Capital Programme 2022-23 Monitoring Report
North Lanarkshire Council · 1 March 2023
Back to Finance and Resources Committee — 1 March 2023 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/GT/RMcN Date 01/03/23 Capital Programme 2022/23 Monitoring Report From Elaine Kemp, Chief Officer (Finance) E-mail kempe@northlan.gov.uk Telephone 01698 302408 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 £26.937m, with expenditure reprofiled to future years of the programme. Similarly, with 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 but this has been offset by increases in build costs for both the New Build and Mainstream programmes; resulting in slippage of £0.177m. Recommendations It is recommended that the Committee: (1) Acknowledges the financial position of the Council’s Strategic Capital Investment Programme as at 6 January 2023. 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 £175.985m with a £110.358m 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 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. The budget reductions were approved at Policy and Strategy Committee on 1 December 2022 and SCDG will now 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 £286.343m expenditure is anticipated to be £27.114m 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 159,192 136,139 23,053 Chief Executives 14,289 10,660 3,629 Adult Health & Social Care 2,504 2,249 255 General Services: Total Capital Investment 175,985 149,048 26,937 General Services Resources: General Fund External Grants & Contributions 2021/22 51,476 51,476 0 External Grants & Contributions b/f 2020/21 7,124 7,124 0 External Grants & Contributions Unapplied (992) (992) 0 Net External Grants & Contributions 57,608 57,608 0 Capital Receipts 1,000 3,534 2,534 Capital Receipts -Transfer to Capital Fund 0 (2,534) (2,534) CFCR 10,520 10,520 0 General Services: Total Resources 69,128 69,128 0 General Services : Borrowing Requirement 106,857 79,920 (26,937) HRA : Total Capital Investment 110,358 110,181 177 HRA Resources: Net External Grants & Contributions 24,122 23,600 (522) Capital Receipts 0 7 7 CFCR 27,146 27,146 0 HRA : Total Resources 51,268 50,753 (515) HRA : Borrowing Requirement 59,090 59,428 338 Summary Total Council : Capital Investment 286,343 259,229 27,114 Total Council : Resources 120,396 119,881 (515) Total Council : Borrowing Requirement 165,947 139,348 (26,599)
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2.2.2 The revised programme approved by the SCDG is £175.985m with total resources available to meet the current programme forecast to be £69.128m, resulting in a borrowing requirement of £106.857m. 2.2.3 In 2022/23 net external grants and contributions of £57.608m 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, Nature Restoration Fund £0.305m and Play Parks £0.319m. 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. This has been offset by £0.992m of external grant and contributions which will not be applied in 2022/23, including £0.733m for PBIP and £0.211m for VDLF, in respect of projects which will not now be completed until 2023/24. 2.2.4 Receipts from the sale of assets are projected to be £3.534m, which is £2.534m 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 future revenue budget strategy. General Services Total Expenditure 2.2.5 As indicated in Table 1 the General Services investment programme is £175.985m. At Period 10, the final outturn spend is anticipated to be £26.937m 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 £136.139m, which is £23.053m under budget. This is attributable to continuing difficulties in programme phasing and delivery timing in the Town and Community Hubs, Street Lighting, Bellshill Depot, A73 Carlisle & South Biggar Road and Fleming House projects resulting in in- year reprofiling requirements of £2.286m, £0.953m, £1.818m, £0.629m and £0.537m respectively. Delays in contract awards and project timings for Carbon Management and Bothwellpark projects have now resulted in reprofiling requirements of £1.610m and £2.009m respectively. The Loaning project has been delayed due to on-going public consultation resulting in spend of £0.240m being completed in 2023/24. There is programme slippage in re-wire and re-roofing projects of £0.863m and £0.317m respectively, 1140 Programme (£0.221m), Sustainable Estate (£0.276m( and future capital receipts (£0.211m) although these are being partially offset by acceleration of expenditure in other projects such as Health & Safety works (£0.580m) and Toilet Upgrades (£0.415m), and by the acceleration of other projects such as within Office Rationalisation (£0.455m), Time Capsule major maintenance (£0.300m) and Bellshill Cultural Centre cafe of (£0.197m) within Asset and Procurement Solutions.
