Capital Programme 2023/24 Monitoring Report
North Lanarkshire Council · 13 September 2023
Back to Finance and Resources Committee — 13 September 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 13/09/23 Capital Programme 2023/24 Monitoring Report From Elaine Kemp, Chief Officer (Finance) E-mail kempe@northlan.gov.uk Telephone 07939 280 601 Executive Summary The purpose of the report is to provide an update on the 2023/24 resources and expenditure for the Council's Strategic Capital Investment Programme. The report also shows the 2023/24 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. It is currently anticipated that the General Fund programme will have a projected programme variance during 2023/24 of £55.049m, which primarily relates to Town and Community Hubs as the expenditure profile has been reviewed across the multi-year programme for live projects, and also projects in development. Recommendations It is recommended that the Finance and Resources Committee: (1) Acknowledges the financial position of the Council’s Strategic Capital Investment Programme as at 21 July 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 2023/2024 to 2025/2026 approved in March 2023 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 2023/2024 General Services Capital Programme is £228.083m with a £125.392m investment programme in relation to the Housing Revenue Account. The budget reflects the approved budget in March 2023 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 2023/24 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 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 2023/24. The 2023/24 strategic investment capital programme and indicative budgets for the remainder of the current five-year planning period was 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 2023/24 and the projected outturn to the 31 March 2024 is summarised in Table 1 as follows:
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Table 1 2.1.2 On a budgeted programme of £353.475m expenditure is anticipated to be £54.801m lower than current programme 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 2024 is detailed in Appendix 2 and summarised below. Community Capital Investment Programme Summary 2023/24 Current Programme £000s Projected Outturn £000s Outturn Variance £000s Enterprise & Communities 210,187 155,138 55,049 Chief Executives 15,708 15,708 0 Adult Health & Social Care 2,188 2,188 0 General Services: Total Capital Investment 228,083 173,034 55,049 General Services Resources: General Fund External Grants & Contributions 2023/24 47,707 47,707 0 External Grants & Contributions b/f 2022/23 16,466 16,466 0 External Grants & Contributions Unapplied 0 0 0 Net External Grants & Contributions 64,173 64,173 0 Capital Receipts 1,000 4,279 3,279 Capital Receipts -Transfer to Capital Fund 0 (3,279) (3,279) CFCR 1,588 1,588 0 General Services: Total Resources 66,761 66,761 0 General Services : Borrowing Requirement 161,322 106,273 (55,049) HRA : Total Capital Investment 125,392 125,640 (248) HRA Resources: Net External Grants & Contributions 19,385 27,153 7,768 Capital Receipts 0 1 1 CFCR 27,146 19,427 (7,719) HRA : Total Resources 46,531 46,581 50 HRA : Borrowing Requirement 78,861 79,059 198 Summary Total Council : Capital Investment 353,475 298,674 54,801 Total Council : Resources 113,292 113,342 50 Total Council : Borrowing Requirement 240,183 185,332 (54,851)
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General Services Total Resources 2.2.2 The revised programme approved by the SCDG is £228.083m with total resources available to meet the current programme forecast to be £66.761m, resulting in a borrowing requirement of £161.322m. 2.2.3 In 2023/24 net external grants and contributions of £64.173m will be utilised. This capital resource primarily includes the Scottish Government (SG) General Capital Grants receivable of £24.152m and other specific SG Grants including City Deal (£3.000m), Vacant and Derelict Land Fund (VDLF, £1.841m), the Place Based Investment Programme (PBIP, £1.698m), and Cycling, Walking and Safer Streets (CWSS, £2.180m) and also NHS developer contributions of £4.933m. In addition, capital grants received in 2022/23 have been added to the programme to match expenditure in 2023/24 including £8.730m for Levelling Up Fund (LUF), £3.291m for VDLF, £2.283m for PBIP, £1.235m for Regeneration Capital Grant Fund, £0.289m for Shared Prosperity Fund, £0.272m for CO2 Monitors and £0.230m for Vacant and Derelict Land Investment Programme. Whilst at Period 4 it is anticipated that all capital grant funding will be utilised in 2023/24, this will be monitored closely as the year progresses. 2.2.4 Receipts from the sale of assets are currently projected to be £4.279m, which is £3.279m 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 £228.083m. At Period 4, the final outturn spend is anticipated to be £55.049m lower than current programme. This is primarily due to the outcome of updated programming projections for Town and Community Hubs. 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 are projecting outturn expenditure of £155.138m, which is a £55.049m variance from current programme. This is primarily attributable to the outcome of an exercise undertaken to reassess the expenditure profile of the Town and Community Hubs theme for projects at Stages 1 and 2 of completion. This has resulted in reprofiled expenditure of £60.383m with an offset £2.796m of accelerated expenditure on current live projects. City Deal project cashflows and anticipated grant payments from Scottish Government and UK Government have also been reviewed. This has resulted in a need to reassess the Council’s immediate borrowing requirements which represents the need for acceleration of £11.528m of Council Funding within the current financial year. Within Economic Regeneration LUF funding has been utilised for the purchase of Cumbernauld Town Centre and therefore results in Council funding of £8.513m being required to be carried forward to future years for the next phases of the Cumbernauld Town vision. Within Enterprise projects additional active travel grant funding has been received which results in Council funding of £0.297m being required to carry forward to future years. In addition, across the service there are a number of compensating variances arising from the multi-year programme of activity across Assets and Procurement with in-year
