Enterprise and Communities - Capital Monitoring
North Lanarkshire Council · 15 February 2023
Back to Housing Committee — 15 February 2023 and its agenda
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North Lanarkshire Council Report Housing Committee Does this report require to be approved? ☒ Yes ☐ No Ref GT/JM Date 15/02/23 Enterprise and Communities – Capital Monitoring Report From Derek Brown, Depute Chief Executive E-mail telferg@northlan.gov.uk Telephone Greg Telfer, Business Finance Manager, 07583 010692 1. Background 1.1 Financial year 2022/23 is the second year of the 5 year capital programme which was initally approved by the Policy and Strategy Committee on 18 March 2021. Executive Summary This report highlights the financial performance of 2022/23 Enterprise and Communities capital programme for the period ended 6 January 2023 (Period 10). In summary the Service has a total capital budget of £159.192m. At this stage in the financial year the service is currently reporting a requirement to reprofile £23.053m to future years of the current capital planning period. The Council’s Strategic Capital Delivery Group (SCDG) has approved these reprofiling requests under delegated powers and the impact will be reflected in future reports. (see Appendix B). The requirement to reprofile is largely attributable to current market conditions on capital procurement processes resulting in later than anticipated start dates for projects and continuing issues contracts are experiencing with the availability of labour and materials. Further explanation of project variances and management action taken by the Service is included within the main report and attached appendices. Recommendations It is recommended that the Committee: (1) Acknowledges the financial position of the 2022/23 Enterprise and Communities capital programme. The Plan for North Lanarkshire Priority Improve economic opportunities and outcomes Ambition statement (25) Ensure intelligent use of data and information to support fully evidence based decision making and future planning
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1.2 The Enterprise and Communities 2022/23 capital programme of £157.168m was approved by the Policy and Strategy Committee on 17 March 2022. The programme has since been increased by £5.796m relating to carry forwards from 2021/22 and reduced due to £14.505m reprofiling to 2023/24 approved at the Council’s SCDG on 15 September 2022. In addition, a further £10.734m has been received in external funding giving an overall working capital programme of £159.192m. 1.3 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 programme amendments were approved at Policy and Strategy Committee on 1 December 2022. 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. 1.4 The Council’s approved Financial Regulations required services to remain within their approved budgetary provision, and to report all significant deviations – defined as the higher of £0.100m or 5% - within their budget monitoring reports. Where significant deviations were identified, services must provide explanatory commentary, outline the action required to rectify such deviations and where relevant, must also highlight the impact this has on other budget headings. 2. Report 2.1 At Period 10 the service is reporting a requirement to reprofile £23.053m of expenditure to future years of the current capital planning period. This reprofiling request has been approved at the Council’s SCDG on 2 February 2023 and will be refected in future monitoring reports (see Appendix B). Capital budgets and expenditure are summarised into Project/Themes (see Appendix A) 2.2 Assets and Procurement Solutions (£9.658m Underspend) The division has a number of in year variances across programmed activity. The most significant variance relates to the profile of expenditure in the Community Hub projects at Chryston and Carnbroe where updated contractor work programmes indicate £2.286m of expenditure will now be incurred in the new financial year. In addition, an in year underspend of £1.610m is expected within Carbon Management projects as the service has sought to finalise the programme of work and select a preferred bidder. Expenditure will now be incurred during 2023/24. The ASN / Social Work Rationalisation is forecast to underspend by £2.009m this financial year which is mainly for the Bothwellpark project. The planning application for this project has been submitted and progress has been made to formalise the design, however, it is now anticipated this project will complete late 2023. In addition, to allow more accurate scoping works at the Children’s Houses, the cost profile of these works have also been reprofiled to 2023/24. Within Demolitions there is a forecast underspend of £0.537m due to revised timing of the demolition of the Fleming House following ongoing negotiations regarding relocating the rooftop antennas. There are also further in year underspends of £0.221m forecast with the 1140 Programme and £0.276m within Sustainable Estate due to the profiling of costs. In addition, an underspend of £0.211m is expected within future
