Composite Capital Budget 2024/30 & Housing Investment Programme 2024/29 - Monitoring Report No. 2
Perth and Kinross Council · 20 November 2024
Back to Finance and Resources Committee — 20 November 2024 and its agenda
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PERTH & KINROSS COUNCIL Finance & Resources Committee 20 November 2024 COMPOSITE CAPITAL BUDGET 2024/30 & HOUSING INVESTMENT PROGRAMME 2024/29 – MONITORING REPORT No.2 Report by Chief Finance Officer (Report No. 24/319) 1. PURPOSE 1.1 This report provides a summary position to date for the 6-year Composite Capital Budget for 2024/25 to 2029/30 and the 5-year Housing Investment Programme for 2024/25 to 2028/29 and seeks approval for adjustments to the programmes. 2. RECOMMENDATIONS 2.1 It is recommended that the Committee: (i) notes the contents of the report. (ii) approves the proposed adjustments to the six-year Composite Capital Budget 2024/25 to 2029/30 set out in Sections 5 and 6 of the report and summarised in Appendices I and II. (iii) approves the proposed adjustments to the Housing Investment Programme Budget 2024/25 to 2028/29 set out in Section 7 of the report and summarised in Appendix III. (iv) notes progress with the delivery of major Capital projects as summarised in Appendix IV. 3. STRUCTURE 3.1 The report is structured over the following sections: • Section 4: Background / Main Issues • Section 5: Composite Capital Programme – Gross Capital Resources • Section 6: Composite Capital Programme – Expenditure • Section 7: Housing Investment Programme • Section 8: Summary 4. BACKGROUND / MAIN ISSUES 4.1 The Finance & Resources Committee approved an updated six-year gross Composite Capital Budget for 2024/25 to 2029/30 totalling £619.172 million and a five-year gross Housing Investment Programme for 2024/25 to 2028/29 totalling £96.917 million at its meeting on 18 September 2024 (report 24/261 refers).
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4.2 This report advises on expenditure to 30 September 2024, and the latest estimate of the projected outturn for each of the years to 2029/30 for the Composite Programme and 2028/29 for the Housing Investment Programme. 5. COMPOSITE CAPITAL PROGRAMME – GROSS CAPITAL RESOURCES 5.1 As a result of the latest monitoring exercise, further adjustments to the budget are proposed. The current estimated total gross capital resources (which includes movements in Capital Receipts, Capital Grants, Contributions and borrowing) available over the six years 2024/25 to 2029/30 amount to £619.672 million. 5.2 Movements from the revised Composite Capital Budget approved on 18 September 2024 for the six years are summarised in the table below, and the constituent elements for each year are shown in Appendix I. Total Gross Composite Capital Resources Approved 18 Sept 2024 Current Estimate Movement £m £m £m 2024/25 174.999 170.283 (4.716) 2025/26 113.301 114.177 0.876 2026/27 134.107 136.685 2.578 2027/28 84.890 84.962 0.072 2028/29 64.097 65.787 1.690 2029/30 47.778 47.778 0 Total 619.172 619.672 0.500 5.3 The above movements can be summarised as follows: Total £m Increase in Grants (Section 5.4) 2.038 Increase in Revenue, Third Party, Developers & Tay Cities Contributions (Section 5.6) 0.235 Reduction in Borrowing Requirement (Section 5.7 and 5.8) (1.773) Increase in Gross Capital Resources (Section 5.2) 0.500 5.4 There has been some movements in Capital Grants across the 6-year programme. The Scottish Government announced the allocations for Free School Meal expansion in September 2024, with £2.326 million allocated to the Council as part of the General Capital Grant for 2024/25. This replaces the £1.95 million previously removed in the last report and represents an increase of £376,000. In addition, there is a reduction of £288,000 on the Recycling Fund following the programme being completed. 5.5 Capital receipts are unchanged overall, with only a small movement in General Fund receipts between 2024/25 and 2025/26. Consequently, there are no movements in Commercial Property receipts carried forward to future years.