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overspends within Maintaining Existing Assets (£0.504m), Leisure Development (£0.444m) and Demolitions (£0.373m). These are offset by in-year underspends in Office Rationalisation (£0.842m), Carbon Management (£0.479m) and Rationalisation including ASN (£0.105m). To ensure available resources more closely reflect operational activity across themes, requests to reprofile budget to future years of the programme will be presented for approval at future meetings of the SCDG and Housing Committee and will be incorporated in future reports. Committed expenditure of £85.490m is currently reported, which represents 55.11% of the targeted expenditure, and actual expenditure is £35.516m. 2.2.7 Chief Executives are projecting total expenditure of £15.708m, which is on target with current programme. Committed expenditure of £5.081m is currently reported, which represents 32.35% of the targeted expenditure, and actual expenditure is £2.657m. 2.2.8 Adult Health & Social Care are projecting outturn expenditure of £2.188m, which is on target with current programme. Committed expenditure of £0.391m is currently reported, which represents 17.87% of the targeted expenditure, and actual expenditure is £0.332m. 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 21 July 2023 is provided at Appendix 3. Total expenditure of £125.640m is forecast for 2023/24 which is an increase on programmed expenditure of £0.248m. Committed expenditure of £122.585m is currently reported, which represents 97.52% of the targeted expenditure, and actual expenditure is £34.768m. 2.4 Service Re-profiling Requests 2.4.1 As mentioned in paragraph 2.2.6, to ensure available resources more closely reflect operational activity across themes, requests within the Enterprise and Communities service to reprofile budget to future years of the programme will be required and these will be presented for approval at future meetings of the SCDG and Housing Committee 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 2023/24 budget movements Appendix 2: General Services Capital Investment Programme Summary 2023/24 Appendix 3: HRA Capital Investment Programme Summary 2023/24 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 16 March 2023 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. 5.11 Children’s rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact and the provision that has been made to ensure there has been appropriate consideration of the relevant Articles from the United Nations Convention on the Rights of the Child (UNCRC). If Yes, has a Children’s Rights and Wellbeing Impact Assessment (CRWIA) been carried out? Yes ☐ No ☐
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2023/24 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 23/24 Opening programme approved Policy& Strategy Committee 16 March '23 190,795 14,346 2,200 0 207,341 130,990 338,331 22/23 Overs/Unders Carry Forward 20,366 616 (12) 0 20,970 (5,598) 15,372 23/24 Budget adjustments approved by SCDG 5,416 746 0 0 6,162 0 6,162 Increase/(Decrease) in Externally Funded Projects (4,599) 0 0 0 (4,599) 0 (4,599) Increase/(Decrease) in Council Funded Projects (3,379) 0 0 0 (3,379) 0 (3,379) CFCR 1,588 0 0 0 1,588 0 1,588 Revised Capital Programme 2023/24 210,187 15,708 2,188 0 228,083 125,392 353,475
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General Services Capital Investment Programme Summary 2023/24 - as at 31 March 2024 Appendix 2 Investment Current Programme 2023/24 £000s Projected Outturn 2023/24 £000s Outturn Variance 2023/24 £000s Committed Expenditure @ P4 £000s Committed Expenditure % of Projected Outturn Actual Expenditure @ P4 £000s Enterprise & Communities 210,187 155,138 55,049 85,490 55.11% 35,516 Chief Executives 15,708 15,708 0 5,081 32.35% 2,657 Adult Health & Social Care 2,188 2,188 0 391 17.87% 332 Total General Services Investment 228,083 173,034 55,049 90,962 52.57% 38,505 General Services Resources; External Grants & Contributions 2023/24 47,707 47,707 0 External Grants & Contributions b/f 2022/23 16,466 16,466 0 External Grants & Contributions Unapplied cfwd to 2024/25 0 0 0 Net External Grants & Contributions 64,173 64,173 0 CFCR 1,588 1,588 0 Capital Receipts 1,000 4,279 3,279 Capital Receipts - Transfer to Capital Fund 0 (3,279) (3,279) Total Resources 66,761 66,761 0 Borrowing Requirement: General Services 161,322 106,273 (55,049) Total General Services Borrowing Requirement 161,322 106,273 (55,049) Total Resources incl Borrowing Requirement 228,083 173,034 (55,049)
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HRA Capital Investment Programme Summary 2023/24 - as at 31 March 2024 Appendix 3 Investment Current Programme 2023/24 £000s Projected Outturn 2023/24 £000s Outturn Variance 2023/24 £000s Committed Expenditure @ P4 £000s Committed Expenditure % of Projected Outturn Actual Expenditure @ P4 £000s Mainstream Programme 55,347 55,537 (190) 53,296 95.96% 14,277 New Build Programme 59,995 59,995 0 59,995 100.00% 17,761 Council Buy Back Scheme 10,050 10,108 (58) 9,294 92.68% 2,730 Total HRA Investment 125,392 125,640 (248) 122,585 97.52% 34,768 HRA Capital Resources; External Grants & Contributions 19,385 27,153 7,768 External Grants & Contributions Unapplied 0 0 0 Net External Grants & Contributions 19,385 27,153 7,768 CFCR 27,146 19,427 (7,719) Capital Receipts 0 1 1 Total Resources 46,531 46,581 50 Borrowing Requirement: HRA - Mainstream 32,871 32,987 116 HRA - New Build 40,236 40,318 82 HRA - Buyback Scheme 5,754 5,754 0 Total Borrowing Requirement 78,861 79,059 198 Total Resources incl Borrowing Requirement 125,392 125,640 248