Agenda Document Pack - Finance and Resources Committee - 20/11/2024
Perth and Kinross Council · 20 November 2024
Back to Finance and Resources Committee — 20 November 2024 and its agenda
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Securing the future… • Improving services • Enhancing quality of life • Making the best use of public resources Council Building 2 High Street Perth PH1 5PH 14/11/2024 A hybrid meeting of the Finance and Resources Committee will be held in the Council Chamber on Wednesday, 20 November 2024 at 13:00. If you have any queries please contact Committee Services on (01738) 475000 or email Committee@pkc.gov.uk. THOMAS GLEN Chief Executive Those attending the meeting are requested to ensure that all notifications are silent on their device and other devices are in silent mode. Please note that the meeting will be broadcast online and recorded. The recording will be publicly available on the Council’s website following the meeting. Members: Councillor Stewart Donaldson (Convener) Councillor Grant Laing (Vice-Convener) Bailie Chris Ahern Councillor Peter Barrett Councillor Andy Chan Councillor Dave Cuthbert Councillor Eric Drysdale Councillor John Duff Councillor David Illingworth Provost Xander McDade Councillor Tom McEwan Bailie Claire McLaren Depute Provost Andrew Parrott Councillor John Rebbeck Councillor Caroline Shiers Councillor Colin Stewart Page 1 of 128
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Finance and Resources Committee Wednesday, 20 November 2024 AGENDA MEMBERS ARE REMINDED OF THEIR OBLIGATION TO DECLARE ANY FINANCIAL OR NON-FINANCIAL INTEREST WHICH THEY MAY HAVE IN ANY ITEM ON THIS AGENDA IN ACCORDANCE WITH THE COUNCILLORS’ CODE OF CONDUCT. 1 WELCOME AND APOLOGIES/SUBSTITUTES 2 DECLARATIONS OF INTEREST 3 MINUTE OF MEETING OF THE FINANCE AND RESOURCES COMMITTEE OF 18 SEPTEMBER 2024 FOR APPROVAL (copy herewith) 5 - 8 4 OUTSTANDING BUSINESS STATEMENT (copy herewith 24/317) 9 - 10 5 REVENUE BUDGET 2024/25 - UPDATE NO. 2 Report by Chief Finance Officer (copy herewith 24/318) 11 - 44 6 COMPOSITE CAPITAL BUDGET 2024/30 & HOUSING INVESTMENT PROGRAMME 2024/29 - MONITORING REPORT NO. 2 Report by Chief Finance Officer (copy herewith 24/319) 45 - 70 7 TREASURY ACTIVITY AND COMPLIANCE REPORT 2024/254 - 6 MONTHS TO 30 SEPTEMBER 2024 Report by Chief Finance Officer (copy herewith 24/320) 71 - 86 8 DRUMMOND ARMS, CRIEFF Report by Strategic Lead - Economy, Development and Planning (copy herewith 24/321) 87 - 128 Page 3 of 128
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FINANCE AND RESOURCES COMMITTEE Minute of hybrid meeting of the Finance and Resources Committee held in the Council Chamber, 2 Hight Street, Perth on Wednesday 18 September 2024 at 2.00pm. Present: Councillors S Donaldson and G Laing, and Bailie A Bailey, Provost X McDade, Depute Provost A Parrott and Councillors K Allan (substituting for Councillor A Chan), P Barrett, D Cuthbert, E Drysdale, J Duff, A Forbes (substituting for Bailie C Ahern), I James, D Illingworth, T McEwan, J Rebbeck, C Shiers and C Stewart. In Attendance: T Glen, Chief Executive; C Mailer, Depute Chief Executive; S Walker – Strategic Lead, Finance and Business Support; A O’Brien, N Ballentine, S Coyle, C Palmer, J Salisbury (Finance and Business Support); E Ritchie – Strategic Lead, Housing and Communities; D Stokoe (Housing and Communities); S Devlin, Strategic Lead – Education and Learning; A Singh – Strategic Lead, Children, Families and Justice; F Crofts, Strategic Lead, Environment and Infrastructure); P Taggart and N Taylor (Environment and Infrastructure); C Guild, Strategic Lead – Projects and Programmes; L Brady, K Fraser, N Sutherland, P Taylor (Customer and Digital Services); J Beveridge (Property Services); L Simpson, Strategic Lead – Legal and Governance; K Molley, A Brown and M Pasternak (all Legal and Governance); Apologies: Bailie C Ahern and Councillor A Chan. Councillor S Donaldson, Convener, Presiding. The Convener Led on items 1-7 and 9. The Vice-Convener led on item 8. 1. WELCOME AND APOLOGIES The Convener welcomed all those present to the meeting and apologies were noted as above. 2. DECLARATIONS OF INTEREST There were no declarations made in terms of the Councillors’ Code of Conduct. 3. MINUTE OF PREVIOUS MEETING (i) Minute of meeting of Finance and Resources Committee of 12 June 2024 The minute of meeting of the Finance and Resources Committee of 12 June 2024 was submitted and approved as a correct record. 3 Page 5 of 128
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(ii) Minute of meeting of the Employees Joint Consultative Committee of 18 March 2024 The minute of meeting of the Employees Joint Consultative Committee of 18 March 2024 was submitted and noted. 4. OUTSTANDING BUSINESS STATEMENT Resolved: The status of action in the Outstanding Business Statement (24/259) be noted and completed actions removed accordingly. 5. REVENUE BUDGET 2024/25 - UPDATE NO. 1 There was submitted a report by the Chief Finance Officer (24/260) providing an update on progress with the 2024/25 General Fund Revenue Budget based upon the June 2024 ledger, updated for any subsequent known material movements, and the projected financial position of the Housing Revenue Account. Resolved: (i) The contents of Report 24/260, be noted. (ii) The projected outturn for General Fund Services, as set out in Section 5 of Report 24/260 and Appendices 1 and 2, be noted. (iii) The projected outturn for Corporate Budgets, as set out in Section 6 of Report 24/260, be noted. (iv) The funding update, provided in Section 7 of Report 24/260, be noted. (v) The projected outturn for the Housing Revenue Account, as summarised in Section 8 of Report 24/260 and Appendix 3, be noted. (vi) the adjustments to the 2024/25 Management Revenue Budget, as detailed in Sections 10,11 & 12 of Report 24/260 and Appendices 1, 2, 4, 5, 6, 7 and 8, be approved. (vii) The financial risks, as set out in Section 13 of Report 24/260 and Appendix 9, be noted. 6. COMPOSITE CAPITAL BUDGET 2024/30 & HOUSING INVESTMENT PROGRAMME 2024/29 - MONITORING REPORT NO. 1 There was submitted a report by the Chief Finance Officer (24/261) (1) providing 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 (2) seeking approval for adjustments to the programmes. Resolved: (i) The contents of Report 24/261 be noted. (ii) The proposed adjustments to the six-year Composite Capital Budget 2024/25 to 2029/30, as set out in Sections 5 and 6 of Report 24/261 and summarised in Appendices I and II, be approved. (iii) The proposed adjustments to the Housing Investment Programme Budget 2024/25 to 2028/29, as set out in Section 7 of Report 24/261 and summarised in Appendix III, be approved. (iv) Progress with the delivery of major Capital projects, as summarised in Appendix IV, be noted. Page 6 of 128
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7. TRANSFORMATION AND CHANGE PROGRAMME UPDATE There was submitted a report by the Strategic Lead – Projects and Programmes (24/262) providing (1) an update on the progress of the Transformation & Change programme to date along with benefits realised in phase one; (2) actions underway from 1 July 2024 to progress the programme into phase two. Resolved: (i) It be approved that Phase One of the Transformation and Change programme is complete, and that delivery of Phase two is now underway and will continue to evolve as we progress (ii) The benefits realised in phase one of programme be noted. (iii) Phase two approach with the development of a formal Programme Management Office (PMO) model be approved. (iv) The overarching governance structure for the Programme be noted. 8. POLICY ON DISPOSAL OF MINIBUSES There was submitted a report by the Strategic Lead – Environment and Infrastructure (24/263) seeking approval to amend the Council’s policy on the disposal of Fleet and Mechanical Equipment with specific regard to minibuses which have reached the end of their operational life within Council service. Resolved: (i) The Policy for Disposal of Minibuses, as set out in Appendix 1 to Report 24/263, be approved. (ii) The application process and assessment criteria for community groups applying to take ownership of an end of operational life minibus within Council service, as set out in Appendix 2 to Report 24/263, be approved. (iii) The use of up to £50k from the Anti Poverty Measures Fund in earmarked reserves to support any required repair work to minibuses for MOT purposes before transfer to community groups be approved. 9. REVISED SCHEME OF THE EMPLOYEES JOINT CONSULTATIVE COMMITTEE There was submitted and noted a revised scheme of the Employees Joint Consultative Committee (24/264). Page 7 of 128