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capital receipts, work contractors have now been appointed for Mid-Forrest Community Growth Area and Napier Residential Site so these funds will be spent next financial year. These are offset in part as projects have been accelerated within Office Rationalisation (£0.455m) These underspends are also partially offset by a combination of compensating variances within the Maintaining Existing Assets Category. Programme acceleration in Health & Safety Works (£0.580m) due to increased costs via tender award and acceleration of required power generator works. Toilet Upgrades are forecast to overspend (£0.415m) as tender returns have come in higher than anticipated. In addition, projects have been accelerated within major maintenance on the Time Capsule Moveable Flooring (£0.300m), and café works at Bellshill Cultural Centre (£0.197m) to assist in managing the overall variance. Re-wire works (£0.863m) and re- roofing projects (£0.317m) are expected to underspend as jobs are now spanning the financial years. The Outdoor Education and Outdoor Spaces theme is reporting an in-year underspend of £3.165m relating to the receipt of additional one-off investment allocations where the spend in now forecast to fall into 2023/24. In addition, a request has been made to approve a budget virement from the Demolitions theme (£0.500m) to support additional costs associated with the pitch programme (See Appendix B). 2.3 Environmental Assets (£7.196m underspend) Infrastructure and Transportation Improvements theme is forecasting an underspend of £2.506m. This is mainly as a result of maximising external funding in Traffic Signals and Pedestrian Crossings (£1.754m), Active Travel Infrastructure (£0.171m), Public Transport Infrastructure (£0.462m) and Drainage and Flood Risk Management (£0.117m). These underspends will be used to offset partly the overspend within the Horsely Brae project of £0.357m. The team are actively completing the tender process and works within this theme will now be completed in 2023/24. There is also an underspend in staffing costs (£0.360m) within this area due to recruitment issues which means there are a number of vacancies within the design team. Cemeteries/Tree Infrastructure is projecting an underspend of £2.711m which is directly linked to the Cemetery Development works at Pather Fam where ground issues have meant a delay in the tendering process. The tender is now expected to be awarded February 2023 and works commencing early in the new financial year. There is also an underspend of £1.973m anticipated in the Roads Asset Management theme this financial year. Within Street Lighting and in-year underspend of £0.953m is attributable to contractor cashflows following tender award. The works will now span into 2023/24. There has also been a delay in the works commencing at the A73 Carlisle / South Biggar Road project which has meant, although the contract has been awarded this financial year, £0.629m of works is expected to slip to 2023/24. In addition to this £0.150m has been identified as a capital saving on this project due to tender prices being lower than anticipated. Works at The Loaning in Motherwell are also expected to be completed next financial year as the service incorporates feedback from ongoing public consultation (£0.240m). Greenspace is currently reporting an underspend of £0.134m. £0.112m has been identified as a capital saving and the remaining £0.022m is being held to offset a staffing pressure within Parks Masterplans due to the temporary recruitment of an additional post this year.
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£0.106m is overspent within Replacement of Plant and Machinery and a request is included within appendix B for these funds to be accelerated from 2023/24. 2.4 Planning and Regeneration (£2.981m underspend) The service anticipates as in year underspend in the City Deal programme of £1.296m mainly as a result of delivery timescales for the completion of required work for the West Coast Main Line in partnership with Network Rail. This expenditure forecast now falls into the first quarter of 2023/24. In addition, there are a number of in year underspends in Ambition programmes totalling £1.685m. Similar to other areas of the service, in order to maximise external funding some of the Council funded elements of these projects will now occur later than anticipated in the financial year and will now straddle into the 2023/24. 