NAC 230301 DirApp Capital Investment Programme 2023-24 to 2030-31
North Ayrshire Council · 1 March 2023
Back to North Ayrshire Council — 1 March 2023 and its agenda
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NORTH AYRSHIRE COUNCIL 1 March 2023 North Ayrshire Council Title: Capital Investment Programme 2023/24 to 2030/31 Purpose: To advise Council on the draft Capital Investment Programme to 2030/31 Recommendation: That Council : (a) approves the refreshed Capital Investment Programme to 2030/31 included in appendix 3; (b) notes that the programme will be reviewed on an on-going basis with the next major review in 2023/24; and (c) approves the refreshed Capital Investment Strategy included in appendix 4. 1. Executive Summary 1.1 The General Services Capital Investment Programme 2021/22 to 2030/31 was approved by Council on 4 March 2021. This report outlines the recommendations of the refresh of the Capital Investment Programme carried out during 2022/23. The next full review of the Programme will be carried out during 2023/24. 1.2 The refresh has incorporated all funding sources to 2030/31, 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 £205.649m. The balance of funding required to deliver the capital programme will be met through prudential borrowing and this is anticipated at £228.422m. 1.3 The refresh 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; • Changes to funding from core capital grants and other sources of income; • 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.
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1.4 The proposed refreshed Capital Investment Programme aligned to the Council Plan priorities, attached in Appendix 3, will deliver a total programme of £434.071m to 2030/31. 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. As part of the next major review of the capital programme, due to be undertaken during 2023/24, a review of the available General Fund financing budgets will be carried out with a view to increasing the available funding to maintain these Programmes. 1.7 In addition to the TMIS, there is also a requirement for the Council to publish a Capital Investment Strategy (CIS). As part of the review of the Capital Investment Programme, a refresh of the current CIS has been undertaken during 2022/23. The refreshed Strategy is attached at Appendix 4. 1.8 The Capital Investment Programme will continue to be reviewed on an on-going basis with any additional funding requests brought forward for approval as appropriate. Major reviews will be undertaken on a 3-year basis, with the next due to be completed during 2023/24. 2. Background Capital Investment Programme 2023/24 to 2030/31 2.1 North Ayrshire Council approved the current Capital Investment Programme for the period to 2021/22 to 2030/31 on 4 March 2021. A refresh of the programme was undertaken during 2022/23. This report contains the outcome of the refresh. Review of Capital Funding Scottish Government General Capital Grants 2.2 Local Government Finance Circular 11/2022 confirmed the level of General Capital Grant as £35.704m for 2023/24. This includes £20.525m capital flood grant to support the ongoing schemes, £1.959m to support the expansion of Universal Free School Meals and £3.213m as a contribution towards the 2022/23 local government pay settlement. Excluding these elements, the General Capital Grant has been confirmed at £10.007m, which is an increase of £0.201m from that previously anticipated. Projected at this level to 2030/31, the total General Capital Grant for the period is forecast as £105.753m.
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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: • £1.506m to tackle Vacant and Derelict Land with projects requiring Scottish Government approval; and • £0.586m, to fund Cycling, Walking and Safer Streets (CWSS). The Vacant and Derelict Land funding has only been confirmed for 2023/24. However, the CWSS funding has been projected at current levels to 2030/31. 2.4 In addition, the programme includes previous Specific Grant allocations in relation to these programmes which have been carried over into 2023/24 in line with revised project plans, including: • £2.351m from the 2022/23 Vacant and Derelict Land allocation; and • £0.574m from the 2022/23 CWSS allocation. 2.5 A further Specific Grant allocation of £1.156m to support the Renewal of Play Parks programme has been confirmed outwith the Local Government Finance Settlement for the period 2023/24 to 2025/26. As a result, the total forecast Specific Grant income to 2030/31 is £10.275m. Levelling Up Fund 2.6 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. £22.481m of this award is anticipated for receipt during financial years 2023/24 to 2025/26. Although additional cost risks have been identified in relation to this project, it has been confirmed that no additional funding will be available from the UK Government. Appropriate value engineering will continue to be undertaken as part of the business case development. 2.7 The current award is subject to approval of a full business case and the provision of 10% match funding. This has been achieved through a £2.370m allocation from the Recovery and Renewal Fund, although this has been reduced to £1.235m to facilitate the transfer of the General Capital Grant support for the 2022/23 pay settlement to Revenue to align to the anticipated costs. Other Internal Funds 2.8 The programme includes a previously approved contribution of £2.078m from the Investment Fund to support the Solar PV project. However, this has been reduced to £nil to facilitate the transfer of the General Capital Grant support for the 2022/23 pay settlement to Revenue. Capital Receipts 2.9 A review of projected income from capital receipts has been undertaken during 2022/23. 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.
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Other External Funding 2.10 The programme includes funding from the Scottish and UK Governments to support the Ayrshire Growth Deal. The total anticipated funding over the period is £58.792m. This has been aligned to the latest programme planning information. However, it is recognised that expenditure profiles and funding will be subject to ongoing review on a pan Ayrshire basis. 2.11 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 ERDF 0.697 Low Carbon Hub NAVT 0.800 Marine Tourism NAVT 0.425 Annickbank Phase 3 NAVT 0.101 Irvine Enterprise Area Sustrans 0.095 Access Paths Coastal Connections Sustrans 0.033 B777 Corridor Improvements Transport Scotland 0.523 Low Carbon Hub Transport Scotland 0.296 A737 Dalry Trunk Road £2.970m Prudential Borrowing 2.12 The difference between the Council's Capital Investment Programme and funding from the above sources is met through prudential borrowing of £228.422m. The proposed revisions to 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. Future Affordability 2.13 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. 2.14 Due to the significant investment planned by North Ayrshire Council over the period to 2030/31 combined with the additional cost pressures identified across a number of projects, it is projected that these funds will be exhausted by the end of the current 10 year Capital Investment Programme. In order to ensure the affordability of current and future capital investments beyond the term of the current programme, it will be necessary to incrementally increase the current General Fund financing budgets over the remaining period of the programme. Additional funding support to mitigate the significant cost increases and increased cost of borrowing includes the re-direction of the reversal of employers’ national insurance contribution totalling £1.179m per annum from 2023/24 and the use of the recurring element of the Service Concession flexibility approved at Council on 15 February 2023, which results in an average contribution of £3.437m from 2022/23.
