Capital Programme 2022-23 Monitoring Report
North Lanarkshire Council · 30 November 2022
Back to Finance and Resources Committee — 30 November 2022 and its agenda
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North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☐ Yes ☒ No Ref EK/RMcN Date 30/11/22 Capital Programme 2022/23 Monitoring Report From Elaine Kemp, Head of Financial Solutions E-mail kempe@northlan.gov.uk Telephone 07939 280 601 Executive Summary The purpose of the report is to provide an update on the 2022/23 resources and expenditure for the Council's Strategic Capital Investment Programme. The report also shows the 2022/23 projected outturn position and the resultant variances. The capital programme continues to face challenges in relation to the wider economic climate linked to availability of materials, contractors and inflationary pressures. As a result, it is currently anticipated that the General Fund programme will underspend during 2022/23 by £3.325m, with expenditure reprofiled to future years of the programme. Similarly, within the HRA programme, the current market for house sales has limited the Council’s ability to purchase the targeted number of houses through buy back schemes; resulting in slippage of £5.687m. Recommendations It is recommended that the Committee: (1) Acknowledges the financial position of the Council’s Strategic Capital Investment Programme as at 16 September 2022. The Plan for North Lanarkshire Priority Improve North Lanarkshire's resource base Ambition statement (25) Ensure intelligent use of data and information to support fully evidence based decision making and future planning
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1. Background 1.1 The Strategic Capital Investment Programme 2021/22 to 2025/26 was originally approved at Policy and Strategy Committee in March 2021, with an updated programme profile for 2022/2023 to 2025/2026 approved in March 2022 and represents the total Community Investment Programme incorporating the General Services Capital Programme and HRA Capital Programmes. The programme was developed in conjunction with Services and led by the Strategic Capital Delivery Group (SCDG) using the principles established by the Council’s Capital Strategy. 1.2 The General Services Capital Programme supported by General Services resources demonstrates to communities that the place making visions for towns remains a priority, and that the Council considers the approved 5-year capital investment plan to be a major boost to assist the recovery of the local economy. It is also a clear statement that the Council is planning beyond the pandemic to deliver on the long-term needs and aspirations of communities. The programme includes additional investment in Town and Community Hubs, the City Deal programme, and external grant funding. 1.3 In addition, the Housing Revenue Account (HRA) resources support several HRA Capital Investment Programmes including Mainstream, Ambition, New Build and Council Buy Back scheme. 1.4 The 2022/2023 General Services Capital Programme is £177.585m with a £108.358m investment programme in relation to the Housing Revenue Account. The budget reflects the approved budget in March 2022 at Policy and Strategy Committee and subsequent decisions made at the Strategic Capital Delivery Group (SCDG) in accordance with the SCDG terms of reference and where appropriate either by the individual service committees, Finance and Resources Committee or the Policy and Strategy Committee per the Scheme of Administration. Appendix 1 provides a breakdown of the overall 2022/23 budget by Service Programme and associated approved budget movements. 1.5 Committee will be aware that the Community Investment Fund (CIF) Annual Update was presented to Policy and Strategy Committee on 29 September 2022. The report highlighted a reduction in projected CIF resources as a result of higher borrowing costs and lower than anticipated Council Tax growth. Consequently, there is a requirement to reduce the current 5-year capital investment programme by £22.076m. This has been considered by the Council’s SCDG and will be considered at Policy and Strategy Committee during Cycle 4. Once approved, SCDG will work with services to identify the profile of expenditure reductions across the remaining years of the capital programme which may have an impact on resources available during 2022/23. 2. Report 2.1 Overall Council Strategic Capital Investment Programme 2.1.1 The overall Council Strategic Capital Investment programme for 2022/23 and the projected outturn to the 31 March 2023 is summarised in Table 1 as follows:
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Table 1 2.1.2 On a budgeted programme of £285.943m expenditure is anticipated to be £9.012m under budget at this stage of the financial year. Further financial performance information regarding each of the programmes is discussed in section 2.2 and 2.3 below. 2.2 General Services Capital Programme and Projected Outturn by Service/ Programme 2.2.1 The financial performance of the overall General Services Investment programme at 31 March 2023 is detailed in Appendix 2 and summarised below. General Services Total Resources Community Capital Investment Programme Summary 2022/23 Current Programme £000s Projected Outturn £000s Outturn Variance £000s Enterprise & Communities 161,151 158,066 3,085 Chief Executives 13,930 13,930 0 Adult Health & Social Care 2,504 2,264 240 General Services: Total Capital Investment 177,585 174,260 3,325 General Services Resources: General Fund External Grants & Contributions 2021/22 57,182 57,182 0 External Grants & Contributions b/f 2020/21 7,124 7,124 0 External Grants & Contributions Unapplied 0 0 0 Net External Grants & Contributions 64,306 64,306 0 Capital Receipts 1,000 2,708 1,708 Capital Receipts -Transfer to Capital Fund 0 (1,708) (1,708) CFCR 5,422 5,422 0 General Services: Total Resources 70,728 70,728 0 General Services : Borrowing Requirement 106,857 103,532 (3,325) HRA : Total Capital Investment 108,358 102,671 5,687 HRA Resources: Net External Grants & Contributions 22,122 18,484 (3,638) Capital Receipts 0 3 3 CFCR 27,146 27,146 0 HRA : Total Resources 49,268 45,633 (3,635) HRA : Borrowing Requirement 59,090 57,038 (2,052) Summary Total Council : Capital Investment 285,943 276,931 9,012 Total Council : Resources 119,996 116,361 (3,635) Total Council : Borrowing Requirement 165,947 160,570 (5,377)