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5.6 There is an adjustment (reduction) of £20,000 in Tay Cities Deal Contributions on the Local Full Fibre Network programme following completion of the works. Other Third-Party Contributions have increased by £183,000 following the awards of funding on Neighbourhood/Settlement Parks (£84,000) and Countryside Paths (£99,000), whilst Revenue Contributions have increased by £83,000 for the Mosaic System Implementation, less £11,000 on the Countryside Bridges programme. 5.7 The projected borrowing requirement in 2024/25, which is effectively the balancing item for resources, is £135.515 million. This is £5.803 million lower than the borrowing requirement approved by this Committee on 18 September 2024. 5.8 The total borrowing requirement in the subsequent years 2025/26 to 2029/30 has increased by £4.030 million to £347.512 million, resulting in an overall reduction of £1.773 million in the total level of borrowing across the whole 6- year programme. This reduction in borrowing is summarised as follows: 2024/25 2025/26 2026/27 Later Years Total £m £m £m £m £m Increase in Capital Grants (Section 5.4) (2.038) 0 0 0 (2.038) Increase in Expenditure on Free School Meals Expansion (Section 6.5.1) 0 0 0.376 0 0.376 Reduction in Expenditure on the Recycling Fund Programme (Appendix II) (0.184) 0 0 0 (0.184) Increase in Prudential Borrowing – Housing & Communities (Section 6.3.2) 0 0.115 0 0 0.115 Reduction in Prudential Borrowing (net) – Environment & Infrastructure (Section 6.2.4) (0.042) 0 0 0 (0.042) Movements arising from re- phasing of expenditure and receipts (Appendix II) (3.539) 0.698 2.202 0.639 0.000 Increase/(Reduction) in Borrowing Requirement (5.803) 0.813 2.578 0.639 (1.773) 5.9 The chart below shows the Capital Resources required to fund the 2024/25 Composite Capital Programme following the proposed budget adjustments detailed in this report.
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6. COMPOSITE CAPITAL PROGRAMME – EXPENDITURE 6.1 Total Expenditure and Proposed Budget Adjustments to the Current Programme 6.1.1 Total expenditure (net of grants and contributions) to 30 September 2024 on the Composite Capital Programme is detailed in Appendix II and summarised as follows: Projected Outturn (£m) Net Expenditure to 30 Sept 2024 (£m) % of Projected Outturn Environment & Infrastructure 37.187 12.053 32% Housing & Communities 1.829 0.193 11% Economy, Development & Planning 51.840 18.983 37% Property Services 68.197 31.623 46% Customer & Digital Services 8.418 2.119 25% Health & Social Care 0.962 0.274 28% Total Net Capital Expenditure 168.433 65.245 39% 6.1.2 Appendix IV includes updates on the progress of delivering the Council’s major Capital projects. 6.2 Environment & Infrastructure 6.2.1 The Strategic Lead has reviewed the programme for Environment & Infrastructure and proposed various budget adjustments, the most significant of which are described below. 79.5% 16.0% 0.0% 2.2% 0.7% 1.6% 4.5% Projected Capital Resources 2024/25 (October 2024) Borrowing (£135.515M) Grants (£27.201M) Tay City Deal (-£0.069M) Developer Contributions (£3.707M) Third Party & Revenue Contributions (£1.232M) Receipts (£2.697M) £Million
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6.2.2 Within Asset Management – Bridges, it was previously anticipated that the majority of work at Garry Viaduct would take place in 2026/27 and 2027/28. With other bridge refurbishment works taking place over the next few years the likely timeframe for the project at Garry Viaduct has been reviewed and it is expected that works will now not complete until 2028/29. It is proposed that £45,000 from 2025/26 and £1.645 million from 2026/27 is moved to 2028/29. 6.2.3 The following rephasings of budgets are also proposed: Project 2024/25 £m 2025/26 £m Later Years £m Description Additional Road Safety – Pedestrian Crossings (0.093) 0.093 0.000 With the team focussing on school safety measures and the 20mph programme, pedestrian crossings have not progressed as previously planned and it proposed to move £93,000 from the current year to next. Bridge Refurbishment Programme (0.220) 0.220 0.000 Moved from the current year to next due to resourcing issues within the team. Wheeled Bin and Recycling Containers (Prudential Borrowing) (0.042) 0.000 0.000 There is a reduction in wheeled bins and recycling containers required following the completion of the Recycling Improvement Programme. 6.2.4 All the above proposed adjustments, together with other small movements, have been reflected in Appendices I & II. 6.3 Housing & Communities 6.3.1 The Strategic Lead has reviewed the programme for Housing & Communities and proposed various budget adjustments, the most significant of which are described below. 6.3.2 Within Prudential Borrowing, it is proposed that borrowing is increased by £115,000 in 2025/26 in order for a community transport vehicle to be purchased for use by the Glenfarg Community Transport Group to support their bus services in Kinross-shire. 6.3.3 The following rephasings and virements of Community Greenspace budgets are also proposed:
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Project 24/25 £m 25/26 £m 27/28 £m Virement £m Description Play Areas – Improvements Implementation Strategy (0.348) 0.348 0.000 (0.037) Due to limited resourcing within the team works on play areas have not progressed as far as planned. £348,000 has been moved from the current year to next year. In addition, it is proposed that £37,000 is vired from Play Areas to Settlement/Neighbourhood Parks in 2025/26. Settlement / Neighbourhood Parks Third Party Contribution (0.179) (0.084) 0.263 0.000 0.000 0.000 0.037 - As with Play Areas, due to limited resources within the team, some works have not progressed as planned. In addition, the Victory Park Group have provided a third-party contribution towards improvements underway in Bridge of Earn. As a result, £263,000 has been moved from the current year to next year. Countryside Sites (0.139) 0.000 0.139 - The team are currently prioritising the playpark renewal grant works with no planned works to Countryside Sites in the current year. It is proposed the budget is moved to 2027/28. Community Greenspace Sites (0.305) 0.204 0.000 (0.101) With prioritisation of playpark renewal, no works are planned in the current year for Community Greenspace Sites. It is proposed that £204,000 is moved from the current year to next year. In addition, it is proposed that £101,000 is vired to other Greenspace Budgets as set out below. Community Greenspace Bridges Revenue Contribution Premier parks 0.069 0.011 0.021 0.000 0.000 0.000 0.000 0.000 0.000 0.069 0.011 0.021 From Community Greenspace Sites to cover increased costs of bridge repairs. From Community Greenspace sites to cover shortfall in revenue contribution. From Community Greenspace Sites to supplement budget available to cover works in the current year. Cemetery Extensions (0.051) (0.169) 0.220 - Due to reduced capacity it is proposed to move a total of £220,000 of the budget to 2027/28. 6.3.4 All the above proposed adjustments, together with other small movements, have been reflected in Appendices I & II.
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6.4 Economy, Development & Planning 6.4.1 The Strategic Lead has reviewed the programme for Economy, Development & Planning and proposed the following budget adjustment. 6.4.2 Within Perth & Kinross Place-making, the project for Perth, People, Place has been put on hold following the agreement of the Council to engage in public consultation for the Perth City Centre Development & Design Framework (Report 24/241 refers). It is therefore proposed that this budget of £3.598 million is moved from the current year to 2026/27. 6.4.3 Within Other Planning Projects, in line with previous movements in expenditure on the Perth Eco-Innovation Park, the third-party income of £999,000 has been moved from the current year to 2027/28. 6.4.4 All the above proposed adjustments, together with other small movements, have been reflected in Appendices I & II. 6.5 Property Services 6.5.1 Within Project & Contracts, an additional £376,000 towards the Free School Meal Expansion Programme has been granted by Scottish Government and the expenditure budget has been increased accordingly. This adjustment, together with other small movements, have been reflected in Appendices I & II. 6.6 Customer & Digital Services 6.6.1 Within Customer & Digital Services, the go-live date for the Mosaic Social Work System has been delayed until February 2025 whilst development, testing and implementation of the system is completed. Consequently, this has resulted in an increase in the estimated cost of the project of £450,000. Further, the Revenue Contribution in 2024/25 of £41,000 is required to extend the licence for the existing system and so is no longer available for the Project, however an additional Revenue Contribution of £124,000 is now available in the final year of the project in 2027/28. 6.6.2 Following savings identified within the ICT Infrastructure & Replacement Programme budget in the last report (report 24/261 refers), it is proposed that £450,000 is applied from the budget in 2025/26 to meet the increase in costs on the Mosaic Project. This proposed adjustment has been reflected in Appendices I & II. 7. HOUSING INVESTMENT PROGRAMME 7.1 The total current estimated expenditure, net of contributions, for the Housing Investment Programme over the 5 years 2024/25 to 2028/29 remains unchanged at £96.917 million. Movements from the previous estimates are summarised in the table below and detailed in Appendix III.