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2.15 It is also necessary to include an indicative pressure within the Revenue Estimates 2023/24 to 2025/26. This includes an incremental contribution of £0.250m per annum across this period and, as part of the next major review of the capital programme due to be undertaken during 2023/24, a review of the available General Fund financing budgets will be carried out with a view to making appropriate provisions within future revenue budgets to maintain the affordability of the current and future capital programmes in the longer term. At this time the likely revenue contributions required total £0.340m per annum from 2026/27 to 2030/31.This will be subject to further review during 2023/24. Refresh of the Capital Investment Programme to 2030/31 2.16 The refresh of the Capital Investment Programme to 2030/31 incorporates the re- profiling of a number of projects to better reflect current projected timelines and revised levels of investment that take cognisance of the Council’s key priorities, funding availability and lifecycle maintenance requirements informed through asset management plans. Re-Profiling 2.17 A total of £77.874m of planned expenditure has been re-profiled from 2022/23 into 2023/24 to 2030/31 in line with updated project delivery timelines. Full details of individual projects re-phased from 2022/23 have been reported to Cabinet throughout the year. 2.18 A review of the latest programme planning information in relation to the Ayrshire Growth Deal (AGD) has resulted in a re-profiling of £3.201m of expenditure into 2023/24 to 2030/31. Additional Investments linked to Revised Funding 2.19 Funding to support the Millport Coastal Flood Protection was previously approved based on 80% funding from the Scottish Government and 20% funding from North Ayrshire Council. Following a tender evaluation exercise, it was identified that the project had been significantly impacted by construction industry inflation arising from material shortages and uncertainty linked to several external factors, including the Covid-19 pandemic and the ongoing war in the Ukraine. As noted by Cabinet on 1 November 2022, the increased expenditure required to complete the scheme has been identified as £21.547m. The Scottish Government has approved an additional contribution of £17.237m with the balance of the additional investment to be supported by a £4.310m contribution from the current Flexibility budget. The additional Scottish Government contribution has been confirmed within the 2023/24 General Capital Grant. 2.20 Following a review of the Ardrossan Community Campus and associated delivery programmes, it has been identified that the international supply chain issues and significant levels of construction inflation, influenced by the above noted global events, have resulted in rising cost estimates for both the Ardrossan Community Campus and the Ardrossan North Shore enabling works. This has been further exacerbated by material and labour shortages and a reduction in overall contractor risk appetite. Following completion of a 10 point plan, including contractor engagement, options
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appraisal workshops and additional value engineering, and based on the latest cost estimate information available, additional investment requirements of £14.767m for the Ardrossan North Shore project and £8.635m for the Ardrossan and Community Campus have been identified. Following engagement with the Scottish Futures Trust, they have confirmed that, subject to formal notification from the Scottish Government, additional revenue support totalling £14.916m will be provided over the 25-year funding cycle. These funds will be utilised to partly offset the additional borrowing costs associated with the additional investment noted above. It should also be noted that £0.520m of the additional investment on the Ardrossan North Shore project will be supported by a contribution from the 2022/23 Vacant and Derelict Land specific grant. Additional Investments 2.21 Following completion of the Stage 2 cost estimates in relation to the Montgomerie Park School and consideration of value engineering workshops, additional cost estimates of £8.979m have been identified, and this is linked to general construction industry inflation. Following the utilisation of £2.549m from the current Flexibility budget, it is proposed that an additional £6.430m is agreed. Options in relation to alternative sources of funding will continue to be explored and progressed to further mitigate this position, including further engagement with Scottish Futures Trust as it is recognised that current market conditions have increased the costs relative to the proportionate level of funding previously agreed. 2.22 Additional expenditure projections of £0.930m have been identified in relation to the Largs Promenade Seawall project. These are primarily related to ongoing construction industry inflation arising from material shortages and uncertainty linked to external global economic factors. 2.23 The 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 the war in Ukraine and its impact on global supply chains; material and labour shortages; and increased demand linked to reduced contractor availability. This has resulted in a number of increased cost risks being identified across the current Capital Investment Programme. 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 Upper Garnock Flood Protection Scheme, Moorpark Primary School and Ardrossan Harbour Landside works. In order to support the management of these risks, it is proposed that an additional £10.000m investment is included within the Flexibility budget over the next four years. 2.24 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 refresh, as outlined above, are included in appendix 2. The revised Capital Investment Programme covering the period from 2023/24 to 2030/31 is included in appendix 3. This will deliver a total programme of investment of £434.071m.
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Revenue Implications 2.25 The revenue implications of both the individual projects included within the draft Programme and the additional borrowing costs associated with the overall draft Programme have been incorporated within the Medium Term Financial Plan 2023/24 to 2025/26. Any further revenue implications associated with those projects which are still to be finalised will be reported once the detailed business cases have been finalised. Treasury Management and Investment Strategy (TMIS) 2.26 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 2.27 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 4 March 2021. During 2022/23 this has been refreshed with the revised CIS included at Appendix 4. Learning Estate Review 2.28 A comprehensive review of North Ayrshire Council’s learning estate is currently underway. This review will take account of the condition, suitability and sufficiency of the current learning estate in order to develop a strategy for key investment priorities. These priorities will be aligned to a locality approach which provides the right services in the right areas, addressing the requirements of the communities they serve by ensuring that capacity is available locally for the longer term, even within localities where the birth rate may be experiencing a decline in the short to medium term. It is anticipated that the outcomes of this review will be incorporated within the next major review of the capital programme, due for completion during 2023/24. Conclusion 2.29 The refreshed Capital Investment Programme 2023/24 to 2030/31, including proposed funding, is attached at Appendix 3. This confirms total investment of £434.071m over the period. The proposed investment aligns with the Council's key priorities, as set out in the Council Plan 2019-2024, core asset management plans and the refreshed Capital Investment Strategy, included at Appendix 4.