2.5 Regulatory Services and Waste Solutions (£3.218m underspend) The majority of the underspend relates to the Bellshill Depot (£1.818m) as a result of delays in commencing construction with planned spend continuing into 2023/24. The remaining underspend relates to the Vehicle Replacement Programme in Fleet (£1.399m) and comes as a result of ongoing review of fleet requirements across the Council and the timescales to get delivery of new vehicles. A request has been made to vire these funds into the Bellshill Depot project (See Appendix B). 3. Measures of success 3.1 The Service aim is to be in a balanced budget position at financial year-end 4. Supporting documentation 4.1 Appendix 1 Summary Expenditure by Project/Theme 4.2 Appendix 2 Budget Virement Requests Derek Brown Depute Chief Executive
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5. Impacts ( http://connect/report-template-guidance ) 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 ☐ If Yes, please provide a brief summary of the impact? The Service aims to operate within approved funding levels and utilise budget virements to support emerging issues and mitigate variances across budget heads. 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 ☐
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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? Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) 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 ☒ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? All activities undertaken by the Council are subject to risk, and in acknowledging the Council’s approved Risk Management Strategy, Services managed these as part of their overall corporate and service planning processes. The current economic climate, in particular, has the potential to impact upon the Council’s ability to provide quality services within approved budget levels. To minimise risk this report was prepared by service based Financial Solutions personnel in consultation with budget managers, in accordance with the Financial Regulations. 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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Appendix 1 Enterprise & Communities Capital Programme 2022/23 1.754 Theme Expenditure Summary 1st April 2022 - 6th January 2023 (PERIOD 10) Thematic Category Revised Budget £ Actual £ Committed £ Uncommitted £ Projected Outturn £ Outturn variance £ ASSET & PROCUREMENT SOLUTIONS Maintaining Existing Assets - windows, re-roofing, re-wiring and condition survey works for the Council's building assets 8,857,868 3,977,165 8,491,779 533,174 9,024,953 (167,085) Carbon Management 2,126,769 334,779 334,779 181,783 516,562 1,610,207 Office Rationalisation (16,849) 63,151 408,151 29,660 437,811 (454,660) Shared Campus 0 0 0 0 0 0 Leisure Development 1,311,349 1,558,329 1,397,260 13,300 1,410,560 (99,211) Health & Wellbeing & Digital Classrooms 411,693 201,509 424,282 38,490 462,772 (51,079) Rationalisation including ASN & Social Work 3,599,432 974,229 1,560,316 30,000 1,590,316 2,009,116 Curriculum Development 863,951 512,572 806,408 0 806,408 57,543 Sustainable Estate 1,474,242 505,720 809,021 389,555 1,198,576 275,666 Outdoor Education and Outdoor Spaces 3,928,176 377,289 762,289 0 762,289 3,165,887 Future Capital Receipts Investments 985,791 153,715 774,434 0 774,434 211,357 Design Fees 1,525,383 582,415 1,469,176 0 1,469,176 56,207 1140 Early Learning and Childcare Expansion 2,191,802 1,208,798 1,298,546 672,189 1,970,735 221,067 Demolitions 1,010,383 83,002 170,640 302,691 473,331 537,052 TOTAL ASSET & PROCUREMENT SOLUTIONS 28,269,990 10,532,673 18,707,083 2,190,841 20,897,924 7,372,067 TOWN AND COMMUNITY HUBS Town and Community Hubs 49,860,100 32,766,273 46,741,429 832,324 47,573,753 2,286,347 TOTAL TOWN AND COMMUNITY HUBS 49,860,100 32,766,273 46,741,429 832,324 47,573,753 2,286,347 ENVIRONMENTAL ASSETS Infrastructure and Transportation Improvements 10,577,727 4,416,950 7,686,662 385,039 8,071,701 2,506,026 Greenspace infrastructure Health & Wellbeing 1,388,179 210,047 385,337 868,677 1,254,014 134,166 Parks Masterplans 2,911,807 1,270,652 1,505,565 1,428,786 2,934,351 (22,545) Environmental Assets replacement of plant and machinery 666,997 507,901 719,981 52,620 772,601 (105,604) Cemeteries/Tree Infrastructure 4,319,311 136,770 450,005 1,158,026 1,608,030 2,711,281 Road Asset Management including street lighting, road improvements and gateway signage 14,590,454 6,267,830 10,901,604 1,716,322 12,617,926 1,972,528 Bin rationalisation project and replacement 137,742 36,374 