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2.2.2 The revised programme approved by the SCDG is £177.585m with total resources available to meet the current programme forecast to be £70.728m, resulting in a borrowing requirement of £106.857m. 2.2.3 In 2022/23 net external grants and contributions of £64.306m will be utilised. This capital resource primarily includes the Scottish Government (SG) General Capital Grants receivable of £23.681m and other specific SG Grants including City Deal £15.800m, the Place Based Investment Programme (PBIP) £2.358m, Vacant and Derelict Land Fund (VDLF) £2.058m, Regeneration Capital Grant Fund (RCGF) £3.221m, Active Travel £2.184m, Strathclyde Passenger Transport (SPT) £1.725m and Nature Restoration Fund £0.305m. In addition, capital grants received in 2021/22 have been added to the programme including £2.912m for VDLF, £1.315m for PBIP, £1.170m for RCGF, £0.324m for Play Parks, £0.321m for CO2 monitors and £0.272m for Early Years Expansion grant, these applied in the current year to match expenditure as it is incurred, and grant conditions met. Whilst at Period 6 it is anticipated that all capital grant funding will be utilised in 2022/23 this will be monitored closely as the year progresses. 2.2.4 Receipts from the sale of assets are projected to be £2.708m, which is £1.708m greater than the budget of £1.000m. In accordance with the approach agreed within the Strategic Capital Investment Programme 2021/22 to 2025/26, capital receipts above the budgeted level of £1.000m will be transferred to the Capital Fund and drawn down to support the Council’s Change Management Fund requirements. General Services Total Expenditure 2.2.5 As indicated in Table 1 the General Services investment programme is £177.585m. At Period 6, the final outturn spend is anticipated to be £3.325m under budget. This is primarily due to the investment programme continuing to face a number of risks and challenges associated with programme delivery including inflationary pressures as contractors continue to face issues with the supply of both labour, equipment and materials. The Council’s SCDG continues to monitor the situation closely. Further analysis by service/ programme is outlined below and summarised within Appendix 2. 2.2.6 Enterprise and Communities projects outturn expenditure of £161.151m, which is £3.085m under budget. This is attributable to continuing difficulties in programme phasing and delivery timing in the Street Lighting and Parks Masterplan projects resulting in underspends of £1.469m and £0.469m respectively. Timing delays have also resulted in an underspend of £0.845m in the Network Rail project, part of the upgrading of the West Coast Main Line. Reviews are currently being carried out by the Service to identify whether existing in-year projects can be accelerated. Should this prove unsuccessful, requests to reprofile budget into 2023/24 will be made to a future meeting of the SCDG. Committed expenditure of £102.974m is currently reported, which represents 65.15% of the targeted expenditure, and actual expenditure is £36.945m. 2.2.7 Chief Executives projects total expenditure of £13.930m, which is on budget. Committed expenditure of £5.435m is currently reported, which represents 39.02% of the targeted expenditure, and actual expenditure is £3.017m. 2.2.8 Adult Health & Social Care projected outturn expenditure is £0.240m under budget. This is attributable to demand levels not returning to pre-pandemic levels and the in- year variance will be reprofiled across the remainder of the 5-year capital investment programme. Committed expenditure of £0.815m is currently reported, which represents 36.00% of the targeted expenditure, and actual expenditure is £0.693m.
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2.3 HRA Capital Investment 2.3.1 The financial performance of the HRA Capital Programme is reported in detail to the Housing Committee. A summary of performance as at 16 September 2022 is provided at Appendix 3. Total expenditure of £108.358m is forecast for 2022/23 which is £5.687m under budget, attributable to lower than budgeted purchases through the Council’s Buy Back Schemes. Committed expenditure of £100.986m is currently reported, which represents 98.31% of the targeted expenditure, and actual expenditure is £38.470m. 2.4 Service Re-profiling Requests 2.4.1 As highlighted in paragraph 2.2.6, to ensure available resources more closely reflect operational activity across themes, requests within the Enterprise & Communities service to reprofile budget to future years of the programme may be required and these will be presented for approval at SCDG and will be incorporated in future reports. 3. Measures of success 3.1 N/A 4. Supporting documentation 4.1 Appendix 1: Strategic Capital Investment Programme 2022/23 budget movements Appendix 2: General Services Capital Investment Programme Summary 2022/23 Appendix 3: HRA Capital Investment Programme Summary 2022/23 Elaine Kemp Head of Financial Solutions
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality-and-fairer- scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☒ No ☐ If Yes, have all relevant financial impacts have been discussed and agreed with Financial Solutions? Yes ☒ No ☐ The financial impact is outlined within the report. 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts have been discussed and agreed with People and Organisational Development? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ If Yes, have all relevant legal impacts have been discussed and agreed with Legal and Democratic Solutions? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact?
