Capital Programme 2022-23 Monitoring Report
North Lanarkshire Council · 24 May 2023
Back to Finance and Resources Committee — 24 May 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 24/05/23 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. The Strategic Capital Delivery Group (SCDG) met to agree reprofiling requests in February 2023. However, challenges remain and as a result, it is currently anticipated that the General Fund programme will underspend during 2022/23 by £15.733m. The largest element relates to the timing of the acquisition of The Centre Cumbernauld which will be concluded in 2023/24. Requests will be made to the SCDG for permission to carry forward the unused expenditure to the 2023/24 year 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 together with the purchase of land and “off the shelf” developments earlier than anticipated; resulting in an overspend of £5.081m. Recommendations It is recommended that the Committee: (1) Acknowledges the financial position of the Council’s Strategic Capital Investment Programme as at 3 March 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 £146.724m 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 resources as a result of higher borrowing costs and lower than anticipated Council Tax growth. Consequently, there was 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. On 7 February 2023, the SCDG considered the profile of these budget reductions, including any impact on 2022/23 and these were reflected in the revised Strategic Capital Investment Programme approved at Policy and Strategy Committee on 16 March 2023. 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 £257.082m expenditure is anticipated to be £10.652m 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. Community Capital Investment Programme Summary 2022/23 Current Programme £000s Projected Outturn £000s Outturn Variance £000s Enterprise & Communities 133,810 118,876 14,934 Chief Executives 10,660 9,914 746 Adult Health & Social Care 2,254 2,201 53 General Services: Total Capital Investment 146,724 130,991 15,733 General Services Resources: General Fund External Grants & Contributions 2021/22 58,748 58,748 0 External Grants & Contributions b/f 2020/21 7,124 7,124 0 External Grants & Contributions Unapplied (11,253) (11,253) 0 Net External Grants & Contributions 54,619 54,619 0 Capital Receipts 1,000 2,468 1,468 Capital Receipts -Transfer to Capital Fund 0 (1,468) (1,468) CFCR 10,520 10,520 0 General Services: Total Resources 66,139 66,139 0 General Services : Borrowing Requirement 80,585 64,852 (15,733) HRA : Total Capital Investment 110,358 115,439 (5,081) HRA Resources: Net External Grants & Contributions 24,122 26,444 2,322 Capital Receipts 0 8 8 CFCR 27,146 27,146 0 HRA : Total Resources 51,268 53,598 2,330 HRA : Borrowing Requirement 59,090 61,841 2,751 Summary Total Council : Capital Investment 257,082 246,430 10,652 Total Council : Resources 117,407 119,737 2,330 Total Council : Borrowing Requirement 139,675 126,693 (12,982)
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General Services Total Resources 2.2.2 The revised programme approved by the SCDG is £146.724m with total resources available to meet the current programme forecast to be £66.139m, resulting in a borrowing requirement of £80.585m. 2.2.3 In 2022/23 net external grants and contributions of £54.619m 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, £1.905m Free School Meals, 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 £11.253m of external grant and contributions which will not be applied in 2022/23, including £3.443m for VDLF, £3.036m for RCGF £2.001m for PBIP, £1.905m for Free School Meals, £0.319m for Play Parks, £0.270m for Nature Restoration Fund and £0.230m for VDLIP, 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 £2.468m, which is £1.468m 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 £146.724m. At Period 12, the final outturn spend is anticipated to be £15.733m under budget. This is primarily due the acquisition of The Centre Cumbernauld being concluded in 2023/24. In addition, the investment programme continues to face uncertainty with contractor cashflows meaning that even at this late stage of the financial year there will be programme expenditure completed in 2023/24. 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 £118.876m, which is £14.934m under budget. This is primarily attributable to attributable to finalisation of asset and property management arrangements resulting from the purchase of The Centre Cumbernauld not concluding until the 2023/24 financial year (£9.745m). In addition, across the service there continue to be uncertainties in programme phasing and delivery linked to contractor cashflow estimates including with the Town and Community Hub projects (£1.601m), Street Lighting replacement (£1.766m) and footpath works Cambusnethan Cemetery (£0.888m). These are partially offset by accelerated expenditure on the Bellshill Depot programme (£0.713m). Elsewhere there is also programme slippage linked to weather delays in re-roofing projects (£0.410m) and due to contractor delays for the provision of temporary modular accommodation at Taylor High School (£0.406m). There are a number of additional more minor variances reported as standard through the service monitoring report. A request will be made to the next meeting of the SCDG for permission to carry forward the net underspend of £14.934m to the 2023/24 financial year. Committed expenditure of £115.668m is currently reported, which represents 97.30% of the targeted expenditure, and actual expenditure is £92.653m.