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FINANCE AND RESOURCES COMMITTEE OUTSTANDING BUSINESS STATEMENT (OBS) (Report No. 24/317) Please note that this statement sets out outstanding decisions of this committee along with an update and estimated completion date. Actions which are overdue are shaded for ease of reference. Where an update reflects that an action is complete then the Committee’s agreement will be sought to its removal from the OBS. No Minute Reference Subject Title Outstanding Action Update Lead Officer/ Service Action Due Action Expected 22. 23 Mar 23 Executive Sub- Committee Revenue Budget 2022/23 – Tayside Contracts The Strategic Lead - Legal and Governance to raise the issue of the 75% rule and the possibility of flexible voting arrangements with the Clerk of Tayside Contracts Joint Committee and the Head of Legal at Angus Council. A meeting to be arranged with the Chief Executive of Tayside Contracts and the Legal Leads from Angus, Dundee and Perth to discuss voting to discuss the voting arrangements. ONGOING Lisa Simpson 5 Feb 2025 5 Feb 2025 28. 18 Sept 2024 Item 5. Revenue Budget 2024/25 – Update No. 1 Recirculate the evaluation of the Warm Welcome Project from last year to members. Email response was circulated to members (31 October 2024). COMPLETED David Stokoe 20 Nov 2024 20 Nov 2024 29. 18 Sept 2024 Item 6. Composite Capital Budget 2024/30 & Housing Investment Programme 2024/29 – Monitoring Report No. 1 Further information to be shared with members on the Technology Upgrades Project and the difficulties in gaining access to schools. Email response was circulated to members (7 November 2024). COMPLETED John Beveridge 20 Nov 2024 20 Nov 2024 4 Page 9 of 128
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No Minute Reference Subject Title Outstanding Action Update Lead Officer/ Service Action Due Action Expected 30. 18 Sept 2024 Item 6. Composite Capital Budget 2024/30 & Housing Investment Programme 2024/29 – Monitoring Report No. 1 Information to be shared with members on if the General Fund had been repaid by the Car Park Trading Account from Covid times. Email response was circulated to members (12 November 2024). COMPLETED Scott Walker 20 Nov 2024 20 Nov 2024 Page 10 of 128
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PERTH & KINROSS COUNCIL FINANCE & RESOURCES COMMITTEE 20 NOVEMBER 2024 REVENUE BUDGET 2024/25 – UPDATE NO. 2 Contact Officer: Scott Walker, Chief Finance Officer (Report No. 24/318) 1. PURPOSE 1.1 This report provides an update on progress with the 2024/25 General Fund Revenue Budget based upon the August 2024 ledger, updated for any subsequent known material movements, and the projected financial position of the Housing Revenue Account. 1.2 The total net projected over spend on the 2024/25 General Fund Management Budget is £885,000 (£1.598 million at this time in 2023/24) (see Appendix 1). 2. RECOMMENDATIONS The Committee is requested to: A. note the contents of the report, B. note the projected outturn for General Fund Services set out in Section 5 and Appendix 1 and 2, C. note the projected outturn for Corporate Budgets set out in Section 6, D. note the funding update provided in Section 7, E. note the projected outturn for the Housing Revenue Account, which is summarised in Section 8 and Appendix 4, F. approve the adjustments to the 2024/25 Management Revenue Budget detailed in Sections 9, 10 & 11 and Appendices 1, 2, 4, 5, 6, and 7, G. note the financial risks set out in Section 12 and Appendix 8. 3. STRUCTURE Section 4 Background Section 5 Revenue Monitoring – Service Budgets Section 6 Revenue Monitoring – Corporate Budgets Section 7 Revenue Monitoring – Funding Section 8 Revenue Monitoring – Other Updates Section 9 2024/25 Additional Funding Section 10 2024/25 Virements Section 11 2024/25 Movements in Reserves Section 12 Financial Risks Section 13 Conclusions 5 Page 11 of 128
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4. BACKGROUND 4.1 This report updates the Committee on progress with the 2024/25 Revenue Budget. Appendix 1 to this report summarises the current projected year end (outturn) position for each Service based upon the August 2024 ledger, updated for any subsequent known material movements. 4.2 The budget reflected in Column 1 of Appendix 1 to this report is that approved by the Council in setting the final 2024/25 Revenue Budget on 28 February 2024 (Report No. 24/63 refers). In addition, adjustments approved by the Finance & Resources Committee on 24 April and 18 September 2024 (Report Nos. 24/130 and 24/260 refer) are reflected in Appendix 1 (Column 2). 5. REVENUE MONITORING – SERVICE BUDGETS 5.1 The total net projected over spend on Service budgets, which is summarised in Section 1 of Appendix 1 to this report, is £929,000 which represents 0.3% of total net Service expenditure. This is a reduction of £473,000 from the last update. 5.2 Details of variances against individual Service budgets are shown in Appendix 2 to this report with the most significant variances summarised below. 5.3 The management of Service over and under spends are considered throughout the financial year and may also form part of the Revenue Budget strategy for future years. 5.4 There remains a risk that the Council continues to experience increases in costs over the short to medium term that are higher than budgeted. Going forward, this may continue to have an impact on projected outturns and future years’ budgets. 2024/25 Pay Awards 5.5 The full financial implications of the 2024/25 pay awards for all staff groups have not been included within this latest update. The pay award for teaching staff has been agreed and it is anticipated that this will be paid at the end of November. The pay award for non-teaching staff has not been agreed, but similarly will be paid at the end of November. 5.6 The financial implications of these pay awards will be included in the next update to the Committee. 5.7 There will also be financial implications for Tayside Contracts which will flow through to the constituent Councils in the form of increased charges. Education & Learning 5.8 The projected outturn for Education & Learning excluding Devolved School Management (DSM) and the Pupil Equity Fund (PEF) is currently anticipated Page 12 of 128
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to be £1.164 million or 0.7% more than budget which represents a movement of £291,000 from the last update. The individual elements contributing to this movement are summarised in the following table with commentary on the significant movements below. Function Projected Outturn Movement £’000 % £’000 Education & Learning Core Under spend (5) (0.4) 0 Nursery Sector Under spend (677) (2.82) 0 Primary Sector Over spend 1,328 2.89 (156) Secondary Sector Over spend 80 2.1 0 Special Sector Over spend 18 0.09 27 Home to School Transport Over spend 420 3.93 420 TOTAL Over spend 1,164 0.70 291 5.9 In the Primary Sector there is a reduction in the projected over spend of £156,000 following an update in staff cost projections. 5.10 In Home to School Transport there is an increase in the projected over spend of £420,000 based on the latest forecasts on both demand and price. 5.11 The Devolved School Management Scheme is currently projected to be on target. However, schools are experiencing challenges in delivering approved staff slippage targets and facing inflationary pressures against budgets that have been reduced over previous years. The budgets for the Devolved School Management scheme are allocated by financial year (April – March), whereas expenditure is incurred by academic year (August – June). 5.12 At this stage of the academic year, expenditure met from the Pupil Equity Fund (PEF) is projected to be £100,000 less than the allocation from the Scottish Government of £1.874 million. Schools are being instructed to use this year’s PEF by 31 March 2025. It is anticipated that the projected under spend on teacher and support costs will be carried forward to 2025/26 to meet commitments. The budgets for the Pupil Equity Fund scheme are allocated by financial year, whereas expenditure is incurred by academic year. Children, Families & Justice 5.13 The projected outturn for Children, Families & Justice is still currently anticipated to be on target against budget. The individual elements contributing to this position are summarised in the following table with narrative on the significant variances below. Function Projected Outturn Movement £’000 % £’000 Children & Families On target 0 - n/a Justice Service On target 0 - n/a TOTAL On Target - - n/a Page 13 of 128
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5.14 Despite Children & Families projections still being on target against budget, there are still pressures on residential placements which are being offset by foster, kinship and adoption payments. Economy, Development & Planning 5.15 The projected outturn for Economy, Development & Planning is currently anticipated to be £60,000 more than budget. The individual elements contributing to this position are summarised in the following table with narrative on the significant variances below. Function Projected Outturn Movement £’000 % £’000 Service Wide Under spend (100) (1.3) (100) Business & Investment Over spend 70 7.4 70 Tourism, Culture & Place Over spend 150 1.4 150 Development Management & Building Standards Under spend (60) - (60) TOTAL Over spend 60 0.3 60 5.16 Service Wide there is a projected under spend of £100,000 due to staff slippage in excess of budgeted levels. 5.17 In Business & Investment there is a projected over spend of £70,000 for the operating costs of Perth Harbour. 5.18 In Tourism, Culture & Place there is a projected over spend of £150,000 in relation to the delivery of previously approved savings from the review of ALEOs. 5.19 In Development Management & Building Standards there is a net projected under spend of £60,000 due to additional planning & building warrant income partially offset by legal costs relating to planning appeals. Environment & Infrastructure 5.20 The projected outturn for Environment & Infrastructure is currently anticipated to be £530,000 less than budget. The individual elements contributing to this position are summarised in the following table with narrative on the significant variances below. Function Projected Outturn Movement £’000 % £’000 Service Wide Under spend (250) (1.2) (250) Traffic & Network Under spend (50) (4.6) (50) Waste Disposal Under spend (350) (4.1) (350) Fleet Over spend 120 - 120 TOTAL Under spend (530) (1.5) (530) 5.21 Service Wide there is a projected under spend of £250,000 due to staff slippage in excess of budgeted levels. Page 14 of 128