137,742 0 137,742 0 Play Area Equipment and surface renewal 213,145 112,247 213,145 0 213,145 0 TOTAL ENVIRONMENTAL ASSETS 34,805,362 12,958,771 22,000,042 5,609,467 27,609,510 7,195,852 REGULATORY SERVICES & WASTE SOLUTIONS Contaminated Land and Pollution Control 368,376 349,212 349,212 19,164 368,376 0 Vehicle Replacement Programme 1,448,444 49,040 49,040 0 49,040 1,399,404 Depot Rationalisation and Investment 3,509,776 731,095 1,691,465 0 1,691,465 1,818,311 HWRC Equipment 464,700 186,387 186,387 278,313 464,700 0 TOTAL REGULATORY SERVICES & WASTE SOLUTIONS 5,791,296 1,315,733 2,276,104 297,477 2,573,581 3,217,715 PLANNING & REGENERATION Economic Regeneration 18,450,305 2,951,546 5,194,035 11,571,387 16,765,422 1,684,882 City Deal 18,453,423 9,971,646 16,657,815 803,622 17,461,437 991,986 Enterprise Projects 2,785,022 1,178,124 1,235,991 1,244,814 2,480,805 304,217 Antonine Wall Project 215,013 180,096 184,910 30,103 215,013 0 TOTAL PLANNING & REGENERATION 39,903,763 14,281,412 23,272,751 13,649,926 36,922,676 2,981,085 HOUSING PROPERTY & PROJECTS Water Quailty / Ventilation 561,862 554,792 554,792 7,070 561,862 0 TOTAL HOUSING PROPERTY & PROJECTS 561,862 554,792 554,792 7,070 561,862 0 TOTAL ENTERPRISE & COMMUNITIES 159,192,373 72,409,655 113,552,201 22,587,106 136,139,306 23,053,066 YTD OUTTURN
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APPENDIX B Enterprise & Communities Capital Programme 2022-23 - Committee Budget Virement Requests 1st April 2022 - 6th January 2023 (PERIOD 10) Virement request Virement amount £ Thematic category From Thematic category To Committee approval required Acceleration Office Rationalisation 454,660 Office Rationalisation Year 3 Office Rationalisation Year 2 No Maintaining Existing Assets - windows, re-roofing, re- wiring and condition survey works for the Council's building assets 167,085 Maintaining Existing Assets - windows, re-roofing, re-wiring and condition survey works for the Council's building assetsYear 3 Maintaining Existing Assets - windows, re-roofing, re-wiring and condition survey works for the Council's building assetsYear 2 No Leisure Development 99,211 Leisure Development Year 3 Leisure Development Year 2 Environmental Assets replacement of plant and machinery 105,604 Environmental Assets replacement of plant and machineryYear 3 Environmental Assets replacement of plant and machineryYear 2 No Sub Total Acceleration 826,560 Transfers to future years Town and Community Hubs 2,286,347 Town and Community Hubs Year 2 Town and Community Hubs Year 3 No Rationalisation including ASN & Social Work 2,009,116 Rationalisation including ASN & Social Work Year 2 Rationalisation including ASN & Social Work Year 3 No Carbon Management 1,610,207 Carbon Management Year 2 Carbon Management Year 3 No Sustainable Estate 275,666 Sustainable Estate Year 2 Sustainable Estate Year 3 No 1140 Early Learning and Childcare Expansion 221,067 1140 Early Learning and Childcare Expansion Year 2 1140 Early Learning and Childcare Expansion Year 3 No Future Capital Receipts Investments 211,357 Future Capital Receipts Investments Year 2 Future Capital Receipts Investments Year 3 No Outdoor Education and Outdoor Spaces 3,200,000 Cemeteries/Tree Infrastructure 2,711,281 Cemeteries/Tree Infrastructure Year 2 Cemeteries/Tree Infrastructure Year 3 No Infrastructure and Transportation Improvements 2,125,366 Infrastructure and Transportation Improvements Year 2 Infrastructure and Transportation Improvements Year 3 No Road Asset Management including street lighting, road improvements and gateway signage 1,822,527 Road Asset Management including street lighting, road improvements and gateway signageYear 2 Road Asset Management including street lighting, road improvements and gateway signage Year 3 No Depot Rationalisation and Investment 1,818,311 Depot Rationalisation and Investment Year 2 Depot Rationalisation and Investment Year 3 No Vehicle Replacement Programme 1,399,404 Vehicle Replacement Programme Year 2 Vehicle Replacement Programme Year 3 Yes Economic Regeneration 1,684,882 Economic Regeneration Year 2 Economic Regeneration Year 3 No City Deal 991,986 City Deal Year 2 City Deal Year 5 No Enterprise Projects 304,217 Enterprise Projects Year 2 Enterprise Projects Year 5 No Sub Total Transfer to future years 22,671,734 Internal Virement Demolitions 500,000 Demolitions Year 2 Outdoor Education and Outdoor Spaces Year 3 No 27,552,223 Budget Reductions Design Fees 56,000 Infrastructure and Transportation Improvements 380,660 Greenspace infrastructure Health & Wellbeing 112,000 Road Asset Management including street lighting, road improvements and gateway signage 150,000 Sub Totals Budget Reductions 698,660 Total Enterprise & Communities (50,096,057)