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2.30 The programme is affordable based on the estimated funding streams set out in the 2023/24 to 2025/26 Medium Term Financial Plan and from the mitigating actions noted earlier in this report to supplement the Loans Fund. It is evident that through a combination of significant cost volatility impacting on major projects along with an increased cost of borrowing, this has contributed to a very challenging financial landscape. The affordability of the Programme is also highlighted in the Treasury Management and Investment Strategy reported elsewhere on the agenda and a further assessment will be undertaken as part of the next major review of the capital programme due for completion during 2023/24. 3. Proposals 3.1 It is proposed that Council : (a) approves the refreshed Capital Investment Programme to 2030/31 included in appendix 3; (b) notes that the programme will be reviewed on an on-going basis with the next major review in 2023/24; 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 will require to be undertaken with a view to increasing the available funding to maintain the future affordability of the current and future capital programmes. 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 programme and project basis. Legal 4.3 None.
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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 2023/24 to 2030/31 supports the delivery of the outcomes as outlined in the Council Plan 2019-2024. 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 2022/23 to 2030/31 – North Ayrshire Council 2 March 2022
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Appendix 1 Project Description Revised 23/24 Revised 24/25 Revised 25/26 Revised 26/27 Revised 27/28 Revised 28/29 Revised 29/30 Revised 30/31 Total £ EXPENDITURE Category Communities Moorpark Primary Specific Project Montgomerie Park School Specific Project 5,058,458 5,058,458 Universal Free School Meals Expansion Specific Project 1,128,000 1,128,000 Schools ICT Investment Specific Project 752,000 752,000 752,000 752,000 752,000 752,000 752,000 752,000 6,016,000 Kilwinning Estate Learning Envt Specific Project Ardrossan New Build Specific Project 36,078,934 21,347,775 1,270,000 58,696,709 Abbey Tower Specific Project Sub Total 43,017,392 22,099,775 2,022,000 752,000 752,000 752,000 752,000 752,000 70,899,167 Chief Executive ICT Investment Fund Specific Project 255,000 288,400 282,600 702,600 297,600 282,600 282,600 297,600 2,689,000 WAN Specific Project 500,000 500,000 LAN/WiFi Specific Project 1,500,000 1,500,000 Telephony Specific Project 650,000 650,000 Sub Total 255,000 288,400 282,600 702,600 2,947,600 282,600 282,600 297,600 5,339,000 Health & Social Care Partnership Community Alarms - Analogue to Digital Specific Project 333,000 333,000 666,000 Care First Replacement Specific Project Sub Total 333,000 333,000 666,000 North Ayrshire Council Approved Capital Programme 2023/24 - 2031/32 (BASE)
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Appendix 1 Project Description Revised 23/24 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 2023/24 - 2031/32 (BASE) Place Roads Improvement / Reconstruction Recurring 4,300,000 3,800,000 3,800,000 3,800,000 3,800,000 3,800,000 3,800,000 3,800,000 30,900,000 A737 Dalry Bypass Specific Project Traffic Calming Specific Project Lighting Recurring 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 8,000,000 Upper Garnock FPS External Funding Millport Coastal FPS External Funding 12,635,000 3,874,768 16,509,768 Millport Pier Specific Project 349,920 349,920 Millburn FPS External Funding 234,000 234,000 Bridges infrastructure programme Recurring 560,000 560,000 560,000 560,000 560,000 560,000 560,000 460,000 4,380,000 Largs Promenade Seawall Specific Project 2,725,532 42,000 2,767,532 B714 Improvements Specific Project 8,305,898 16,702,478 25,008,376 Property lifecycle investment Recurring 1,000,000 1,000,000 1,000,000 1,000,000 1,100,000 1,000,000 1,000,000 1,000,000 8,100,000 HOME Specific Project Improvement grants Recurring 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 4,000,000 Cemetery extns, walls & infra Specific Project 437,681 300,000 268,162 23,042 1,028,885 Kilwinning Cemetery Specific Project West Kilbride Cemetery Specific Project Stevenston Cemetery Specific Project Kilbirnie Cemetery Specific Project 200,000 200,000 400,000 Ardrossan Cemetery Specific Project 438,273 300,000 738,273 Brodick Cemetery Specific Project Kilbirnie Cemetery Wall Specific Project 4,003 4,003 Beith Cemetery-Wall Repairs Specific Project 1,860 1,860 Abbey Tower Cemetery Wall Specific Project 2,030 2,030 Hawkhill Cemetery-Wall Repairs Specific Project 2,311 2,311 West Kilbride Cemetery Walls Specific Project 2,115 2,115 Goldcraigs Refurbishment Specific Project Renewal of Play Parks External Funding Vehicles Recurring 2,750,000 1,022,023 2,000,000 2,977,977 2,000,000 2,000,000 2,000,000 2,000,000 16,750,000 Fleet Decarbonisation Core Infrastructure, property and Vehicles Renewal Investment Recurring Shewalton landfill Specific Project 150,000 150,000 Solar PV Investment Specific Project Dockhead Street Saltcoats Specific Project Montgomerie Park Masterplan Specific Project 50,000 100,000 850,000 350,000 490,000 500,000 2,340,000 VDLF 2023/24 Allocation External Funding VDLF - Annickbank Ph 3 External Funding VDLF - Development Work External Funding VDLF - Tree Planting External Funding Cycling / Walker / Safer Streets External Funding 588,000 588,000 588,000 588,000 588,000 588,000 588,000 588,000 4,704,000 Access Paths Network Programme Specific Project 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 400,000 B777 Corridor Improvements External Funding