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5.22 In Traffic & Network there is a projected under spend of £50,000 due to additional income from statutory road network works. 5.23 In Waste Disposal there is a projected under spend of £350,000 due to savings on the waste disposal contract and additional income from sale of recyclates, both as a result of the new twin streaming collection service. 5.24 In Fleet there is a net projected over spend of £120,000 due to the additional costs of vehicle materials and repairs. Housing & Communities 5.25 The projected outturn for Housing & Communities is currently anticipated to be £95,000 or 0.1% less than budget which represents a movement of £85,000 from the position last reported. The individual elements contributing to this movement are summarised in the following table with commentary on the significant movements below. Function Projected Outturn Movement £’000 % £’000 Service Wide Under spend (150) (1.6) (75) Housing General Fund Over spend 40 0.5 (10) Bereavement Services Over spend 15 1.9 0 TOTAL Under spend (95) (0.5) (85) 5.26 On a Service Wide basis, there is an increase in the projected under spend of £75,000 due to updated staff cost projections. Property Services 5.27 The projected outturn for Property Services is currently anticipated to be £649,000 or 1.0% more than budget which represents a movement of £37,000 from the position last reported. The individual elements contributing to this movement are summarised in the following table with commentary on the significant movements below. Function Projected Outturn Movement £’000 % £’000 Service Wide Over spend 328 0.5 (98) Energy Under spend (239) (2.8) 61 Maintenance Over spend 150 3.2 n/a Facilities Management Over spend 240 3.9 n/a Catering Over spend 170 2.4 n/a TOTAL Over spend 649 1.0% (37) 5.28 On a Service Wide basis, there is a reduction in the projected over spend of £98,000 following an update on staff cost and income projections. 5.29 On Energy, there is a reduction in the projected under spend of £61,000 due to updated rates and consumption information. Page 15 of 128
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Legal & Governance 5.30 Within Legal & Governance there is a projected over spend of £78,000 or 1.7% which represents a movement of £38,000. This movement is the result of updated staff cost and income assumptions. Customer & Digital 5.31 The projected outturn for Customer & Digital is currently anticipated to be £89,000 or 0.8% more than budget which represents a reduction of £98,000 from the last update. The individual elements contributing to this movement are summarised in the following table with commentary on the significant movements below. Function Projected Outturn Movement £’000 % £’000 IT Over spend 69 1.2 69 Revenues & Benefits Over spend 20 0.3 (167) TOTAL Over spend 89 0.8% (98) 5.32 In IT there is an increase in the projected over spend of £69,000 on staff costs as the slippage target is not currently being met. 5.33 In Revenues & Benefits there is a reduction in the projected over spend of £167,000 due to under spends on staff costs and additional income partially offset by an additional expenditure on social housing providers. Strategic Planning & Performance 5.34 Within Strategic Planning & Performance, there is a projected under spend of £62,000 or 0.9% which represents an increase of £18,000. Finance & Business Support 5.35 The projected outturn for Finance & Business Support is currently anticipated to be £444,000 or 5.1% less than budget which represents an increase of £94,000 since the last update. The individual elements contributing to this movement are summarised in the following table with commentary on the significant variances below. Function Projected Outturn Movement £’000 % £’000 Finance Over spend 4 0.0 (13) Business Support Under spend (448) (11.5) (81) TOTAL Under spend (444) (5.1) (94) 5.36 Across Business Support, there is an increase in the projected under spend of £81,000 primarily on staff costs due to the accelerated delivery of approved savings. Page 16 of 128
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6. REVENUE MONITORING – CORPORATE BUDGETS 6.1 Included within Section 2 of Appendix 1 is an update on the Council’s Corporate budgets. More information on variances against individual budget headings are set out below. Health & Social care 6.2 On 23 September 2024, the Audit & Performance Committee of the Perth & Kinross Integration Joint Board (IJB) received a report on the 2024/25 Financial Position (Report No. G/24/147 refers). After the application of earmarked Reserves and non-recurring funding, this report presented a projected over spend of £1.637 million. This position is consistent with many other integration joint boards who also face significant financial challenges in the current financial year. 6.3 On 2 October 2024, Perth & Kinross Integration Joint Board approved a Financial Recovery Plan which aimed to reduce expenditure for the remainder of 2024/25 (Report No. G/24/163 refers). The measures approved, totalling £1.3 million, included vacancy management, further cost control and the application of additional earmarked Reserves. It is projected that these measures will reduce the projected over spend to £337,000, This remaining expenditure is being incurred against health services as shown in Appendix 3. 6.4 The Integration Joint Board will be presented with a further update at its meeting on 11 December 2024. Council Tax Reduction Scheme 6.5 The application of the Council Tax Reduction Scheme is a statutory function for the Council. The promotion and encouragement of take up is a key responsibility for the Council, particularly when households are facing significant pressures on the cost of living. 6.6 The level of expenditure incurred by the Council is dependent upon two main drivers, firstly, the average number of weekly caseload and, secondly, the average value of weekly entitlements. 6.7 In the current financial year, the Council is supporting approximately 8,600 households across Perth and Kinross with the Council Tax Reduction Scheme with an average award of £16.91 per week. This results in a projected over spend on the Council Tax Reduction Scheme of approximately £150,000 which is reflected in Appendix 1. 7. REVENUE MONITORING – FUNDING 7.1 Further information on the Council’s funding is set out within Section 3 of Appendix 1. More information on variances against individual budget headings are set out below. Page 17 of 128
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Council Tax Income 7.2 The amount of income the Council will generate from Council Tax is dependent on two main factors, firstly the collection levels and secondly, the number of Band D properties on the Valuation Roll. 7.3 Monitoring of Council Tax collection levels is carried out monthly. The following graph sets out collection performance to 31 October 2024 together with prior year comparative figures for the previous five financial years. 7.4 Between 2019/20 and 2023/24, the average collection figure to 31 October was 63.79%. The actual collection figure to 30 September 2024 was 63.54% which is 0.25% less than the five-year average and the comparable position in 2023. Page 18 of 128
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7.5 Secondly, in setting the Council’s Revenue Budget, assumptions are made on increases in the number of Band D equivalent properties. The graph set out below suggests that actual growth levels are in line with budget assumptions. 7.6 Given the 2024/25 collection information set out above and the growth in the number of Band D equivalent properties, it is currently anticipated that Council Tax income will exceed the budget by £250,000 in the current financial year which is reflected in Appendix 1. Non-Domestic Rates 7.7 The actual collection rate to 31 October 2024 was 67.43%, compared to 51.83% for the same period in 2023/24. 8. REVENUE MONITORING – OTHER UPDATES Impact on Arm’s Length External Organisations (ALEOs) 8.1 The Council continues to work closely with its three Arm’s Length External Organisations (ALEOs) – Live Active Leisure (LAL), Perth Theatre & Concert Hall (PTCH) and Culture Perth & Kinross (CPK) who make an important contribution to the Corporate Plan through the current Culture, Physical Activity and Sport Strategies approved by Council in May 2023. 8.2 Currently, for the current financial year, all three ALEOs are projecting a deficit that is in line with their approved budgets. 8.3 The long-term sustainability of the Council’s ALEOs across future financial years will be kept under review with updates provided to future meetings of the Finance & Resources Committee. Page 19 of 128
