Action Plan 2022-2023. Access to good quality and affordable housing is a key asset in addressing child poverty, and poverty overall. The SHIP will secure investment in a total of 1,302 properties across North Ayrshire and provide sustainable, affordable, accessible high-quality homes which will contribute to the wider regeneration aims for the area. The Council projects in the SHIP represent investment of £194.464m (including an estimated £78.07m Scottish Government grant funding). Developments continue to be progressed across all six localities: Public sector investment can have a transformational impact for communities, and the Council explores site and area specific opportunities with partners to secure maximum regeneration benefits. This supports the ambitions of the Council’s Regeneration Delivery Plan to drive forward place-based development on strategic regeneration sites, including town centres. Several SHIP projects completed to date are within, or near, town centres. The plan supports major housing led regeneration including the replacement of the 275 homes in the Fullarton tower blocks in Irvine and the provision of funding to assist the delivery of Housing’s Estate Based Regeneration Programme. The Strategic Housing Investment Plan prioritises new social housing developments which include the provision of outdoor green space, and which support the principles of 20-minute neighbourhoods, where feasible. Developments are also planned utilising ‘secure by design’ principles. The Council and its partners recognise that bringing former social housing stock into ownership can assist with housing management and maintenance issues and increase housing available through the North Ayrshire Housing Register. All developing registered social landlord partners with stock in North Ayrshire now have provision for buyback programmes in the SHIP. Housing to 2040 Strategy Local Housing Strategy Outcome More homes at the heart of great places Affordability and choice Affordable warmth and zero emission homes Improving the quality of all homes Our places support thriving and inclusive communities Our people have affordable homes in the place they choose to live Our homes are energy efficient and release less emissions Our homes are in good condition and people can access any support services they need Arran Garnock Valley Irvine Kilwinning North Coast Three Towns
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New housing has a key role to play in carbon reduction, climate change mitigation, and in the alleviation of fuel poverty. The Council and its partners will continue to consider innovative and sustainable approaches to heat and power, such as low carbon heat, solar photovoltaic panels and smart technologies. The Council recognises that a ‘fabric first’ approach to sustainability can provide benefits to tenants, in terms of reducing heating costs. This investment aligns to the Council’s Environmental Sustainability and Climate Change Strategy in supporting affordable warmth to households across North Ayrshire. Developments will also be designed to promote sustainable travel. All amenity and sheltered housing in North Ayrshire should be built to an ambulant housing standard as a minimum. To ensure need is met now and in the future, the new Local Housing Strategy increased the target to ensure at least 10% of all tenure new build stock is suitable for wheelchair users (increased from 7% in the previous strategy). Officers within the Place Directorate and the Health and Social Care Partnership developed a new supported accommodation housing model which has been implemented at sites across North Ayrshire to maximise tenant independence The Local Housing Strategy recognises that the proportion of older people in North Ayrshire is higher than that of Scotland as a whole. The SHIP estimates the delivery of a further 311 amenity homes and 28 sheltered housing units. Alongside the new build programme, the Council will continue to deliver its sheltered housing re- provisioning programme, which includes £25m investment in the refurbishment of sheltered housing units out with the SHIP. Regeneration Delivery Plan and Local Development Plan The Regeneration Delivery Plan sets out our priorities for delivering on the regeneration ambitions of the Council Plan and Community Wealth Building strategy, working in partnership with communities. The Plan focuses on the delivery of physical regeneration across North Ayrshire through an ambitious project-based rolling action programme. The Regeneration Delivery Plan focuses activity around the four key regeneration themes: Mission Enhancing local wealth and the creation of fair jobs and maximising the potential of all our places through working in partnership with out communities and businesses Strengthening Communities Inclusive and Green Economy Placemaking Enabling Infrastructure