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Appendix 1 Project Description Revised 23/24 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 2023/24 - 2031/32 (BASE) Growth & Investment Ayrshire Growth Deal: External Funding AGD - i3 DPMC Phase 1 External Funding 250,000 250,000 500,000 AGD - i3 DPMC Phase 2 External Funding 1,000,000 2,897,000 499,450 4,396,450 AGD - i3 Flexible Business Space External Funding 2,319,964 2,946,078 3,506,500 2,305,000 1,873,500 90,000 13,041,042 AGD - Hunterston - Centre for Low Carbon Energy & Circular Economy External Funding 200,000 338,000 3,400,000 3,400,000 3,400,000 3,400,000 3,384,504 17,522,504 AGD - Great Harbour External Funding 2,050,000 6,578,000 4,170,784 12,798,784 AGD - IMSE External Funding 250,000 250,000 3,200,000 3,250,000 3,252,759 10,202,759 AGD Marine Tourism - Ardrossan External Funding 600,000 4,700,000 3,592,150 1,711,050 111,000 10,714,200 AGD Marine Tourism - Arran External Funding AGD Marine Tourism - Cumbrae External Funding Ardrossan Harbour & Landside Specific Project 750,000 2,000,000 794,655 3,544,655 Irvine Enterprise Area Specific Project Low Carbon Hub Specific Project Ardrossan North Shore External Funding VDLF - Harbour Masters Office External Funding VDLF - I3 Irvine Enterprise External Funding Sub Total 43,156,667 50,248,267 28,979,701 21,265,069 19,235,259 13,338,000 13,372,504 9,898,000 199,493,467 Other Flexibility / Infrastructure Fund Specific Project 2,500,000 2,500,000 2,500,000 62,125 1,530,400 9,092,525 Sub Total 2,500,000 2,500,000 2,500,000 62,125 1,530,400 9,092,525 TOTAL EXPENDITURE 89,262,059 75,469,442 33,784,301 22,719,669 22,996,984 14,372,600 14,407,104 12,478,000 285,490,159 Revised 23/24 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 53,738,487 30,473,297 9,172,567 3,513,381 5,705,471 513,600 629,600 103,746,403 Specific Grants - AGD 6,177,174 14,001,667 14,218,734 8,813,288 6,898,513 3,466,000 3,384,504 56,959,880 Specific Grants - Cycling, Walking & Safer Streets 588,000 588,000 588,000 588,000 588,000 588,000 588,000 588,000 4,704,000 Specific Grants - Vacant & Derelict Funding Specific Grants - B714 Improvements 8,305,898 14,332,478 22,638,376 Specific Grants - Renewal of Play Parks General Capital Grant - Flooding 10,295,000 3,099,000 13,394,000 General Capital Grant 9,805,000 9,805,000 9,805,000 9,805,000 9,805,000 9,805,000 9,805,000 9,805,000 78,440,000 Investment Fund Renewal & Recovery 2,370,000 2,370,000 Grants & Contributions 800,000 800,000 Sale of land & buildings 352,500 2,085,000 2,437,500 TOTAL INCOME 89,262,059 75,469,442 33,784,301 22,719,669 22,996,984 14,372,600 14,407,104 12,478,000 285,490,159
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Appendix 2 Project Description Changes 23/24 Changes 24/25 Changes 25/26 Changes 26/27 Changes 27/28 Changes 28/29 Changes 29/30 Changes 30/31 Total £ EXPENDITURE Category Communities Moorpark Primary Specific Project 4,948,634 4,948,634 Montgomerie Park School Specific Project 1,941,542 15,413,953 17,355,495 Universal Free School Meals Expansion Specific Project (434,083) 122,420 1,538,830 2,090,270 1,944,294 333,087 3,067,241 8,662,059 Schools ICT Investment Specific Project (82,378) (82,378) Kilwinning Estate Learning Envt Specific Project 323,080 323,080 Ardrossan New Build Specific Project (31,430,814) (6,164,537) 17,730,185 35,238,359 4,600,000 19,973,193 Abbey Tower Specific Project 66,064 66,064 Sub Total (24,667,955) 9,371,836 19,269,015 37,328,629 6,544,294 333,087 3,067,241 51,246,147 Chief Executive ICT Investment Fund Specific Project 183,796 94,000 94,000 371,796 WAN Specific Project LAN/WiFi Specific Project 110,000 110,000 Telephony Specific Project 250,000 250,000 Sub Total 543,796 94,000 94,000 731,796 Health & Social Care Partnership Community Alarms - Analogue to Digital Specific Project 323,810 323,810 Care First Replacement Specific Project 100,000 100,000 Sub Total 423,810 423,810 North Ayrshire Council Revised Capital Programme 2022/23 - 2030/31
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Appendix 2 Project Description Changes 23/24 Changes 24/25 Changes 25/26 Changes 26/27 Changes 27/28 Changes 28/29 Changes 29/30 Changes 30/31 Total £ North Ayrshire Council Revised Capital Programme 2022/23 - 2030/31 Place Roads Improvement / Reconstruction Recurring 100,000 100,000 A737 Dalry Bypass Specific Project 295,690 295,690 Traffic Calming Specific Project 75,000 75,000 Lighting Recurring Upper Garnock FPS External Funding 300,000 300,000 Millport Coastal FPS External Funding 13,365,000 16,160,232 29,525,232 Millport Pier Specific Project Millburn FPS External Funding 166,000 1,109,982 1,275,982 Bridges infrastructure programme Recurring 340,000 394,564 734,564 Largs Promenade Seawall Specific Project 972,000 (42,000) 930,000 B714 Improvements Specific Project (7,805,898) (8,702,478) 16,351,443 (156,933) Property lifecycle investment Recurring 632,683 632,683 HOME Specific Project 3,099,062 1,033,021 4,132,083 Improvement grants Recurring Cemetery extns, walls & infra Specific Project (358,875) (358,875) Kilwinning Cemetery Specific Project 198,328 198,328 West Kilbride Cemetery Specific Project 7,506 7,506 Stevenston Cemetery Specific Project 33,610 33,610 Kilbirnie Cemetery Specific Project 189,227 189,227 Ardrossan Cemetery Specific Project 161,727 161,727 Brodick Cemetery Specific Project 4,979 4,979 Kilbirnie Cemetery Wall Specific Project 94,367 94,367 Beith Cemetery-Wall Repairs Specific Project 45,093 45,093 Abbey Tower Cemetery Wall Specific Project 90,000 90,000 Hawkhill Cemetery-Wall Repairs Specific Project 104,610 104,610 West Kilbride Cemetery Walls Specific Project 95,000 95,000 Goldcraigs Refurbishment Specific Project 484,000 484,000 Renewal of Play Parks External Funding 231,000 347,000 578,000 1,156,000 Vehicles Recurring (1,250,000) (1,250,000) Fleet Decarbonisation Specific Project 1,750,000 1,750,000 Core Infrastructure, property and Vehicles Renewal Investment Recurring 608,000 608,000 Shewalton landfill Specific Project (150,000) (150,000) Solar PV Investment Specific Project 6,224,560 6,224,560 Dockhead Street Saltcoats Specific Project 100,000 100,000 Montgomerie Park Masterplan Specific Project 250,000 (250,000) VDLF 2023/24 Allocation External Funding 1,506,000 1,506,000 VDLF - Annickbank Ph 3 External Funding 948,959 948,959 VDLF - Development Work External Funding 145,738 145,738 VDLF - Tree Planting External Funding 40,000 40,000 Cycling / Walker / Safer Streets External Funding 571,954 (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) 557,954 Access Paths Network Programme Specific Project 444,603 444,603 B777 Corridor Improvements 33,600 33,600