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Tayside Contracts 8.4 The operating environment for Tayside Contracts remains challenging. They continue to experience significant inflationary pressures on the price of staple foods – beyond that of the headline CPI and RPI rates quote more widely. 8.5 Beyond that, negotiations on the 2024/25 pay award are still ongoing. Should the outcome of the negotiations exceed budgeted levels, without sufficient external funding forthcoming, there is a risk that this will cause a further significant risk to the profitability of Tayside Contracts. 8.6 Tayside Contracts continue to identify mitigating actions and the three constituent Councils are looking at how they may assist. Work continues between officers of the Council and Tayside Contracts to further refine these projections. 8.7 Both of these pressures may impact on the Council in the form of a request for additional financial support, as has been the case in previous financial years and / or the non-achievement of the budgeted income from the share of Tayside Contract’s surplus. 8.8 At this stage, the potential costs of providing additional financial support have not been factored into the Council’s projections. Any proposal to provide additional funding to Tayside Contracts will be brought back to a future meeting of the Finance & Resource Committee for approval by elected members. 8.9 In addition, given the financial challenges facing Tayside Contracts, there is a risk that the budgeted amount from the Trading Operations surplus of £550,000 will not be received in the current year. Housing Revenue Account 8.10 The Housing Revenue Account is currently projected to break even in the current financial year. The main elements are summarised below and set out in Appendix 5. 8.11 Across the Housing Revenue Account activity there is a net reduction in the projected under spend of £88,000. This is made up of additional costs in relation to the garden maintenance contract and energy performance certificates partially offset by additional staff slippage. 8.12 As a result of the variances identified above Capital from Current Revenue will reduce by £88,000. 9. 2024/25 ADDITIONAL FUNDING 9.1 Since elected members were provided with the 2024/25 Revenue Budget update on 18 September 2024 (Report No. 24/260 refers), notification has been received of additional resources in the current financial year from several sources as set out below. To ensure that the 2024/25 Management Budget continues to reflect the operational requirements of the Council, Page 20 of 128
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several adjustments are required, which are summarised below and included in Appendix 1 and Appendix 6. Scottish Government – Revenue Support Grant: • Children’s Social Care Pay Uplift - £412,414 (Children, Families & Justice) • Children’s Social Care Pay Uplift - £30,586 (Education & Learning) • Scottish Milk Subsidy Scheme - £28,000 (Education & Learning) • No One Left Behind 2024/25 – Employability Child Poverty Co- Ordinators - £72,000 (Economy, Development & Planning) • 2024-25 local government pay offer (for SJC, Craft and Chief Officers) - £2.099 million (Corporate Pay award budget – allocated to strategic leads after processed by payroll) 9.2 The Scottish Government has advised that the increase in Revenue Support Grant identified above of £2.642 million will be made through a redetermination of the Council’s Revenue Support Grant. It is therefore necessary to adjust budgets for Children, Families & Justice, Education & Learning, Economy Development & Planning, Corporate Pay Award and Revenue Support Grant. 9.3 ACTION: The Council is asked to approve the adjustments set out at paragraph 9.1 which are reflected in Appendix 1 (Column 3) to this report. Other Funding 9.4 Other funding amounting to £771,585 will be paid outside the Revenue Support Grant mechanism as Other Grant income and is, therefore, cost neutral in terms of the budget summary. Details of this funding is set out in Appendix 5. 9.5 ACTION: The Committee is asked to note the receipt of £771,585 of additional resources, with this funding being reflected within Education & Learning and Strategic Planning, People & Performance as additional grant income. The current projected outturn assumes that all these additional resources will be fully expended in 2024/25 or will be carried forward under the terms of the grant award. 10. 2024/25 VIREMENTS Contribution to/from Capital Fund 10.1 In line with the strategy for managing the Council’s Capital Programme over the medium term, it is recommended that the eventual over or under spend on Capital Financing Costs and Interest on Revenue Balances be transferred from or to the Capital Fund. 10.2 The latest monitoring indicates a projected reduction in capital financing costs (loan charges) of £18,000 based on the latest treasury management activity and an increase of £406,000 in income from interest on revenue balances due Page 21 of 128
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to improved cashflows. This will result in an increased Contribution to the Capital Fund of £424,000 in the current financial year. 10.3 ACTION: The Committee is requested to approve the virement of £18,000 from the Capital Financing Costs (Loan Charges) Budget and £406,000 to Interest on Revenue Balances with a corresponding increase in the projected Contribution to the Capital Fund. These adjustments have been reflected in Appendix 1 (Column 5) to this report. 10.4 At 31 March 2024, the unaudited Annual Accounts included a Capital Fund balance of £31.026 million. The Capital Fund is currently projected to peak in 2025/26 at approximately £38.799 million, before, on the basis of the approved Council Tax strategy, gradually reducing until being fully utilised in 2061/62. Service Virements 10.5 To ensure that the 2024/25 Management Revenue Budget continues to reflect current Service needs and operational requirements there are several virements that are reflected in Appendix 1 (column 5) that have been processed in line with the Scheme of Administration. 11. 2024/25 MOVEMENTS IN RESERVES 11.1 Included at Appendix 6 is an update on the Council’s General Fund Reserves. The appendix includes the following: • Earmarked and unearmarked Reserves at 31 March 2024 (per unaudited Annual Accounts). • previously approved contributions to and from earmarked Reserves in 2024/25. 2025/26 and 2026/27. • The impact of proposals within this report on earmarked Reserves. • The impact of the latest revenue monitoring on the level of unearmarked Reserves. 11.2 The earmarked Reserves are brigaded under three headings as follows: i. Balances held under statute / regulation – these earmarked Reserves are prescribed under legislation and the Council has limited discretion in how they are applied. ii. Balances held for specific (previously approved) purposes – the purpose of these earmarked Reserves has been previously approved by Council in either the Reserves Strategy or Annual Accounts iii. Balances held for other purposes – the creation of these earmarked Reserves has been approved by Council, but not specific proposals. 11.3 Going forward proposals involving earmarked Reserves under i. and ii. above will be advised to Committee in summary as Council either has limited discretion or previously approved their application. Proposals to apply earmarked Reserves under iii. above will include more detail for elected member consideration. Page 22 of 128
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Balances Held Under Statute / Regulation 11.4 Approval is sought to draw down resources of £383,000 from the Council Tax Income for Affordable Housing earmarked Reserve. This will support the delivery of the Empty Homes Initiative with the payment of grants and contributions to new builds that will bring more properties back into use. 11.5 ACTION: The Committee is asked to approve the transfer of £383,000 from the Council Tax Income for Affordable Housing earmarked Reserve to Housing & Communities. This adjustment is reflected in Appendix 1 (Column 5) to the report. Balances Held for Specific (Previously Approved) Purposes 11.6 These earmarked Reserves have previously been approved by elected members in their consideration of the Reserves Strategy or Annual Accounts. 11.7 The drawdown of the resources from the Feasibility and Project Feasibility Fund earmarked Reserves as set out below will provide capacity to take forward economic development projects in the current financial year. • Feasibility – £100,000 • Project Feasibility Fund – £62,000 11.8 ACTION: The Committee is asked to approve the transfer of £162,000 from the Feasibility and Project Feasibility Fund earmarked Reserves to Economy, Development & Planning. This adjustment is reflected in Appendix 1 (Column 5) to the report. 11.9 In addition, in setting the 2024/25 Revenue Budget in February 2024, the Council Approved Expenditure to fund several specific initiatives. For a variety of reasons including consultation and capacity issues, there has been slippage in the delivery of a few of these projects that may result in the expenditure not being incurred in the current financial year. Projects totalling £103,000 are set out at Appendix 7. 11.10 Should the Committee confirm that that the projects remain a priority for the Council then the balances set out in Appendix 7 will be transferred to an earmarked Reserve to ensure that the funding is in place to ensure delivery. The final outturn for individual projects may change before the end of the financial year, therefore, by agreeing the projects within Appendix 7, the Committee is confirming that the initiative remains a priority and that the final under spend will be earmarked within Reserves. 11.11 Should any of the projects no longer be a priority, the projected under spend would be available to support the financial management of the Council in both current and future financial years. 11.12 ACTION: The Committee is asked to confirm that the projects listed in Appendix 7 remain a priority and that the final under spends, currently projected at £103,000 are transferred to an earmarked Reserve to ensure delivery. These adjustments are reflected in Appendix 1 (Column 6) to the report. Page 23 of 128