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Approved 18 Sept 2024 Current Estimate Movement £m £m £m 2024/25 27.818 28.161 0.343 2025/26 20.256 20.256 0.0 2026/27 15.633 15.633 0.0 2027/28 19.845 19.502 (0.343) 2028/29 13.365 13.365 0.0 Total 96.917 96.917 0.0 Total Expenditure to 30 September 2024 (Housing Investment Programme) 7.2 Net expenditure for 2024/25 to 30 September 2024 amounts to £11.476 million and receipts amount to £84,000. Therefore, the borrowing requirement for the year to date is £11.392 million. 7.3 The Strategic Leads for Housing & Communities and Property Services have reviewed the Housing Investment Programme and proposed the budget adjustments outlined below. 7.4 It is proposed to draw down £1.776 million from the Future Developments New Build Programme in 2024/25, to be applied as follows: • Lynedoch Road Phase 3, Methven. Estimated expenditure for new house building for this phase of the scheme is £1.097 million. Scottish Government grant of £0.556 million has been awarded to the scheme, with £100,000 to be applied form the Second Home Council Tax Reserve, thus leaving £441,000 to be funded from the Future Developments budget. • Council House Buy-Backs. It is proposed to increase the budget by £1.335 million in 2024/25 to meet the ongoing purchase programme. It is anticipated that further increases in the Buy-Back budget will be required as the year progresses, with 73 property purchases completed and a further 19 anticipated to complete by the end of December 2024. 7.5 It is also proposed to allocate some of the SHQS Future Developments Budget in 2027/28 to current schemes in 2024/25, as follows: • External Fabric - £224,000 for continuation of flat roof works to run concurrently with other roofing works in the same area of Perth within the current year and for additional chimney works. • Environmental Improvements - £119,000 for additional footpath works at Pullar Terrace, works to reduce slippery stair treads, as well as garden fence works at various locations. 7.6 There has been an increase in Capital Receipts in the current year of £79,000 relating to the annual LHC Procurement Rebate for various works previously undertaken. Therefore, the borrowing requirement over the five-year programme has reduced by this amount.