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Appendix 2 Project Description Changes 23/24 Changes 24/25 Changes 25/26 Changes 26/27 Changes 27/28 Changes 28/29 Changes 29/30 Changes 30/31 Total £ North Ayrshire Council Revised Capital Programme 2022/23 - 2030/31 Growth & Investment Ayrshire Growth Deal: External Funding AGD - i3 DPMC Phase 1 External Funding 150,000 144,551 294,551 AGD - i3 DPMC Phase 2 External Funding (800,000) (2,497,000) 1,500,550 2,150,030 353,580 AGD - i3 Flexible Business Space External Funding 833,036 (1,968,078) (1,087,500) 5,286,500 (1,461,682) (90,000) 1,512,276 AGD - Hunterston - Centre for Low Carbon Energy & Circular Economy External Funding (3,000) (3,065,000) 796,000 796,000 796,000 811,377 131,377 AGD - Great Harbour External Funding (1,645,000) (2,553,000) 17,216 2,335,000 2,221,000 86,000 88,474 549,690 AGD - IMSE External Funding (250,000) (250,000) (2,950,000) (2,976,260) (52,759) 3,250,000 3,250,000 20,981 AGD Marine Tourism - Ardrossan External Funding (150,000) (4,188,000) 907,850 (21,429) (111,000) (3,562,579) AGD Marine Tourism - Arran 30,000 30,000 40,000 150,000 1,600,000 104,611 1,954,611 AGD Marine Tourism - Cumbrae 50,000 50,000 150,000 1,600,000 96,750 1,946,750 Ardrossan Harbour & Landside Specific Project (700,000) (206,299) 999,047 92,748 Irvine Enterprise Area Specific Project 103,079 103,079 Low Carbon Hub Specific Project 1,219,518 1,219,518 Ardrossan North Shore External Funding 26,086,977 10,912,238 1,694,804 38,694,019 VDLF - Harbour Masters Office External Funding 136,778 136,778 VDLF - I3 Irvine Enterprise External Funding 714,525 714,525 Sub Total 49,969,357 9,872,812 15,134,410 9,317,841 2,686,309 4,144,611 4,147,851 (2,000) 95,271,191 Other Flexibility / Infrastructure Fund Specific Project 400,000 (2,500,000) 4,500,000 100,000 (62,125) (1,530,400) 907,475 Sub Total 400,000 (2,500,000) 4,500,000 100,000 (62,125) (1,530,400) 907,475 TOTAL EXPENDITURE 26,669,008 16,838,648 38,997,425 46,746,470 9,168,478 4,477,698 7,215,092 (1,532,400) 148,580,419 Changes 23/24 Changes 24/25 Changes 25/26 Changes 26/27 Changes 27/28 Changes 28/29 Changes 29/30 Changes 30/31 Total £ £ £ £ £ £ £ INCOME Prudential Borrowing 14,553,444 38,289,514 24,010,716 46,960,758 7,467,991 704,952 (7,664,658) 352,600 124,675,317 Specific Grants - AGD (2,524,174) (9,162,667) (5,819,734) (414,288) 1,500,487 3,572,746 14,679,750 1,832,120 Specific Grants - Cycling, Walking & Safer Streets 571,954 (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) 557,954 Specific Grants - Vacant & Derelict Funding 3,857,216 3,857,216 Specific Grants - B714 Improvements (7,805,898) (8,702,478) 16,351,443 (156,933) Specific Grants - Renewal of Play Parks 231,000 347,000 578,000 1,156,000 General Capital Grant - Flooding 10,230,000 (3,099,000) 7,131,000 General Capital Grant 5,374,000 202,000 202,000 202,000 202,000 202,000 202,000 202,000 6,788,000 Investment Fund Renewal & Recovery (1,134,820) (1,134,820) Grants & Contributions 2,068,411 101,099 2,169,510 Sale of land & buildings 113,055 3,677,000 (2,085,000) 1,705,055 TOTAL INCOME 26,669,008 16,838,648 38,997,425 46,746,470 9,168,478 4,477,698 7,215,092 (1,532,400) 148,580,419
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Appendix 3 Project Description Revised 23/24 Revised 24/25 Revised 25/26 Revised 26/27 Revised 27/28 Revised 28/29 Revised 29/30 Revised 30/31 Total £ EXPENDITURE Category Communities Moorpark Primary Specific Project 4,948,634 4,948,634 Montgomerie Park School Specific Project 7,000,000 15,413,953 22,413,953 Universal Free School Meals Expansion Specific Project 693,917 122,420 1,538,830 2,090,270 1,944,294 333,087 3,067,241 9,790,059 Schools ICT Investment Specific Project 669,622 752,000 752,000 752,000 752,000 752,000 752,000 752,000 5,933,622 Kilwinning Estate Learning Envt Specific Project 323,080 323,080 Ardrossan New Build Specific Project 4,648,120 15,183,238 19,000,185 35,238,359 4,600,000 78,669,902 Abbey Tower Specific Project 66,064 66,064 Sub Total 18,349,437 31,471,611 21,291,015 38,080,629 7,296,294 1,085,087 3,819,241 752,000 122,145,314 Chief Executive ICT Investment Fund Specific Project 438,796 382,400 376,600 702,600 297,600 282,600 282,600 297,600 3,060,796 WAN Specific Project 500,000 500,000 LAN/WiFi Specific Project 110,000 1,500,000 1,610,000 Telephony Specific Project 250,000 650,000 900,000 Sub Total 798,796 382,400 376,600 702,600 2,947,600 282,600 282,600 297,600 6,070,796 Health & Social Care Partnership Community Alarms - Analogue to Digital Specific Project 656,810 333,000 989,810 Care First Replacement Specific Project 100,000 100,000 Sub Total 756,810 333,000 1,089,810 North Ayrshire Council Revised Capital Programme 2023/24 - 2031/32