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Perth and Kinross Health & Social Care Partnership 11.13 Funding of £190,000 has been requested by Perth & Kinross Integration Joint Board to provide focussed care and support for those people most at risk of deconditioning leading to hospital or residential admission. 11.14 ACTION: The Committee is asked to approve the transfer of £190,000 from unearmarked Reserves to the Health & Social Care Partnership. This adjustment is reflected in Appendix 1 (Column 5) to the report. Contribution to Insurance Fund 11.15 The Council’s Insurance Fund has been under pressure in recent years due to the increasing cost of annual premiums and several high value claims which has resulted in the balance on the Fund reducing. Approval is therefore sought for an in-year transfer of £200,000 from the General Fund (unearmarked Reserves) to ensure the sustainability of the Insurance Fund. This position will be kept under review and a further pressure may be introduced for the 2025/26 Revenue Budget in February 2025. 11.16 ACTION: The Committee is asked to approve the transfer of £200,000 from unearmarked Reserves to the Insurance Fund. This adjustment is reflected in Appendix 1 (Column 5) to the report. 12. FINANCIAL RISKS 12.1 In preparing the Council's 2024/25 revenue monitoring, officers have considered the key strategic, operational and financial risks facing the Council over this period. Whilst the risks may be managed in the current financial year, there is the potential for there to be an impact in the future. 12.2 To alleviate the impact these risks may have if they occur, a number of general risk mitigation factors are utilised by the Council which include detailed budget monitoring carried out by Services and having general fund balances available to meet unforeseen expenditure. 12.3 Going forward, new risks will be captured within the body of the report with a summary being maintained in Appendix 8. Perth and Kinross Health & Social Care Partnership 12.4 Perth and Kinross Health & Social Care Partnership continues to experience significant financial challenges. Work is ongoing by the Partnership to mitigate these but there is a risk that the Council may be required to provide additional funding in both the current and future financial years. Funding Towards Pay Awards 12.5 The Council has been allocated £2.099 million towards the 2024/25 non- teaching pay awards. Until the pay awards are applied, it is not possible to confirm whether this will meet the additional cost. This will be updated in the next monitoring report to Committee in February 2025. Page 24 of 128
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13. CONCLUSION 13.1 Based on the August 2024 ledger, a projected over spend of £885,000 has been identified in the current financial year. 13.2 This level of projected over spend will result in a reduction in the level of unearmarked Reserves to £15.106 million or 3.2% (see Appendix 6). 13.3 The financial position of the Council and its partners including the Health & Social Care Partnership and the ALEOs remains challenging and regular updates will be provided to the Council and the Finance & Resources Committee as the position develops. APPROVED Name Designation Date Scott Walker Chief Finance Officer 12 November 2024 Page 25 of 128
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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 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. Page 26 of 128
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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 must 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 Strategic Leadership Team have been consulted in the preparation of this report. Page 27 of 128
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2. BACKGROUND PAPERS 2.1 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 1 – 2024/25 Management Budget • Appendix 2 – General Fund 2024/25 Projected Outturn – Service Analysis • Appendix 3 – Perth & Kinross IJB 2024/25 outturn • Appendix 4 – Housing Revenue Account 2024/25 Projected Outturn • Appendix 5 – Other Fundings • Appendix 6 – General Fund Balances • Appendix 7 – Council Approved Projects 2024/25 • Appendix 8 – Financial Risks Page 28 of 128
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(1) (2) (3) (4) (5) (6) (7) (8) (9) 2024/25 Previously Movements Virements Movements 2024/25 Projected Variance Variance Council Approved in in Revised Outturn to to Approved Adjustments Funding Reserves Mgt Revised Revised Budget (Net) Budget Mgt Mgt Budget Budget £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 % SECTION 1 Service Budgets Education & Learning 166,774 (1,663) 59 (30) 165,140 166,304 1,164 0.7% Children, Families & Justice 25,284 1,248 412 (15) 26,929 26,929 0 0.0% Economy, Development & Planning 13,925 3,456 72 40 162 17,655 17,715 60 0.3% Environment & Infrastructure 34,642 371 18 35,031 34,501 (530) (1.5%) Housing & Communities 17,878 2,637 140 280 20,935 20,840 (95) (0.5%) Property Services 65,471 992 48 66,511 67,160 649 1.0% Legal & Governance 4,381 297 (45) 4,633 4,711 78 1.7% Customer & Digital Services 10,302 1,470 (9) 11,763 11,852 89 0.8% Strategic Planning, People & Performance 5,948 1,138 (692) 6,394 6,332 (62) (1.0%) Projects & Programmes 131 178 555 864 864 0 0.0% Finance & Business Support 8,227 551 (10) 8,768 8,324 (444) (5.1%) Directorate Core Costs 1,003 64 1,067 1,087 20 1.9% Sub - Total: Service Budgets 353,966 10,739 543 0 442 365,690 366,619 929 0.3% SECTION 2 Corporate Budgets Health & Social Care 87,498 8,004 190 95,692 95,692 0 0.0% Contribution to Valuation Joint Board 1,466 1,466 1,466 0 0.0% Capital Financing Costs 16,628 1,864 (18) 18,474 18,474 0 0.0% Interest on Revenue Balances (5,411) (68) (406) (5,885) (5,885) 0 0.0% Net Contribution to/(from) Capital Fund 6,710 (1,796) 424 5,338 5,338 0 0.0% Contribution to/(from) Insurance Fund 200 200 400 400 0 0.0% Trading Operations Surplus (550) (550) (550) 0 0.0% Support Service External Income (2,238) 405 (1,833) (1,833) 0 0.0% Tayside Pension Fund 1,655 1,655 1,711 56 3.4% Apprenticeship Levy 956 956 956 0 0.0% Pay Award 0 2,099 2,099 2,099 0 0.0% Leadership and procurement targets (1,505) (1,505) (1,505) 0 0.0% Council Tax Reduction Scheme 7,400 7,400 7,550 150 2.0% Discretionary Relief 1,104 1,104 1,104 0 0.0% Net Expenditure (General Fund) 467,879 19,148 2,642 0 832 490,501 491,636 1,135 0.2% SECTION 3 Funding Revenue Support Grant (275,985) (5,308) (2,642) (283,935) (283,935) 0 0.0% Ring Fenced Grant (3,806) (3,806) (3,806) 0 0.0% Non Domestic Rate Income (65,152) (203) (65,355) (65,355) 0 0.0% Council Tax Income (107,517) (107,517) (107,767) (250) (0.2%) Capital Grant (1,600) (139) (1,739) (1,739) 0 0.0% Total Financing (454,060) (5,650) (2,642) 0 0 (462,352) (462,602) (250) (0.1%) Financed from/(returned to) Reserves 13,819 13,498 0 0 832 28,149 29,034 885 PERTH & KINROSS COUNCIL GENERAL FUND 2024/25 REVENUE BUDGET - SUMMARY APPENDIX 1 5 Page 29 of 128
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APPENDIX 2 PERTH & KINROSS COUNCIL - GENERAL FUND 2024/25 PROJECTED OUTTURN - SERVICE ANALYSIS (Based on Expenditure to 31 August 2024) Variance Variance £'000 £'000 EDUCATION & LEARNING Total 1,164 NON DEVOLVED Education & Learning Core (5) Staff slippage over and above budgeted target due to delay in filling post. Nursery Sector (677) Projected additional slippage due to turnover of staff and lower than anticipated staffing required for deferred places. Primary Sector 1,328 Slippage target currently not being met within primary sector partly due to Scottish Government directive of maintaining teacher numbers and the requirement to have a teacher in front of class at all times. Secondary Sector 80 Projected over spend due to slippage target currently not being met and increased loan charges. Special Sector (312) Additional slippage due to turnover of staff and challenges in recruitment of posts, particularly Pupil Support Assistants. 330 Projected over spend on Independent Special Schools placements due to increased number of placements. Home to School Transport 420 Projected over spend on Home to School transport due to increased costs following ASN placements and contract changes. DEVOLVED SCHOOL MANAGEMENT SCHEME (DSM) 0 The projected position for DSM is on budget at this time. Schools are finding slippage targets and increasing costs challenging to manage. This has been impacted by the Scottish Government freeze on teacher numbers and per capita budgets allocations have not increased since a 25% reduction was agreed in 2016/17. Inflation has risen by 37% in the same period. PUPIL EQUITY FUND 100 At this time £100,000 is projected to be carried forward into 2025/26 for teacher and support staff costs to the end of the current academic year. (100) Projected carry forward of Pupil Equity Funding. CHILDREN, FAMILIES & JUSTICE Total 0 Children & Families 87 Projected over spend on staffing due to not meeting slippage target offset by additional income for Children Alone Seeking Asylum placements and Wellbank. (395) Projected under spend on foster, kinship and adoption in part due to reduction external in foster carers. 