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The Local Development Plan was adopted in November 2019 and aligns to the themes set out in the Regeneration Delivery Plan, it brings a targeted local context in guiding development and investment in North Ayrshire over the next 20 years. The focus is supporting and growing the business base across key sectors including manufacturing, engineering, life sciences, tourism and hospitality and regenerating towns and communities. The overarching aim of the plan is to deliver the Community Planning Partnership vision of a “Better Life” to the citizens and communities of North Ayrshire. The plan outlines the land use strategy that supports delivery of the Local Outcomes Improvement Plan 2022 – 2030 and focuses on four key strategic policies: The Spatial Strategy is an overarching policy for supporting the LOIP. This directs development to towns and villages to support communities, the economy and environment, while recognising the value that the countryside and coastal areas offer both as natural resources worthy of protection and as an economic driver. An example of directing investment to towns is evidenced by the Montgomerie Park development with Council investment in road and service infrastructure to facilitate large scale housing development and regeneration and using capital receipts from land sale as a key source of funding. The Placemaking policy supports the LOIP by ensuring that all development contributes to making quality places. This is measured by six qualities that define a successful place: Distinctive Welcoming Safe and Pleasant Adaptable Resource Efficient Easy to Move Around and Beyond
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Through the Local Development Plan eight strategic development areas have been identified: Working in partnership with the UK and Scottish Government and East Ayrshire and South Ayrshire councils, the Ayrshire Growth Deal will regenerate the region through investment in strategic infrastructure across various sectors, including life sciences, tourism, manufacturing and aerospace, with total investment of over £251.5m. From a North Ayrshire perspective and to support investment into the strategic development areas, including the Ayrshire Growth Deal and wider economic regeneration activity, the Capital Investment Programme from 2024/25 to 2033/34 includes planned investment of £70.6m. Finally, our Community Wealth Building Strategy helps to develop resilient, inclusive local economies, with more local employment and a larger and more diverse business base, ensuring that wealth is locally owned and benefits local people. All capital and revenue investment will be considered within the context of the Community Wealth Building Strategy, with maximising opportunities for local suppliers through procurement a key priority and pillar of the strategy. Technology Strategy The Technology Strategy was approved by North Ayrshire Council in August 2021 and sets out the vision, principles and key technologies that will support transformational change across North Ayrshire Council. Solutions will be designed in partnership to improve processes, service delivery and collaboration and ultimately improve outcomes. The six key Technology Strategy principles are: Hunterston Ardrossan Harbour and North Shore i3 - Irvine Montgomerie Park, Irvine Kilbirnie Irvine Harbourside Brodick Cumbrae- Millport Deliberately designed •Holistic view of the business and deliver efficient, effective and agile solutions People at the core •Solutions built around the needs of customers and people Anytime, anywhere access •Access to systems, applications and information wherever they are Cloud where appropriate •Utilise cloud based technologies where appropriate Data driven •Utilise data to effectively inform our decision making Secure by design •Operate securely whilst still taking advantage of technology innovations
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Office 365 has been a transformative technology, enabling agile working and simplifying collaboration. The ICT Asset Management Plan incorporates the technology principles and, in terms of investment, a total of £5.6m is planned to 2033/34 to deliver technology solutions aligned to this strategy. From a financial planning perspective it is also recognised the shift from capital financing to revenue through software as a service, will lead to a remodelling of the way in which ICT investment is funded. Estates Strategy The key objective of North Ayrshire Council’s Estate Strategy is to achieve rationalisation and remodelling of the Council’s property portfolio on a locality basis. The Estates Strategy plays a key role in maximising capital investment across multiple strategic priority areas, e.g. moving away from the traditional like for like school replacements to incorporating wider community campus facilities, including leisure and health and social care facilities. This approach was evidenced through the Largs campus facility which delivered primary, secondary, and early years provision as well as community use sport, theatre and leisure facilities. Through rationalisation of the Council’s property portfolio, a key funding component to support the capital programme and provide flexibility in the Council’s Revenue account, is the generation of capital receipts. Anticipated income from land and property capital receipts planned to support the capital programme totals £4.1m to 2033/34. The neighbourhood approach outlined in the Estates Strategy also recognises community empowerment and, in particular, provides support to communities for asset transfers. This engagement is progressed through the Community Planning Partnerships.