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Outdoor Education and Outdoor Spaces is reporting an programme slippage of £3.165m relating to additional funding agreed for Pitch development where the spend is now forecast to fall into 2023/24. Ground issues identified at Pather Farm have also resulted in a requirement to reprofile £2.711m within the Cemeteries/Tree Infrastructure programme. A revised programme profile for works on the West Coast Main Line mean expenditure of £1.296m will now slip into 2023/24 within City Deal. There is further expenditure reprofiling required in relation to Ambition projects of £1.685m linked to the likely timing of property transactions and the Vehicle Replacement Programme (£1.399m) as the external market continues to experience issues with the availability of vehicles. Maximisation of external funding and underspends in staffing costs within the Infrastructure and Transportation Improvements has resulted in an underspend of £2.506m. Requests to reprofile budget into 2023/24 were successfully presented at the meeting of the SCDG on 2 February 2023 and will be incorporated in the next monitoring report at Period 11. Committed expenditure of £113.552m is currently reported, which represents 83.41% of the targeted expenditure, and actual expenditure is £72.410m. 2.2.7 Chief Executives projects total expenditure of £10.660m, which is £3.629m under budget. This is mainly attributable to challenges faced in obtaining bids for projects subject to tender and contractors being unable to deliver projects within previously agreed timelines. A request to re-profile budget into 2023/24 was successfully presented to the meeting of the SCDG on 2 February 2023 and will be incorporated in the next report at P11. Committed expenditure of £10.057m is currently reported, which represents 94.34% of the targeted expenditure, and actual expenditure is £5.054m. 2.2.8 Adult Health & Social Care projected outturn expenditure of £2.249m, which is £0.255m under budget. This is attributable to demand levels not returning to pre- pandemic levels and the in-year variance will be re-profiled across the remainder of the 5-year capital investment programme. Committed expenditure of £1.483m is currently reported, which represents 65.94% of the targeted expenditure, and actual expenditure is £1.314m. 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 6 January 2023 is provided at Appendix 3. Total expenditure of £110.181m is forecast for 2022/23 which is £0.177m under budget, attributable to lower than budgeted purchases through the Council’s Buy Back Schemes of £4.606m, offset by increased material and contractor costs of £1.488m for the Mainstream Programme and £2.941m for the New Build Programme. Committed expenditure of £106.190m is currently reported, which represents 96.33% of the targeted expenditure, and actual expenditure is £75.230m. 2.4 Service Re-profiling Requests 2.4.1 As mentioned in paragraph 2.2.6 and 2.2.7, to ensure available resources more closely reflect operational activity across themes, requests within the Enterprise and& Communities and Chief Executive services to re-profile budget to future years of the programme were successfully presented for approval at the meeting of the SCDG on 2 February 2023 and these decisions will be incorporated in future reports. 3. Measures of success 3.1 N/A
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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 Chief Officer (Finance)
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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 Finance? 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 Resources? 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? 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 significant technology change, 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. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ If Yes, please provide a brief summary of the provision which has been made to ensure there has been appropriate consideration of the particular needs of the Armed Forces community to make sure that they do not face disadvantage compared to other citizens in the provision of public services.
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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 714 683 0 0 1,397 7,000 8,397 CFCR 10,020 500 0 0 10,520 0 10,520 22/23 re-profiling of projects to future years (14,505) (4,424) 0 0 (18,929) 0 (18,929) Revised Capital Programme 2022/23 159,192 14,289 2,504 0 175,985 110,358 286,343
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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 @ P10 £000s Committed Expenditure % of Projected Outturn Actual Expenditure @ P10 £000s Enterprise & Communities 159,192 136,139 23,053 113,552 83.41% 72,410 Chief Executives 14,289 10,660 3,629 10,057 94.34% 5,054 Adult Health & Social Care 2,504 2,249 255 1,483 65.94% 1,314 Total General Services Investment 175,985 149,048 26,937 125,092 83.93% 78,778 General Services Resources; External Grants & Contributions 2022/23 51,476 51,476 0 External Grants & Contributions b/f 2021/22 7,124 7,124 0 External Grants & Contributions Unapplied cfwd to 2022/23 (992) (992) 0 Net External Grants & Contributions 57,608 57,608 0 CFCR 10,520 10,520 0 Capital Receipts 1,000 3,534 2,534 Capital Receipts - Transfer to Capital Fund 0 (2,534) (2,534) Total Resources 69,128 69,128 0 Borrowing Requirement: General Services 106,857 79,920 (26,937) Total General Services Borrowing Requirement 106,857 79,920 (26,937) Total Resources incl Borrowing Requirement 175,985 149,048 (26,937)
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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 @ P10 £000s Committed Expenditure % of Projected Outturn Actual Expenditure @ P10 £000s Mainstream Programme 59,950 61,438 (1,488) 61,074 99.41% 45,153 New Build Programme 39,436 42,377 (2,941) 42,377 100.00% 26,122 Council Buy Back Scheme 10,972 6,366 4,606 2,739 43.76% 3,955 Total HRA Investment 110,358 110,181 177 106,190 96.33% 75,230 HRA Capital Resources; External Grants & Contributions 24,122 23,600 (522) External Grants & Contributions Unapplied 0 0 0 Net External Grants & Contributions 24,122 23,600 (522) CFCR 27,146 27,146 0 Capital Receipts 0 7 7 Total Resources 51,268 50,753 (515) Borrowing Requirement: HRA - Mainstream 30,474 31,425 951 HRA - New Build 21,788 23,764 1,976 HRA - Buyback Scheme 6,828 4,239 (2,589) Total Borrowing Requirement 59,090 59,428 338 Total Resources incl Borrowing Requirement 110,358 110,181 (177)