308 Projected over spend on residential placements due to additional placements in excess of budget . ECONOMY, DEVELOPMENT & PLANNING Total 60 Service Wide (100) Projected slippage across Economy, Development & Planning in excess of budgeted target. Business & Investment 70 Perth Harbour - projected increase in operating costs /shortfall in income. Tourism, Culture & Place 150 Savings delayed due to the ongoing review of our cultural and leisure ALEOs. Development Management & Building Standards 40 Projected over spend on legal costs associated with planning appeals. (100) Projected additional planning & building warrant income based on income trend to date. ENVIRONMENT & INFRASTRUCTURE Total (530) Service Wide (250) Projected slippage across Environment & Infrastructure in excess of budgeted target. Traffic & Network (50) Projected additional income from statutory road network works. Direct Services - Waste Disposal (150) Projected saving on the waste disposal contract as a result of the new twin-streaming collection. (200) Projected additional income from sale of recyclates as a result of the new twin-streaming collection. Direct Services - Fleet 120 Projected additional cost of vehicle materials and repairs. SERVICE Summary of Service Variances 5 Page 31 of 128
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APPENDIX 2 PERTH & KINROSS COUNCIL - GENERAL FUND 2024/25 PROJECTED OUTTURN - SERVICE ANALYSIS (Based on Expenditure to 31 August 2024) Variance Variance £'000 £'000SERVICE Summary of Service Variances HOUSING & COMMUNITIES Total (95) Service Wide (150) Projected slippage across Housing & Communities in excess of budgeted target. Housing General Fund 5 Void rent loss for housing support properties. 35 Projected increase in homeless costs including bad debts and energy costs. Bereavement Services 15 Projected over spend on loan charges. PROPERTY SERVICES Total 649 Service Wide 90 Projected shortfall against slippage target 309 Projected shortfall due to delays in delivering the Pullar House saving partially offset by an under spend on water. 1 Projected various under / over spends on supplies & services, third party payments and capital financing costs. (72) Projected additional income from capital recharges (£65,000) & commercial lets (£82,000) partially offset against a shortfall in RHI Income (£75,000). Energy (239) Projected reduction in energy costs due to reduced rates and consumption. Maintenance 150 Projected increase in costs associated with the transfer of Bell's Sports Centre. Facilities Management 240 Delay in implementing new cleaning schedule required to achieve £406,000 Tayside Contract approved saving. This was due to the requirement to consult with trade unions. Implemented reduced cleaning days for schools from August 2024. Catering 170 Increased uptake on meals projected at an additional 64,000 by year end. This includes a 10% uplift in nursery meals (total meals projected 2.1 million for full year). This equates to approximately £120,000 shortfall based on the average price of £4.36 per meal (was previously £4.74) against the cost charged to the pupil of £2.25 for a Primary meal & £2.60 for a secondary meal. The additional variance is the increased uptake of free school meals. LEGAL & GOVERNANCE Total 78 195 Projected shortfall against slippage 3 Projected under spend on supplies & services (120) Projected additional income across Legal & Governance CUSTOMER & DIGITAL Total 89 IT 69 Projected over spend on staff costs Revenues & Benefits (150) Projected under spend on staff costs 67 Projected over spend on supplies & services including printing & interpreter services (75) Projected additional statutory additions income 178 Projected shortfall due to increased Service Charges from Social Housing Providers that are not covered by Housing Benefit Subsidy STRATEGIC PLANNING, PEOPLE & PERFORMANCE Total (62) (62) Projected net under spend on staff costs, supplies & services and income. PROJECTS & PROGRAMMES Total 0 0 No material variances at present FINANCE & BUSINESS SUPPORT Finance Total (444) 4 Projected net overspend on staff costs, supplies & services and income. Business Support (448) Projected under spend on staff costs due to non-filling of vacancies in advance of delivering 2025/26 approved savings. DIRECTORATE CORE COSTS Total 20 20 Projected over spend on contribution to Tayside Valuation Joint Board TOTAL 929 Page 32 of 128
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APPENDIX 3 Perth & Kinross Integration Joint Board (IJB) Projected outturn based on Revenue Monitoring to 31 July 2024 Social Care Health Health & Social Care Partnership £'000 £'000 £'000 DEVOLVED FUNCTIONS Older People Services 1,814 1,176 2,990 Adult Services 1,032 (413) 619 Other Community Services (63) 0 (63) Management/Commissioned/Other (147) (104) (251) Undelivered Savings 128 41 169 Budget Deficit 2,097 0 2,097 Sub Total - Hospital & Community Health 4,861 700 5,561 P&K IJB Lead Partner 0 (704) (704) Dundee & Angus Hosted Services Recharges In/Out 0 1,360 1,360 Sub Total - Lead Partner Arrangement 0 656 656 GP Prescribing / Other Family Health Services 0 1,753 1,753 General Medical Services / Family Health Services 0 0 0 Sub Total - PKHSCP 4,861 3,109 7,970 Approved Use of General Reserves in 2024/25 (1,286) (158) (1,444) Approved Earmarked Reserves & Other 2024/25 Non-Recurring Funding (800) (884) (1,684) Application of Remaining General Reserves (2,775) (430) (3,205) Financial Recovery Measures Cost Control & Reduction - Accelerating Efficiency Improvements 0 (270) (270) Vacancy Control 0 (230) (230) Earmarked Reserves 0 (450) (450) Out of Hours 0 (350) (350) Total Projected Outturn Perth & Kinross HSCP 0 337 337 Projected Out-turn Over / (Under) Spend 5 Page 33 of 128
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APPENDIX 4 PERTH & KINROSS COUNCIL - HOUSING REVENUE ACCOUNT 2024/25 PROJECTED OUTTURN (Based on expenditure to 31 August 2024) £'000 93 Housing Repairs Projected over spend on energy costs (£40,000) and transport costs (£53,000). 25 Improvements Additional cost of Energy Performance Certificates contract . 113 Letham, North & South Projected increase in costs arising from garden maintenance contract. (100) Administration Projected slippage across HRA in excess of slippage target. (250) Income Projected increased income for Interest on Revenue Balances. 119 Capital Financed from Current Revenue As a result of the projected net under spends highlighted above, this is the increase in the amount available to invest in the HRA capital programme from the Revenue Budget. 0 Summary of Service Variances 5 Page 35 of 128
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APPENDIX 5 Other Grant Funding Education & Learning Scottish Government – Education Maintenance Allowance 2024/25 £211,585 Strategic Planning, People & Performance Scottish Government – Fairer Futures Partnership £133,000 Scottish Government – Community Mental Health £427,000 TOTAL £771,585 5 Page 37 of 128
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Appendix 6 General Fund Reserves Update Proposals Included in Report Proposals Included in Report Commit- ments Balance 31/3/24 24/25 25/26 26/27 24/25 Future £m £m £m £m £m £m £m £m General Fund Balance 83.793 Balances Held Under Statute / Regulation - Revenue Grants (17.337) 7.932 (9.405) - Council Tax Income for affordable housing (5.609) 0.205 (0.283) (0.283) 0.383 (5.587) - Developers Contributions: Affordable Housing (5.237) (5.237) - Car Parking (1.532) 0.120 0.030 (1.382) - Developers Contributions: Commuted Sums (1.218) (1.218) - Service Concessions (17.262) 7.000 10.262 0.000 - Devolved School Management (0.501) 0.501 0.000 Sub total (48.696) 15.758 (0.283) (0.283) 0.383 0.000 10.292 (22.829) Balances Held for Specific (Previously Approved) Purposes - Council Approved Expenditure (1.635) 1.186 (0.103) 0.232 (0.320) - Feasibility 0.000 (0.100) (0.100) (0.100) 0.100 (0.200) - Culture (0.857) 0.561 0.025 (0.271) - School Estate (2.164) 1.902 (0.262) - Works Maintenance (0.200) (0.200) - Community Resilience (0.175) 0.039 (0.136) - Climate Change (0.205) 0.110 (0.095) - Financial Assistance (Mod) (0.020) (0.020) (0.020) (0.020) (0.080) - Project Feasibility Fund (Covid-19) (0.081) 0.062 (0.019) - Modern Apprentice Scheme (0.367) 0.340 0.027 0.000 - Cemetery Walls (0.262) 0.150 0.076 0.036 0.000 - Salix (0.102) 0.102 0.000 - Local Area Partnerships (0.046) 0.046 0.000 - Community Investment Fund (0.087) 0.087 0.000 - Local Government Elections (0.053) (0.053) (0.053) (0.053) 0.212 0.000 Approved Contributions from / (to) Reserves 5 Page 39 of 128