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2.2.7 Chief Executive’s projects total expenditure of £9.914m, which is £0.746m 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. Committed expenditure of £9.912m is currently reported, which represents 99.98% of the targeted expenditure, and actual expenditure is £7.905m. 2.2.8 Adult Health & Social Care project outturn expenditure of £2.201m, which is £0.053m under budget. This is attributable to heightened uncertainties in respect of demand and complexity of need as a result of the pandemic. The in-year variance will be re-profiled across the remainder of the 5-year capital investment programme. Committed expenditure of £1.947m is currently reported, which represents 88.46% of the targeted expenditure, and actual expenditure is £1.706m. 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 3 March 2023 is provided at Appendix 3. Total expenditure of £115.439m is forecast for 2022/23 which is £5.081m over budget, attributable to increased material and contractor costs of £2.881m for the Mainstream Programme and £5.604m for the New Build Programme, due to opportunities presented to buy land and “off the shelf” developments earlier than anticipated, partially offset by lower than budgeted purchases through the Council’s Buy Back Schemes of £3.404m. Committed expenditure of £110.609m is currently reported, which represents 95.77% of the targeted expenditure, and actual expenditure is £85.848m. 2.4 Service Re-profiling Requests 2.4.1 As indicated in paragraph 2.2.6, to ensure available resources more closely reflect operational activity across themes, final outturn positions for service areas will be assessed and requests to re-profile budget to future years of the programme may be required and these will be presented for approval at future meetings of the 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 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 (699) (1,206) (250) 0 (2,155) 0 (2,155) 22/23 Policy & Strategy Committee reprofiling (23) 0 0 0 (23) 0 (23) Increase/(Decrease) in Externally Funded Projects (1,602) 364 0 0 (1,238) 7,000 5,762 CFCR 10,020 500 0 0 10,520 0 10,520 22/23 Acceleration of projects from future years approved by SCDG 827 0 0 0 827 0 827 22/23 Re-profiling of projects to future years approved by SCDG (37,676) (6,528) 0 0 (44,204) 0 (44,204) Revised Capital Programme 2022/23 133,810 10,660 2,254 0 146,724 110,358 257,082
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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 @ P12 £000s Committed Expenditure % of Projected Outturn Actual Expenditure @ P12 £000s Enterprise & Communities 133,810 118,876 14,934 115,668 97.30% 92,653 Chief Executives 10,660 9,914 746 9,912 99.98% 7,905 Adult Health & Social Care 2,254 2,201 53 1,947 88.46% 1,706 Total General Services Investment 146,724 130,991 15,733 127,527 97.36% 102,264 General Services Resources; External Grants & Contributions 2022/23 58,748 58,748 0 External Grants & Contributions b/f 2021/22 7,124 7,124 0 External Grants & Contributions Unapplied cfwd to 2022/23 (11,253) (11,253) 0 Net External Grants & Contributions 54,619 54,619 0 CFCR 10,520 10,520 0 Capital Receipts 1,000 2,468 1,468 Capital Receipts - Transfer to Capital Fund 0 (1,468) (1,468) Total Resources 66,139 66,139 0 Borrowing Requirement: General Services 80,585 64,852 (15,733) Total General Services Borrowing Requirement 80,585 64,852 (15,733) Total Resources incl Borrowing Requirement 146,724 130,991 (15,733)
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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 @ P12 £000s Committed Expenditure % of Projected Outturn Actual Expenditure @ P12 £000s Mainstream Programme 59,950 62,831 (2,881) 62,830 100.00% 48,116 New Build Programme 39,436 45,040 (5,604) 45,040 100.00% 31,917 Council Buy Back Scheme 10,972 7,568 3,404 2,739 36.92% 5,815 Total HRA Investment 110,358 115,439 (5,081) 110,609 95.77% 85,848 HRA Capital Resources; External Grants & Contributions 24,122 26,444 2,322 External Grants & Contributions Unapplied 0 0 0 Net External Grants & Contributions 24,122 26,444 2,322 CFCR 27,146 27,146 0 Capital Receipts 0 8 8 Total Resources 51,268 53,598 2,330 Borrowing Requirement: HRA - Mainstream 30,474 31,865 1,391 HRA - New Build 21,788 25,354 3,566 HRA - Buyback Scheme 6,828 4,622 (2,206) Total Borrowing Requirement 59,090 61,841 2,751 Total Resources incl Borrowing Requirement 110,358 115,439 5,081