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Appendix 3 Project Description Revised 23/24 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 Revised Capital Programme 2023/24 - 2031/32 Place Roads Improvement / Reconstruction Recurring 4,400,000 3,800,000 3,800,000 3,800,000 3,800,000 3,800,000 3,800,000 3,800,000 31,000,000 A737 Dalry Bypass Specific Project 295,690 295,690 Traffic Calming Specific Project 75,000 75,000 Lighting Recurring 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 8,000,000 Upper Garnock FPS External Funding 300,000 300,000 Millport Coastal FPS External Funding 26,000,000 20,035,000 46,035,000 Millport Pier Specific Project 349,920 349,920 Millburn FPS External Funding 400,000 1,109,982 1,509,982 Bridges infrastructure programme Recurring 900,000 954,564 560,000 560,000 560,000 560,000 560,000 460,000 5,114,564 Largs Promenade Seawall Specific Project 3,697,532 3,697,532 B714 Improvements Specific Project 500,000 8,000,000 16,351,443 24,851,443 Property lifecycle investment Recurring 1,632,683 1,000,000 1,000,000 1,000,000 1,100,000 1,000,000 1,000,000 1,000,000 8,732,683 HOME Specific Project 3,099,062 1,033,021 4,132,083 Improvement grants Recurring 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 4,000,000 Cemetery extns, walls & infra Specific Project 78,806 300,000 268,162 23,042 670,010 Kilwinning Cemetery Specific Project 198,328 198,328 West Kilbride Cemetery Specific Project 7,506 7,506 Stevenston Cemetery Specific Project 33,610 33,610 Kilbirnie Cemetery Specific Project 389,227 200,000 589,227 Ardrossan Cemetery Specific Project 600,000 300,000 900,000 Brodick Cemetery Specific Project 4,979 4,979 Kilbirnie Cemetery Wall Specific Project 98,370 98,370 Beith Cemetery-Wall Repairs Specific Project 46,953 46,953 Abbey Tower Cemetery Wall Specific Project 92,030 92,030 Hawkhill Cemetery-Wall Repairs Specific Project 106,921 106,921 West Kilbride Cemetery Walls Specific Project 97,115 97,115 Goldcraigs Refurbishment Specific Project 484,000 484,000 Renewal of Play Parks External Funding 231,000 347,000 578,000 1,156,000 Vehicles Recurring 1,500,000 1,022,023 2,000,000 2,977,977 2,000,000 2,000,000 2,000,000 2,000,000 15,500,000 Fleet Decarbonisation Specific Project 1,750,000 1,750,000 Core Infrastructure, property and Vehicles Renewal Investment Recurring 608,000 608,000 Shewalton landfill Specific Project Solar PV Investment Specific Project 6,224,560 6,224,560 Dockhead Street Saltcoats Specific Project 100,000 100,000 Montgomerie Park Masterplan Specific Project 250,000 50,000 100,000 600,000 350,000 490,000 500,000 2,340,000 VDLF 2023/24 Allocation External Funding 1,506,000 1,506,000 VDLF - Annickbank Ph 3 External Funding 948,959 948,959 VDLF - Development Work External Funding 145,738 145,738 VDLF - Tree Planting External Funding 40,000 40,000 Cycling / Walker / Safer Streets External Funding 1,159,954 586,000 586,000 586,000 586,000 586,000 586,000 586,000 5,261,954 Access Paths Network Programme Specific Project 494,603 50,000 50,000 50,000 50,000 50,000 50,000 50,000 844,603 B777 Corridor Improvements Specific Project 33,600 33,600
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Appendix 3 Project Description Revised 23/24 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 Revised Capital Programme 2023/24 - 2031/32 Growth & Investment Ayrshire Growth Deal: AGD - i3 DPMC Phase 1 External Funding 400,000 394,551 794,551 AGD - i3 DPMC Phase 2 External Funding 200,000 400,000 2,000,000 2,150,030 4,750,030 AGD - i3 Flexible Business Space External Funding 3,153,000 978,000 2,419,000 7,591,500 411,818 14,553,318 AGD - Hunterston - Centre for Low Carbon Energy & Circular Economy External Funding 200,000 335,000 335,000 4,196,000 4,196,000 4,196,000 4,195,881 17,653,881 AGD - Great Harbour External Funding 405,000 4,025,000 4,188,000 2,335,000 2,221,000 86,000 88,474 13,348,474 AGD - IMSE External Funding 250,000 273,740 3,200,000 3,250,000 3,250,000 10,223,740 AGD Marine Tourism - Ardrossan External Funding 450,000 512,000 4,500,000 1,689,621 7,151,621 AGD Marine Tourism - Arran External Funding 30,000 30,000 40,000 150,000 1,600,000 104,611 1,954,611 AGD Marine Tourism - Cumbrae External Funding 50,000 50,000 150,000 1,600,000 96,750 1,946,750 Ardrossan Harbour & Landside Specific Project 50,000 1,793,701 1,793,702 3,637,403 Irvine Enterprise Area Specific Project 103,079 103,079 Low Carbon Hub Specific Project 1,219,518 1,219,518 Ardrossan North Shore External Funding 26,086,977 10,912,238 1,694,804 38,694,019 VDLF - Harbour Masters Office External Funding 136,778 136,778 VDLF - I3 Irvine Enterprise External Funding 714,525 714,525 Sub Total 93,126,024 60,121,079 44,114,111 30,582,910 21,921,568 17,482,611 17,520,355 9,896,000 294,764,658 Other Flexibility / Infrastructure Fund Specific Project 2,900,000 7,000,000 100,000 10,000,000 Sub Total 2,900,000 7,000,000 100,000 10,000,000 TOTAL EXPENDITURE 115,931,067 92,308,090 72,781,726 69,466,139 32,165,462 18,850,298 21,622,196 10,945,600 434,070,578 Revised 23/24 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 68,291,931 68,762,811 33,183,283 50,474,139 13,173,462 1,218,552 (7,035,058) 352,600 228,421,720 Specific Grants - AGD 3,653,000 4,839,000 8,399,000 8,399,000 8,399,000 7,038,746 18,064,254 58,792,000 Specific Grants - Cycling, Walking & Safer Streets 1,159,954 586,000 586,000 586,000 586,000 586,000 586,000 586,000 5,261,954 Specific Grants - Vacant & Derelict Funding 3,857,216 3,857,216 Specific Grants - B714 Improvements 500,000 5,630,000 16,351,443 22,481,443 Specific Grants - Renewal of Play Parks 231,000 347,000 578,000 1,156,000 General Capital Grant - Flooding 20,525,000 20,525,000 General Capital Grant 15,179,000 10,007,000 10,007,000 10,007,000 10,007,000 10,007,000 10,007,000 10,007,000 85,228,000 Investment Fund Renewal & Recovery 1,235,180 1,235,180 Grants & Contributions 2,068,411 901,099 2,969,510 Sale of land & buildings 465,555 3,677,000 4,142,555 TOTAL INCOME 115,931,067 92,308,090 72,781,726 69,466,139 32,165,462 18,850,298 21,622,196 10,945,600 434,070,578
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Capital Investment Strategy 2023- 2031 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 2023 to 2031. 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 Appendix 4