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Appendix 6 General Fund Reserves Update Proposals Included in Report Proposals Included in Report Commit- ments Balance 31/3/24 24/25 25/26 26/27 24/25 Future £m £m £m £m £m £m £m £m Approved Contributions from / (to) Reserves - PH20 (0.062) 0.062 0.000 - Working Smarter (Covid-19) (0.115) 0.115 0.000 - School Counsellors (0.329) 0.227 0.102 0.000 - Ventilation Measures (0.076) 0.076 0.000 - Services for Children, Young People & Families (0.281) 0.281 0.000 Sub total (7.117) 4.837 0.005 (0.173) 0.059 0.000 0.806 (1.583) Balances Held for Other Purposes 0.000 - Transformation & Workforce Management (7.606) 3.491 0.060 0.171 (3.884) - Anti - Poverty (1.664) 1.075 0.235 (0.354) Sub total (9.270) 4.566 0.295 0.000 0.000 0.000 0.171 (4.238) Earmarked Reserves (65.083) 25.161 0.017 (0.456) 0.442 0.000 11.269 (28.650) Uncommitted General Fund Balance 18.710 Use of unearmarked Reserves in setting Budgets (2.249) (25/26 £(0.503m); 26/27 £2.476m Impact of Current Year Projected Outturn (0.885) Impact of Current Year Decisions (0.080) Impact of proposals within this report (0.390) Updated Uncommitted General Fund Balance 15.106 Percentage of Net Revenue Budget 3.2% Page 40 of 128
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APPENDIX 7 Council Approved Projects - 2024/25 Housing & Communities Legion Park, Comrie £50,000 Loch Leven Heritage Trail £53,000 Total £103,000 5 Page 41 of 128
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Appendix 8 FINANCIAL RISKS Risk to Revenue Budget Mitigation 1 Achievement of staff slippage targets, particularly relating to teacher numbers and impact on pupil / teacher ratio - Proactive workforce management - Revenue monitoring - Future budget submissions 2 Ceasing of additional Financial Insecurity Funding on 31 March 2025. - Proactive management - Revenue monitoring - Future budget submissions 3 Current year pay awards - Revenue monitoring - Future budget submissions 4 Support for Tayside Contracts - Tayside Contracts Governance & Strategy Group - Revenue monitoring - Future budget submissions 5 Funding - Pupil Teacher Ratio - Liason with COSLA 6 Funding to Health & Social Care - Proactive management - Revenue monitoring - Future budget submissions 5 Page 43 of 128
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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). 6 Page 45 of 128
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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. Page 46 of 128
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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. Page 47 of 128
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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 Page 48 of 128
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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: Page 49 of 128
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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. Page 50 of 128
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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. Page 51 of 128
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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. Page 52 of 128
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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 Page 53 of 128
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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. Page 54 of 128
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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. Page 55 of 128
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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 Page 56 of 128
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PERTH AND KINROSS COUNCIL COMPOSITE CAPITAL PROGRAMME Estimated Capital Resources 2024/25 to 2029/30 APPENDIX I Capital Capital Capital Capital Capital Capital Capital Resources Resources Resources Resources Resources Resources Resources 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 TOTAL (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) Revised Revised Revised Revised Revised Revised Revised Budget Budget Budget Budget Budget Budget Budget Capital Grants Recycling Improvement Fund 98 0 0 0 0 0 98 General Capital Grant 27,103 13,239 19,255 12,750 12,750 12,750 97,847 Total Capital Grants 27,201 13,239 19,255 12,750 12,750 12,750 97,945 General Capital Receipts General Fund - Capital Receipts 413 507 0 0 0 0 920 General Fund - Ring Fenced Receipts 589 352 902 1,047 950 980 4,820 Total General Capital Receipts 1,002 859 902 1,047 950 980 5,740 Commercial Property Receipts Capital Receipts brought-forward 2,102 1,120 1,550 1,550 2,638 2,638 2,102 Commercial Property Capital Receipts 713 430 0 1,088 0 0 2,231 Capital Receipts carried-forward (1,120) (1,550) (1,550) (2,638) (2,638) (2,638) (2,638) Total Commercial Property Receipts Applied 1,695 0 0 0 0 0 1,695 Contributions Tay Cities Deal (69) 550 505 3,945 500 956 6,387 Developer Contributions 3,707 2,367 2,600 2,600 2,500 2,500 16,274 Other Third Party Contributions 1,184 0 2,000 3,000 1,000 1,000 8,184 Revenue Budget Contributions 48 124 124 124 0 0 420 Total Contributions 4,870 3,041 5,229 9,669 4,000 4,456 31,265 Capital Borrowing Requirement 135,515 97,038 111,299 61,496 48,087 29,592 483,027 TOTAL CAPITAL RESOURCES/ GROSS BUDGET EXPENDITURE 170,283 114,177 136,685 84,962 65,787 47,778 619,672 6 Page 57 of 128
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PERTH AND KINROSS COUNCIL COMPOSITE CAPITAL PROGRAMME Estimated Capital Resources 2024/25 to 2029/30 APPENDIX I Movements in Resources from Approved Budget - 18 september 2024 Revised Revised Revised Revised Revised Revised Revised Budget Budget Budget Budget Budget Budget Budget 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 TOTAL £'000 £'000 £'000 £'000 £'000 £'000 £'000 Increase/(Decrease) in: Capital Receipts - General Fund (63) 63 0 0 0 0 0 Capital Receipts - Commercial Property 0 0 0 0 0 0 0 Capital Receipts - Ring Fenced 0 0 0 0 0 0 0 Capital Grants: Recycling Improvement Fund (288) 0 0 0 0 0 (288) General Capital Grant 2,326 0 0 0 0 0 2,326 Tay Cities Deal (1,019) 0 0 999 0 0 (20) Third Party Contributions 183 0 0 0 0 0 183 Revenue Contributions (52) 0 0 124 0 0 72 Developer Contributions 0 0 0 0 0 0 0 Resources b/f 0 0 0 0 0 0 0 Resources c/f to future years 0 0 0 0 0 0 0 Borrowing Requirement (5,803) 813 2,578 (1,051) 1,690 0 (1,773) Total Increase/(Decrease) in Resources (4,716) 876 2,578 72 1,690 0 500 Approved Resources 18 September 2024 174,999 113,301 134,107 84,890 64,097 47,778 619,172 Revised Resources 170,283 114,177 136,685 84,962 65,787 47,778 619,672 Page 58 of 128
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PERTH AND KINROSS COUNCIL COMPOSITE CAPITAL PROGRAMME SUMMARY OF CAPITAL RESOURCES AND EXPENDITURE 2024/25 to 2029/30 APPENDIX II Approved Proposed Revised Actuals Projected Approved Proposed Revised Approved Proposed Revised Budget Budget Budget to Outturn Budget Budget Budget Budget Budget Budget 18-Sep-24 Adjustment 30-Sep-24 18-Sep-24 Adjustment 18-Sep-24 Adjustment Report 1 Report 2 Report 2 Report 2 Report 2 Report 2 Report 2 2024/25 2024/25 2024/25 2024/25 2024/25 2025/26 2025/26 2025/26 2026/27 2026/27 2026/27 (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) ENVIRONMENT & INFRASTRUCTURE 37,485 (298) 37,187 12,053 37,187 37,571 289 37,860 39,706 (1,619) 38,087 HOUSING & COMMUNITIES 2,852 (1,023) 1,829 193 1,829 3,230 779 4,009 1,273 220 1,493 ECONOMY, DEVELOPMENT & PLANNING 54,439 (2,599) 51,840 18,983 51,840 11,537 0 11,537 29,245 3,598 32,843 PROPERTY SERVICES 68,197 0 68,197 31,623 68,197 52,101 0 52,101 53,817 376 54,193 CUSTOMER & DIGITAL SERVICES 8,038 380 8,418 2,119 8,418 6,187 (192) 5,995 5,145 3 5,148 HEALTH & SOCIAL CARE 962 0 962 274 962 1,649 0 1,649 1,390 0 1,390 TOTAL NET EXPENDITURE 171,973 (3,540) 168,433 65,245 168,433 112,275 876 113,151 130,576 2,578 133,154 (NET OF GRANTS, REVENUE AND 3RD PARTY CONTRIBUTIONS, AND RING FENCED RECEIPTS) GENERAL CAPITAL GRANT (24,777) (2,326) (27,103) (13,697) (27,103) (13,239) 0 (13,239) (19,255) 0 (19,255) DEVELOPER CONTRIBUTIONS (3,707) 0 (3,707) 0 (3,707) (2,367) 0 (2,367) (2,600) 0 (2,600) CAPITAL RECEIPTS (1,189) 63 (1,126) (380) (1,126) (874) (63) (937) 0 0 0 ANNUAL BORROWING REQUIREMENT 142,300 (5,803) 136,497 51,168 136,497 95,795 813 96,608 108,721 2,578 111,299 CAPITAL RECEIPTS BROUGHT FORWARD (2,102) 0 (2,102) (2,102) (2,102) (1,120) 0 (1,120) (1,550) 0 (1,550) CAPITAL RECEIPTS CARRIED FORWARD 1,120 0 1,120 358 1,120 1,550 0 1,550 1,550 0 1,550 TOTAL NET BORROWING REQUIREMENT 141,318 (5,803) 135,515 49,424 135,515 96,225 813 97,038 108,721 2,578 111,299 6 Page 59 of 128
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PERTH AND KINROSS COUNCIL COMPOSITE CAPITAL PROGRAMME SUMMARY OF CAPITAL RESOURCES AND EXPENDITURE 2024/25 to 2029/30 APPENDIX II ENVIRONMENT & INFRASTRUCTURE HOUSING & COMMUNITIES ECONOMY, DEVELOPMENT & PLANNING PROPERTY SERVICES CUSTOMER & DIGITAL SERVICES HEALTH & SOCIAL CARE TOTAL NET EXPENDITURE (NET OF GRANTS, REVENUE AND 3RD PARTY CONTRIBUTIONS, AND RING FENCED RECEIPTS) GENERAL CAPITAL GRANT DEVELOPER CONTRIBUTIONS CAPITAL RECEIPTS ANNUAL BORROWING REQUIREMENT CAPITAL RECEIPTS BROUGHT FORWARD CAPITAL RECEIPTS CARRIED FORWARD TOTAL NET BORROWING REQUIREMENT Approved Proposed Revised Approved Proposed Revised Approved Proposed Revised Revised Budget Budget Budget Budget Budget Budget Budget Budget Budget Budget 18-Sep-24 Adjustment 18-Sep-24 Adjustment 18-Sep-24 Adjustment Report 2 Report 2 Report 2 Report 2 Report 2 Report 2 Report 2 2027/28 2027/28 2027/28 2028/29 2028/29 2028/29 2029/30 2029/30 2029/30 (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) 20,755 0 20,755 17,475 1,690 19,165 17,297 0 17,297 170,351 1,419 139 1,558 1,500 0 1,500 1,500 0 1,500 11,889 (4,863) (999) (5,862) (2,150) 0 (2,150) (2,636) 0 (2,636) 85,572 48,867 0 48,867 35,000 0 35,000 22,500 0 22,500 280,858 10,413 (191) 10,222 8,502 0 8,502 5,911 0 5,911 44,196 1,306 0 1,306 1,320 0 1,320 270 0 270 6,897 77,897 (1,051) 76,846 61,647 1,690 63,337 44,842 0 44,842 599,763 (12,750) 0 (12,750) (12,750) 0 (12,750) (12,750) 0 (12,750) (97,847) (2,600) 0 (2,600) (2,500) 0 (2,500) (2,500) 0 (2,500) (16,274) (1,088) 0 (1,088) 0 0 0 0 0 0 (3,151) 61,459 (1,051) 60,408 46,397 1,690 48,087 29,592 0 29,592 482,491 (1,550) 0 (1,550) (2,638) 0 (2,638) (2,638) 0 (2,638) (2,102) 2,638 0 2,638 2,638 0 2,638 2,638 0 2,638 2,638 62,547 (1,051) 61,496 46,397 1,690 48,087 29,592 0 29,592 483,027 Page 60 of 128