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Where the impact identifies a requirement for technology, has an assessment been carried out (or scheduled) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ Despite the updated programme phasing approved at Policy and Strategy Committee on 17 March 2022 the capital programme continues to face ongoing delivery risks and challenges. These are currently being managed by services and Project Boards associated with specific programme delivery and will continue to be monitored throughout the year in accordance with the SCDG Terms of Reference.
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2022/23 Strategic Capital Investment Programme – budget movements Appendix 1 Enterprise & Communities Chief Executives Adult Health &Social Care Corporate Total General Services Investment Programme Total HRA Investment Programme Total Community Investment Programme £000s £000s £000s £000s £000s £000s £000s 22/23 Opening programme approved Policy& Strategy Committee 17 March '22 157,167 17,352 2,600 0 177,119 103,358 280,477 21/22 Overs/Unders Carry Forward 5,796 178 (96) 0 5,878 0 5,878 22/23 Budget adjustments approved by SCDG 0 0 0 0 0 0 0 22/23 Policy & Strategy Committee reprofiling 0 0 0 0 0 0 0 Increase/(Decrease) in Externally Funded Projects 7,772 324 0 0 8,096 5,000 13,096 CFCR 4,921 500 0 0 5,421 0 5,421 22/23 re-profiling of projects to future years (14,505) (4,424) 0 0 (18,929) 0 (18,929) Revised Capital Programme 2022/23 161,151 13,930 2,504 0 177,585 108,358 285,943
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General Services Capital Investment Programme Summary 2022/23 - as at 31 March 2023 Appendix 2 Investment Current Programme 2022/23 £000s Projected Outturn 2022/23 £000s Outturn Variance 2022/23 £000s Committed Expenditure @ P6 £000s Committed Expenditure % of Projected Outturn Actual Expenditure @ P6 £000s Enterprise & Communities 161,151 158,066 3,085 102,974 65.15% 36,945 Chief Executives 13,930 13,930 0 5,435 39.02% 3,017 Adult Health & Social Care 2,504 2,264 240 815 36.00% 693 Total General Services Investment 177,585 174,260 3,325 109,224 62.68% 40,655 General Services Resources; External Grants & Contributions 2022/23 57,182 57,182 0 External Grants & Contributions b/f 2021/22 7,124 7,124 0 External Grants & Contributions Unapplied cfwd to 2022/23 0 0 0 Net External Grants & Contributions 64,306 64,306 0 CFCR 5,422 5,422 0 Capital Receipts 1,000 2,708 1,708 Capital Receipts - Transfer to Capital Fund 0 (1,708) (1,708) Total Resources 70,728 70,728 0 Borrowing Requirement: General Services 106,857 103,532 (3,325) Total General Services Borrowing Requirement 106,857 103,532 (3,325) Total Resources incl Borrowing Requirement 177,585 174,260 (3,325)
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HRA Capital Investment Programme Summary 2022/23 - as at 31 March 2023 Appendix 3 Investment Current Programme 2022/23 £000s Projected Outturn 2022/23 £000s Outturn Variance 2022/23 £000s Committed Expenditure @ P6 £000s Committed Expenditure % of Projected Outturn Actual Expenditure @ P6 £000s Mainstream Programme 57,950 57,950 0 57,242 98.78% 23,772 New Build Programme 39,436 39,436 0 39,436 100.00% 14,214 Council Buy Back Scheme 10,972 5,285 5,687 4,308 82.24% 484 Total HRA Investment 108,358 102,671 5,687 100,986 98.31% 38,470 HRA Capital Resources; External Grants & Contributions 22,122 18,484 (3,638) External Grants & Contributions Unapplied 0 0 0 Net External Grants & Contributions 22,122 18,484 (3,638) CFCR 27,146 27,146 0 Capital Receipts 0 3 3 Total Resources 49,268 45,633 (3,635) Borrowing Requirement: HRA - Mainstream 30,474 30,196 (278) HRA - New Build 21,788 23,324 1,536 HRA - Buyback Scheme 6,828 3,518 (3,310) Total Borrowing Requirement 59,090 57,038 (2,052) Total Resources incl Borrowing Requirement 108,358 102,671 (5,687)