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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 2022/23 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 the war in Ukraine 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. In addition to the Recovery and Renewal Strategy and Economic Recovery and Renewal Approach, 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 2019-2024 The mission for North Ayrshire Council is “Working together to improve well- being, prosperity and equity in North Ayrshire.” To deliver on this mission 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. With the current Council plan due to end in 2024, work is ongoing to create the new Council plan for beyond 2024. Our Priorities Aspiring Communities Active and strong communities Children and young pople experience the best start in life Inclusive, growing and enterprising local economy Residents and communities enjoy good life-long health and well-being Residents and communities are safe Inspiring Place Well connected with effective infrastructure Homes that meet residents' needs Vibrant, welcoming and attractive environment A sustainable environment A Council for the Future An accessible Council that puts residents and communities at the heart of what we do An efficient Council that maximises resources and provides value for money A valued workforce that delivers high quality services A powerful and respected voice Our Vision A North Ayrshire that is 'Fair For All' Our Mission Working together to improve well-being, prosperity and equality in North Ayrshire
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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: 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:
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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 590 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 2018-22 and Strategic Housing Investment Plan 2022- 27 The key strategic outcomes for the Local Housing Strategy 2018-2022 for North Ayrshire included ensuring the supply of housing meets the needs and aspirations of local people that they live in good quality homes which are located in strong, safe communities. The Draft Local Housing Strategy 2023-2028, currently being finalised following consultation and due to be approved in May 2023, maintains these same key outcomes. The Strategic Housing Investment Plan (SHIP) sets out the priorities for affordable housing investment in North Ayrshire over the next five years: •Planned investment of £127.4m to 2030/31 including improvements to the roads and street lighting network, 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 586 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 £17.3m to 2030/31. 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 £19.6m to 2030/31. 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 2023-2028 will see capital investment by the Council total £319.9m. 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 £6.1m investment to 2030/31 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 £2.8m is planned to 2030/31 for cemetery infrastructure. Open Spaces
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The SHIP will secure investment in a total of 1,652 properties across North Ayrshire and provide sustainable, affordable, accessible high-quality homes which will contribute to the wider regeneration aims for the area, taking the total investment for the period to £115.8m. Developments continue to be progressed across the five main housing market areas: • Arran • Garnock Valley • Irvine / Kilwinning • North Coast (Incorporating Cumbrae) • Three Towns In addressing projected demographic trends of an ageing population in North Ayrshire, the Local Housing Strategy sets a target of approximately 25% of new build homes being suitable for older people through amenity housing or sheltered housing with cognisance taken in the design stage for changing mobility needs. The SHIP supports the Health and Social Care Partnership to meet specialist housing need through dedicated supported accommodation projects. The Council also recognises that bringing former social housing stock back into social ownership can assist with housing management and maintenance issues and increase the housing available. As such, a second hand and empty homes buy-back programme has been incorporated into the SHIP. Making sustainable investment in housing is a key priority within the SHIP and this is achieved by incorporating energy efficiency measures and renewable technologies within the new build programme. The developments benefit from a range of sustainable measures including low carbon heat, solar photovoltaic panels and smart technologies. This investment aligns to the Council’s Environmental, Sustainability and Climate Change Strategy in supporting affordable warmth to households across North Ayrshire. The regeneration of North Ayrshire communities is a strategic priority within the Council Plan and the SHIP. The Scottish Index of Multiple Deprivation shows that 52 of North Ayrshire’s 186 data zones are in the 15% most deprived areas in Scotland. Through housing led regeneration and the provision of high-quality homes, desirable communities are created where people want to live and which in turn can also attract private sector investment. The demolition of the Fullarton tower blocks in Irvine will see the replacement of all 275 of these homes within the Irvine locality. Health and Educational Benefits Contribute to Regeneration of North Ayrshire Sustainable Investment Meet Local Demand and Aspirations Maximise ROI and achieve VFM Involve the local community