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General Fund Capital Investment Programme North Ayrshire Council takes a long-term approach to capital investment, covering a 10-year period. The plan is updated annually and 2024/25 represents year 1 of the 10-year plan. A full refresh is undertaken every 3 years. The current Capital Investment programme is aligned to the strategic priorities as set out in the Council Plan and is the product of the various plans and strategies which impact on the assets and infrastructure of North Ayrshire Council. Through the Community Planning Partnerships and the Local Development Plan there is also clear linkage to local strategic planning and local asset planning. Total capital investment of £406.5m from the Council’s General Fund is planned over the period from 2024/25 to 2033/34, supporting the 3 key strategic priorities from the Council Plan. This includes planned expenditure of £70.6m towards the Ayrshire Growth Deal to 2033/34. It is recognised that the total level of investment across Ayrshire will be in the region of £251.5m (including £103m commitments from both the UK and Scottish Governments). Capital Programme 2024/25 to 2033/34 Total Investment £406.5m
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The capital plan includes £111.7m planned investment in Education. The major areas of education investment include; Investment in education reflects the Council’s desire to ensure children and young people have access to high quality facilities which support and promote excellent learning and teaching. Well designed and well-equipped buildings also support the promotion of positive health and well-being. It is also recognised that investment in education contributes to and can be integrated within wider economic development and regeneration within the localities and this is reflected in the nature of the planned developments for Ardrossan Academy and Montgomerie Park school. Through stakeholder engagement, effective cross Directorate working within North Ayrshire Council and collaboration with other agencies including the Scottish Government, these new developments combine education provision with community facilities, residential, respite and housing provision as part of a wider focus on economic regeneration. Investing in core assets and infrastructure is key to ensuring sustainability. A planned investment of £112.8m within Roads, Structures and Lighting includes £38.0m road improvements, £22.0m on flood prevention works and £29.6m on the upgrading of the B714 following a successful application to the UK Governments Levelling Up Fund. Property lifecycle investment of £11.2m, to support the property asset management plan, will ensure Council properties continue to be maintained to the appropriate standards in delivering services to citizens and communities. The plan includes investment in several key programmes of regeneration within North Ayrshire and, in respect of the Ayrshire Growth Deal, on a wider pan Ayrshire basis. The Capital Investment Programme 2024/25 to 2033/34 sets out the ambition of North Ayrshire Council and supports the key strategic themes of the Council Plan. Through investment that supports regeneration and delivers first class education and community facilities, this strategic approach will help grow the population and the local economy. It is also recognised that key to a sustainable environment is the requirement to continue to invest in core assets and infrastructure. Universal School meals Expansion - £9.6m •Improvements to current kitchen and dining facilities across the school estate to create capacity for the anticipated uptake. Ardrossan Campus- £80.2m •New build project as part of an exciting wider community facility development Montgomerie Park school £13.0m •New primary provision linked to Montgomerie park regeneration project and housing developments Schools ICT Investment £8.9m •Investment on ICT Equipment within the School Estate Figure 1 Artist impression of Ardrossan Campus Figure 2 Artist impression of Montgomerie Park Primary School
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Funding the Capital Investment Programme Funding the Capital Investment Programme requires to be planned in an affordable and sustainable manner. The funding sources to support delivery of the £406.5m capital investment programme to 2033/34 include; The major sources of funding include assumptions on the level of general capital grant from Scottish Government to 2033/34 (£90.8m) and the level of prudential borrowing (£216.5m) required. The cost of borrowing is included within the Council’s revenue budget process through the Medium-Term Financial Plan and the impact of borrowing is included as part of the Council’s Treasury Management and Investment Strategy. The Council takes a prudent approach when phasing the capital investment over the period, with the main objective to ensure general capital grant from Scottish Government is maximised. Other income sources are also explored including external income, grants, partner contributions and capital receipts. The balance of funding is met from affordable prudential borrowing with annual loans fund repayments made to reduce the debt. This approach helps to ensure that investment in assets to deliver on the Council’s strategic priorities is sustainable in the long term. £216.5 £89.1 £90.8 £4.9 £1.1 £4.1 Funding the Capital Investment Programme £406.5million Prudential Borrowing Specific Capital Grants General Capital Grant Reserve Funds Other Grants and Contributions Capital Receipts
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Treasury Management Strategy and Loans Fund Policy The Prudential Code for Capital Finance in Local Authorities enables councils to set their own borrowing limits with a requirement to ensure that investment plans are affordable, prudent and sustainable. The Council can borrow over a number of years to supplement its capital income, provided the resultant annual debt repayments can be accommodated within future years’ revenue budgets. The Council’s annual Treasury Management and Investment Strategy sets out the prudential indicators and parameters over the medium to long term, with regular reporting to Council members through: • Annual Treasury Management and Investment Strategy • Mid-Year Treasury Update report • Annual Report following the financial year end describing the activity compared to the strategy The key prudential and treasury indicators include: • Capital expenditure and financing • The Council’s overall borrowing need (the Capital Financing Requirement) • Limits to borrowing activity through the Operational Boundary and the Authorised Limit. As reflected in the Treasury Management Strategy for 2024/25, the analysis of the Capital Financing Requirement for North Ayrshire Council indicates that the borrowing needs to support delivery of the capital programme will increase to £821.544m by 2030/31 and then reduce annually to 2033/34. The analysis also indicates that this borrowing need continues to be within the parameters of both the Operational Boundary (the expected maximum borrowing position of the Council) and the Authorised limit (the limit beyond which external debt is prohibited).