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8. BUDGET OVERVIEW 8.1 The projected net expenditure outturn in 2024/25 for the Composite Capital Budget is £168.433 million and represents 85% of the original 2024/25 budget approved on 24 April 2024 (£198.184 million). The revised budget is based on the latest projections of expenditure and all budget adjustments outlined within this report. 8.2 Net expenditure to 30 September 2024 on the Composite Capital Budget is £65.245 million and represents 39% of the proposed revised budget for 2024/25 of £168.433 million. 8.3 The projected net expenditure outturn in 2024/25 for the Housing Investment Programme is £28.161 million and represents 131% of the original 2024/25 budget approved on 26 April 2024 (£21.536 million). This increase reflects the allocation of future years block budgets to specific projects in 2024/25. 8.4 Net expenditure to 30 September 2024 on the Housing Investment Programme is £11.476 million which represents 41% of the proposed revised budget for 2024/25 of £28.161 million. 8.5 The Council’s total Borrowing Requirement to 30 September 2024, based on the Composite and Housing Investment Programmes, is £60.816 million. The estimated overall Council Borrowing Requirement for 2024/25 as a whole has reduced by £5.539 million to £161.759 million as a result of the monitoring adjustments reflected within this report. This reflects a reduction in estimated borrowing in the current year on the Composite Programme of £5.803 million, and an increase on the Housing Investment Programme of £0.264 million. 8.6 In the context of the Capital Budget, the borrowing above refers specifically to the funding of capital expenditure and therefore the need to borrow. The actual amounts and timing of the borrowing is undertaken as part of the Council’s Treasury Management operations and reported within the Treasury Activity and Compliance reports throughout the year. Author(s) Name Designation Contact Details John Jennings Senior Accountant CHXFinance@pkc.gov.uk Approved Name Designation Date Scott Walker Chief Finance Officer 11 November 2024
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ANNEX 1. IMPLICATIONS, ASSESSMENTS, CONSULTATION AND COMMUNICATION Strategic Implications Yes / None Community Plan / Single Outcome Agreement None Corporate Plan Yes Resource Implications Financial Yes Workforce Yes Asset Management (land, property, IST) Yes Assessments Equality Impact Assessment Yes Strategic Environmental Assessment Yes Sustainability (community, economic, environmental) Yes Legal and Governance None Risk None Consultation Internal Yes External None Communication Communications Plan None 1. Strategic Implications Corporate Plan 1.1 The Council’s Corporate Plan 2022 – 2027 lays out seven outcome focussed strategic objectives which provide clear strategic direction, inform decisions at a corporate and service level and shape resources allocation. They are as follows: • Tackling Poverty • Tackling climate change and supporting sustainable places • Growing a sustainable and inclusive local economy • Enabling our children and young people to achieve their full potential • Protecting and caring for our most vulnerable people • Supporting and promoting physical and mental wellbeing • Placing communities at the heart of how we work 1.2 This report relates to all of these objectives. 2. Resource Implications Financial 2.1 There are no direct financial implications arising from this report other than those reported within the body of the main report.
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Workforce 2.2 There are no direct workforce implications arising from this report other than those reported within the body of the main report. Asset Management (land, property, IT) 2.3 There are no direct asset management implications arising from this report other than those reported within the body of the main report. 3. Assessments Equality Impact Assessment 3.1 Under the Equality Act 2010, the Council is required to eliminate discrimination, advance equality of opportunity, and foster good relations between equality groups. Carrying out Equality Impact Assessments for plans and policies allows the Council to demonstrate that it is meeting these duties. 3.2 The information contained within this report has been considered under the Corporate Equalities Impact Assessment process (EqIA) and has been assessed as not relevant for the purposes of EqIA. Strategic Environmental Assessment 3.3 The Environmental Assessment (Scotland) Act 2005 places a duty on the Council to identify and assess the environmental consequences of its proposals. 3.4 The information contained within this report has been considered under the Act. However, no action is required as the Act does not apply to the matters presented in this report. Sustainability 3.5 Under the provisions of the Local Government in Scotland Act 2003 the Council has to discharge its duties in a way which contributes to the achievement of sustainable development. In terms of the Climate Change Act, the Council has a general duty to demonstrate its commitment to sustainability and the community, environmental and economic impacts of its actions. 3.6 The information contained within this report has been considered under the Act. However, no action is required as the Act does not apply to the matters presented in this report. 4. Consultation Internal 4.1 The Executive Leadership Team and the Strategic Leadership Team have been consulted in the preparation of this report.
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2. BACKGROUND PAPERS No background papers, as defined by Section 50D of the Local Government (Scotland) Act 1973 (other than any containing confidential or exempt information) were relied on to any material extent in preparing the above report. 3. APPENDICES • Appendix I – Composite Capital Programme - Estimated Capital Resources 2024/25 to 2029/30 • Appendix II – Composite Capital Programme - Summary of Capital Resources and Expenditure 2024/25 to 2029/30 • Appendix III – HRA Capital Investment Programme – Summary of Capital Resources and Expenditure 2024/25 to 2028/29 • Appendix IV – Significant Capital Projects Progress Update