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Economic Development & Regeneration Strategy and Local Development Plan The Economic Development and Regeneration Strategy has been produced in partnership with the Economic Development and Regeneration Board (EDR Board), consisting of council representation and membership from the public, private sector and third sector. The Strategy sets out the ambitious mission for North Ayrshire to create the most improved economy in Scotland by the year 2025. Through Investment, Innovation and Internalisation the strategy aims to deliver Inclusive growth for North Ayrshire, focusing on six key strategic objectives: The Local Development Plan was adopted in November 2019 and aligns to the six strategic objectives as set out in the Economic Development and Regeneration Strategy, 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:
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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: Local Development Plan Spatial Strategy Placemaking Strategic Development Areas Delivering on Community Priorities 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 to 2030/31 includes planned investment of £72.4m to 2030/31. Finally, our Community Wealth Building Strategy introduced a new model 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 May 2018 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 North Shire - Ardrossan i3 - Irvine Montgomerie Park, Irvine Klbirnie Irvine Harbourside Brodick Harbourside Cumbrae- Millport Deliberately designed •Holistic view of the business and design 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 first •Utilise cloud based technologies wherever possible Data driven •Utilise data to effectively inform our decision making Secure •Operate securely when taking advantage of technology innovations
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Key technologies include Office 365, a cloud platform based approach to business application delivery and virtual desktop infrastructure (VDI). The ICT Asset Management Plan incorporates the technology principles and, in terms of investment, a total of £6m is planned to 2030/31 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. This neighbourhood approach focuses across three main areas of property provision and aims to: 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 2030/31. 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. •Provide fit-for-purpose and conveniently located service hubs that users can readily access.Service Hubs •Provide fit-for-purpose and conveniently located education and leisure facilities for service users. Maximising any investment across multiple strategic priority areas through a community facilities approach incorporating education, leisure and health and social care facilities, therefore delivering wider economic regeneration benefits. Education and Leisure •Provide modern, flexible office accommodation for staff that is economically and environmentally efficient.Office Accommodation
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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 2023/24 represents year 3 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 £434.1m from the Council’s General Fund is planned over the period from 2023/24 to 2030/31, supporting the 3 key strategic priorities from the Council Plan. This includes planned expenditure of £72.4m towards the Ayrshire Growth Deal to 2030/31. 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 2023/24 to 2030/31 Total Investment £434.1m
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The capital plan includes £122.1m 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 £127.4m within Roads, Structures and Lighting includes £31.0m road improvements, £47.8m on flood prevention works and £24.9m on the upgrading of the B714 following a successful application to the UK Governments Levelling Up Fund. Property lifecycle investment of £8.7m, 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 2023/24 to 2030/31 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 - £9.8m •Improvements to current kitchen and dining facilities across the school estate to create capacity for the anticipated uptake. Ardrossan Campus- £78.7m •New build project as part of an exciting wider community facility development Montgomerie Park school £22.4m •New primary provision linked to Montgomerie park regeneration project and housing developments Moorpark Primary School £4.9m •New primary provision
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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 £434.1m capital investment programme to 2030/31 include; The major sources of funding include assumptions on the level of general capital grant from Scottish Government to 2030/31 (£85.2m) and the level of prudential borrowing (£228.4m) 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.
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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 2023/24, 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 £745.352m by 2027/28 and then reduce annually to 2030/31. 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 4.5% for General Services and 34.8% for the HRA. From a General Fund perspective, the draft CIPFA Directors of Finance Performance Indicators 2021/22 show a Scottish Local Authority average 5.48%, therefore demonstrating a prudent borrowing policy. For the HRA , the indicative Scottish average in 2021/22 was 23.03%. 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. 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. 2022/23 2023/24 2024/25 2025/26 Probable Outturn Estimate Estimate Estimate % % % % General Services 2.9% 3.4% 4.6% 5.6% HRA 20.9% 27.8% 36.8% 39.9% Proportion of financing costs to net revenue stream
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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, Director of Growth and Investment, 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 £251m.
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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 Economic Development and Regeneration Strategy Treasury Management and Investment Strategy Loans Fund Policy HSCP Strategic Plan Environmental,Sustainability & Climate Change Strategy