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Another key affordability indicator is the ratio of financing costs to net revenue stream. This indicator identifies the trend in the cost of capital (borrowing and other long-term liabilities, net of investment income) against the net revenue stream of the Council. The estimates of financing costs include current commitments and those arising from the capital programme. The Housing Revenue Account (HRA) costs are aligned with the 30-year business plan. The estimated ratio of debt to net revenue stream across the next 3 years averages at 4.3% for General Services and 27.7% for the HRA. From a General Fund perspective, the CIPFA Directors of Finance Performance Indicators 2022/23 show a Scottish Local Authority average of 5.4%, therefore demonstrating a prudent borrowing policy. For the HRA, the indicative Scottish average in 2022/23 was 21.4%. The rising ratio within the HRA is indicative of the significant capital investment programme as outlined in the Strategic Housing Investment Plan. The level of loan charges is deemed prudent and affordable within the framework of the 30 year Housing business plan. The Liability Benchmark, another treasury prudential indicator, is an important tool used to identify whether the Council is likely to be a long-term borrower or long-term investor, allowing it to shape its strategic focus and decision making. The liability benchmark itself represents an estimate of the cumulative amount of external borrowing the Council must hold to fund its current capital and revenue plans while keeping treasury investments at the minimum level required to manage day-to-day cash flow. 2023/24 2024/25 2025/26 2026/27 Probable Outturn Estimate Estimate Estimate % % % % General Services 2.5% 3.5% 4.4% 4.9% HRA 20.5% 24.0% 28.7% 30.5% Proportion of financing costs to net revenue stream
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Loans Fund Policy In July 2016, the Scottish Government confirmed the new Loans Fund accounting arrangements under the provisions of the Local Authority (Capital Finance and Accounting) (Scotland) Regulations 2016. This regulation requires the Council to outline its policy on the repayment of Loans Fund advances. The Loans Fund advance is effectively the repayment of the principal linked to the capital expenditure which is required to be funded from borrowing. The broad aim of prudent repayment is to ensure that the authority’s unfinanced capital expenditure is financed over the expected life of the asset and that each year’s repayment amount is reasonably commensurate with the period and pattern of the benefits. From a governance perspective the Loans Fund policy of North Ayrshire Council is included as part of the Treasury Management and Investment Strategy and submitted for approval to the North Ayrshire Council committee on an annual basis.
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Governance Having robust governance arrangements in place is key to ensuring effective strategic management of assets, from initial planning through to delivery, utilisation and disposal. North Ayrshire Council delivers a governance framework through a number of officer and member represented groups / committees. To ensure a consistent approach is adopted when considering any new capital investment, a business case framework has been developed. The framework includes key criteria across: • Aims and strategic objectives • Scope and Benefits • Options Appraisal, • Risks, Constraints & Dependencies • Procurement arrangements • Monitoring of Key milestones • Evaluation criteria & scoring • Investment costs, funding and impact on revenue All business cases are considered by the Capital Programme and Assets Group and the Executive Leadership Team, with a recommendation being made to Cabinet / Council, for inclusion of new projects into the Capital Investment Programme. A key focus when assessing potential capital investment is the alignment to the Council’s strategic priorities, with the aim being to maximise opportunities where investment meets multiple strategic priorities and where there is the potential to lever in external funding. The current governance framework is illustrated below: Cabinet North Ayrshire Council Executive Leadership Team Strategic Assets Group Service Project Boards Programme Boards Capital Programme and Assets Group
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The Strategic Assets Group provides a strategic focus on the Council’s property assets. The key objective of the group is the effective utilisation of Council assets and to reduce the public sector’s building footprint and deliver improved services from a smaller, more efficient and fit for purpose estate. Service Project Boards are chaired by Executive Directors across each Directorate area with representation from relevant service managers. Following approval by North Ayrshire Council committee on the Capital Investment Programme, the Service Project Board is responsible for ensuring robust project management is in place to deliver projects on time and within budget. Programme Boards provide a strategic focus at programme level and are chaired by the responsible Chief Officer. Each programme can include a number of individual projects across each Directorate which contribute to specific Council and programme objectives. To ensure the objectives are met the Chief Officer for the programme is responsible for strategic oversight including all projects that form part of the overall programme. The Capital Programme and Assets Group is chaired by the Head of Service (Finance) and is responsible for: • Ensuring a strategic and corporate overview of the Council’s capital programme is in place. • Developing and monitoring the Council’s capital investment programme, tracking slippage on delivery and expenditure against approved budgets. • Developing clear criteria for investment of Council resources on asset matters and assessing all investment business cases. • Developing a prudent capital receipts programme for inclusion in the Council’s Capital Programme. The Executive Leadership Team consists of the Chief Executive, Executive Director Communities, Executive Director Place, Head of Democratic Services, Head of People and ICT and Head of Finance and is responsible for advising members on the relative priorities of the Council’s long term investment needs and plays a key monitoring role in ensuring the major capital projects deliver the anticipated benefits on time and within budget. The Executive Leadership Team also considers all business cases for new areas of capital investment as well as being the escalation point for any key strategic decisions across the Capital Investment Programme prior to consideration by Cabinet or Council. Cabinet is chaired by the Leader of the Council and is the main decision-making body of the Council. It consists of member portfolio holders from the Administration. Cabinet receives regular progress reports and approves amendments to the Capital Investment Programme. North Ayrshire Council consists of all elected members and is chaired by the Provost. The Council approves the corporate framework and the medium and longer term Capital Investment Programme.
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Knowledge & Skills North Ayrshire Council employs professionally qualified and experienced staff in senior positions with responsibility for making capital expenditure, borrowing and investment decisions. The Head of Finance is a qualified accountant and holds the position of Section 95 officer for the Council. The Council’s Section 95 Officer is responsible for the proper administration of the Council’s financial affairs and is required: • to recommend treasury management policies / practices, review these regularly and monitor compliance; • to submit regular treasury management updates; • to receive and review management information; • to review the performance of the treasury management function; • to ensure the adequacy of treasury management resources and skills and the effective division of responsibilities within the treasury management function; and • to approve the appointment of external service providers. Where the Council does not have the knowledge and skills required, use is made of external advisers that are specialists in their field. The Council currently employs Arlingclose Limited as treasury management advisers to ensure that we have access to specialist knowledge and skills if required. Decisions to invest in land and property are overseen in accordance with Council policies and the priorities from our Council plan, to capitalise on its position, power and influence to deliver tangible improvements to the lives of people in North Ayrshire. These decisions are made by suitably qualified personnel including architects and surveyors. Risk There are risks inherent across all capital planning and project delivery activity. Key planning risks are managed / mitigated through detailed business case development prior to any capital investment project getting approved. From a project delivery perspective, risk registers are maintained throughout the duration of the project and in accordance with standard project management practice. The long-term view to capital investment and the development of associated strategies also play a key role in risk management. Examples include: • Development of a 10-year capital programme, considering funding and priorities in the long term • Asset Management Plans and lifecycle maintenance which inform capital plans in the long term • Treasury Management and Investment Strategy which considers borrowing levels in the long term. • Local Housing Strategy and Strategic Housing Investment Plan takes a medium and long-term view of housing and regeneration priorities.
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Conclusion The Capital Investment Strategy for North Ayrshire Council provides an overview of how capital expenditure plans, capital financing and treasury management activity contribute to the infrastructure and provision of services for the benefit of North Ayrshire communities and citizens. It is a reporting requirement of the CIPFA Prudential Code. The Strategy takes account of the Council’s strategic priorities and considers any new investment within the context of outcomes and affordability. There is also recognition of the need to balance investment between maintaining current assets and infrastructure against the ambitions for acquiring new assets. The current capital programme demonstrates an innovative approach in maximising investment across multiple strategic priority areas, with developments that incorporate education provision, community facilities, health and social care services and housing. This approach, whilst providing key services that deliver positive outcomes to communities, also contributes to the wider economic regeneration of North Ayrshire, helping to grow the population and the local economy. Working in partnership with the UK and Scottish Government and East Ayrshire and South Ayrshire councils, the Ayrshire Growth Deal will regenerate the region through investment in strategic infrastructure across various sectors, including life sciences, tourism, manufacturing and aerospace, with total investment of over £251.5m.
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Related Documents / Strategies / Plans Council Plan Local Development Plan Asset Management Plans Local Outcomes Improvement Plan Local Housing Strategy Strategic Housing Investment Plan Technology Strategy Estates Strategy 10 Year Capital Investment Programme Regeneration Delivery Plan Treasury Management and Investment Strategy Loans Fund Policy HSCP Strategic Plan Environmental,Sustainability & Climate Change Strategy