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PERTH AND KINROSS COUNCIL COMPOSITE CAPITAL PROGRAMME SUMMARY OF CAPITAL RESOURCES AND EXPENDITURE 2024/25 to 2029/30 APPENDIX II Revised Proposed Revised Actual Projected Revised Revised Revised Revised Revised Revised Budget Budget Budget to Outturn Budget Budget Budget Budget Budget Budget 18-Sep-24 Adjustment 30-Sep-24 Report 1 Report 2 Report 2 Report 2 Report 2 Report 2 Report 2 Report 2 Report 2 2024/25 2024/25 2024/25 2024/25 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 TOTAL (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) ENVIRONMENT & INFRASTRUCTURE Traffic & Road Safety Road Safety Initiatives (20mph Zones etc..) 335 335 13 335 362 362 361 400 400 2,220 Road Safety Initiatives - A94 Safety Improvements 84 84 84 0 0 0 0 0 84 Active Travel Grant -Traffic & Road Safety Schemes 739 739 212 739 600 600 600 600 600 3,739 Additional Road Safety - Pedestrian Crossings 153 (93) 60 60 246 153 0 0 0 459 Schools Road Safety Measures 122 122 26 122 0 0 0 0 0 122 20mph Signage Programme - Schools 128 128 83 128 0 0 0 0 0 128 20mph Signage Programme 39 39 20 39 0 0 0 0 0 39 Car Parking Investment - Pitlochry 205 205 94 205 0 0 0 0 0 205 Revenue Contribution (55) (55) (55) 0 0 0 0 0 (55) Sub-Total 1,750 (93) 1,657 457 1,657 1,208 1,115 961 1,000 1,000 6,941 Asset Management - Roads & Lighting Structural Maintenance 10,911 10,911 6,863 10,911 9,298 9,506 7,300 9,800 9,800 56,615 Traffic Signal Renewals - Upgrading 173 173 12 173 100 100 100 100 100 673 Footways 415 415 388 415 390 390 393 410 410 2,408 Street Lighting 0 0 0 0 0 0 600 600 1,200 Investment in Local Footpaths 0 0 0 20 100 0 0 0 120 Road Safety Barriers 22 22 22 0 0 0 0 0 22 Sub-Total 11,521 0 11,521 7,263 11,521 9,808 10,096 7,793 10,910 10,910 61,038 Asset Management - Bridges Bridge Refurbishment Programme 1,453 (220) 1,233 288 1,233 2,778 2,520 3,201 2,000 2,000 13,732 Vehicular Bridge Parapets Programme - Assess & Upgrade 34 (33) 1 1 33 0 0 0 0 34 Old Perth Bridge - Strengthening 125 30 155 19 155 2,380 0 0 0 0 2,535 Perth Queens Bridge - Strengthening 85 (26) 59 43 59 118 2,179 0 0 0 2,356 Garry Viaduct 372 372 7 372 255 255 1,790 1,690 0 4,362 Culteuchar Culvert 8 8 13 8 0 0 0 0 0 8 Sub-Total 2,077 (249) 1,828 370 1,828 5,564 4,954 4,991 3,690 2,000 23,027 Improvement Schemes A977 Upgrades 1 1 1 177 0 0 0 0 178 Brioch Road, Crieff - Road Realignment & Safety Measures 18 (18) 0 0 18 0 0 0 0 18 Sub-Total 19 (18) 1 0 1 195 0 0 0 0 196 Rural Flood Protection Schemes Perth Flood Protection Scheme (South Inch Culvert Reinstatement) 259 259 49 259 0 0 0 0 0 259 Comrie Flood Protection Scheme 10,475 10,475 403 10,475 15,420 9,609 0 0 0 35,504 Milnathort Flood Protection Scheme 256 256 1 256 83 0 0 0 0 339 South Kinross Flood Protection Scheme 418 418 54 418 1,783 8,823 3,150 75 0 14,249 Scone Flood Protection Scheme 50 50 1 50 69 68 535 45 0 767 Flood Mitigation Measures - Dunkeld and Craigie Burn 8 8 5 8 72 48 180 375 317 1,000 Coastal Change Adaptation 100 100 100 0 0 0 0 0 100 Sub-Total 11,566 0 11,566 513 11,566 17,427 18,548 3,865 495 317 52,218 Climate Change Nature Restoration 232 232 17 232 0 0 0 0 0 232 Sub-Total 232 0 232 17 232 0 0 0 0 0 232 Waste Strategy Recycling Improvement Fund 386 (184) 202 202 202 0 0 0 0 0 202 Scottish Government Grant (386) 288 (98) (98) (98) 0 0 0 0 0 (98) Sub-Total 0 104 104 104 104 0 0 0 0 0 104 Prudential Borrowing Projects Wheeled Bin Replacement Programme - Domestic Bins 267 267 109 267 200 200 200 220 220 1,307 Wheeled Bin Replacement Programme - Commercial Bins 86 (29) 57 57 20 20 20 25 25 167 Recycling Containers, Oil Banks & Battery Banks Replacement Program 222 (13) 209 96 209 105 105 105 70 70 664 Capital Receipts - Disposals (2) (2) (2) (2) 0 0 0 0 0 (2) Litter Bins 50 50 8 50 50 50 50 55 55 310 Vehicle Replacement Programme 9,271 9,271 2,926 9,271 2,800 2,800 2,500 3,000 3,000 23,371 Capital Receipts - Vehicle Disposals (587) (587) (176) (587) (352) (352) (322) (300) (300) (2,213) Street Lighting Renewal - LED & Column Replacement 1,013 1,013 368 1,013 835 551 592 0 0 2,991 Sub Total 10,320 (42) 10,278 3,329 10,278 3,658 3,374 3,145 3,070 3,070 26,595 TOTAL - ENVIRONMENT & INFRASTRUCTURE 37,485 (298) 37,187 12,053 37,187 37,860 38,087 20,755 19,165 17,297 170,351 HOUSING & COMMUNITIES Community Greenspace Play Areas - Improvements Implementation Strategy 989 (348) 641 14 641 872 150 150 500 500 2,813 Third Party Contribution (4) (4) (4) 0 0 0 0 0 (4) 3G Pitch, Blairgowrie 117 117 117 0 0 0 0 0 117 Settlement/Neighbourhood Parks 429 (179) 250 14 250 300 0 0 0 0 550 Third Party Contribution 0 (84) (84) (84) 0 0 0 0 0 (84) Countryside Sites 139 (139) 0 0 0 0 139 0 0 139 Community Greenspace Sites 305 (305) 0 0 654 898 894 700 700 3,846 Community Greenspace Bridges 128 69 197 30 197 0 0 0 0 0 197 Third Party Contribution (13) (13) (13) 0 0 0 0 0 (13) Revenue Contribution (11) 11 0 0 0 0 0 0 0 0 Core Path Implementation 11 99 110 110 0 0 0 0 0 110 Third Party Contribution (11) (99) (110) (110) 0 0 0 0 0 (110) Premier Parks 25 21 46 21 46 0 0 0 0 0 46 Third Party Contribution (14) (14) (10) (14) 0 0 0 0 0 (14) Kinnoull Hill 8 8 8 0 0 0 0 0 8 Cemetery Extensions 64 (51) 13 13 60 445 375 300 300 1,493 Sub-Total 2,162 (1,005) 1,157 69 1,157 1,886 1,493 1,558 1,500 1,500 9,094 Housing Projects Gypsy Travellers Site Improvement Works 185 185 1 185 0 0 0 0 0 185 Additional Gypsy Traveller Site Improvement Works 225 225 18 225 0 0 0 0 0 225 New Gypsy Traveller Site 6 6 6 1,990 0 0 0 0 1,996 Sub Total 416 0 416 19 416 1,990 0 0 0 0 2,406 Public Transport Community Transport Iniatives 199 (18) 181 105 181 18 0 0 0 0 199 Sub-Total 199 (18) 181 105 181 18 0 0 0 0 199 Prudential Borrowing Projects Community Transport Vehicles 0 0 0 115 0 0 0 0 115 Sub Total 0 0 0 0 0 115 0 0 0 0 115 Community Planning Community-Led Asset Transfers 75 75 75 0 0 0 0 0 75 Sub-Total 75 0 75 0 75 0 0 0 0 0 75 TOTAL - HOUSING & COMMUNITIES 2,852 (1,023) 1,829 193 1,829 4,009 1,493 1,558 1,500 1,500 11,889 ECONOMY, DEVELOPMENT & PLANNING Improvement Schemes A9/A85 Road Junction Improvements 212 212 212 0 0 0 0 0 212 Cross Tay Link Road (CTLR) 44,745 44,745 16,588 44,745 0 0 0 0 0 44,745 Bertha Park Link Road 686 686 554 686 400 10,000 1,808 0 0 12,894 Sub-Total 45,643 0 45,643 17,142 45,643 400 10,000 1,808 0 0 57,851 Perth & Kinross Place-making Mill Street Environmental Improvements (1) 1 0 0 0 0 0 0 0 0 Perth, Place, People 3,598 (3,598) 0 0 0 3,598 0 0 0 3,598 Perth City Centre Golden Route (Rail Station) 68 68 24 68 0 0 0 0 0 68 City Greening 31 31 31 0 0 0 0 0 31 Perth & Kinross Lighting Action Plan 1,320 1,320 52 1,320 0 0 0 0 0 1,320 Sub-Total 5,016 (3,597) 1,419 76 1,419 0 3,598 0 0 0 5,017 Page 61 of 128
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PERTH AND KINROSS COUNCIL COMPOSITE CAPITAL PROGRAMME SUMMARY OF CAPITAL RESOURCES AND EXPENDITURE 2024/25 to 2029/30 APPENDIX II Revised Proposed Revised Actual Projected Revised Revised Revised Revised Revised Revised Budget Budget Budget to Outturn Budget Budget Budget Budget Budget Budget 18-Sep-24 Adjustment 30-Sep-24 Report 1 Report 2 Report 2 Report 2 Report 2 Report 2 Report 2 Report 2 Report 2 2024/25 2024/25 2024/25 2024/25 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 TOTAL (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) Other Planning Projects Creative Exchange (former St. John's Primary School) 52 52 52 0 0 0 0 0 52 Local Full Fibre Network 21 (21) 0 0 0 0 0 0 0 0 Third Party Contribution - Tay Cities Deal (20) 20 0 (53) 0 0 0 0 0 0 0 Low Carbon Transport & Active Travel Hub - Broxden EV Chargers (74) (74) 5 (74) 0 0 0 0 0 (74) Third Party Contribution - ERDF (2) (2) (2) 0 0 0 0 0 (2) Third Party Contribution - Tay Cities Deal 69 69 69 0 0 0 0 0 69 Revenue Contribution 7 7 7 0 0 0 0 0 7 Perth Eco-Innovation Park at Perth West 780 780 780 9,737 22,300 0 0 0 32,817 Third Party Contributions - Tay Cities Deal (999) 999 0 0 (550) (505) (3,945) (500) (956) (6,456) Other Third Party Contributions 0 0 0 0 (2,000) (3,000) (1,000) (1,000) (7,000) Capital Receipts - Ring Fenced Land Disposals 0 0 0 0 (550) (725) (650) (680) (2,605) Economic Development Investment - Land & Serviced Units 1,000 1,000 1,000 1,000 0 0 0 0 2,000 Adapt Your Property - Vacant Town & City Centre Space 300 300 300 0 0 0 0 0 300 Sub-Total 1,134 998 2,132 (48) 2,132 10,187 19,245 (7,670) (2,150) (2,636) 19,108 Commercial Property Investment Programme North Muirton Industrial Estate - Site Servicing & Provision of Units 43 43 43 0 0 0 0 0 43 Broxden Business Park - Additional Infrastructure 10 (4) 6 6 0 0 0 0 0 6 Western Edge, Kinross - Site Servicing (17) (17) 17 (17) 0 0 0 0 0 (17) Broxden Drainage Mitigation Works 1,221 4 1,225 1,796 1,225 0 0 0 0 0 1,225 Third Party Contribution (Scottish Water) (919) (919) (919) 0 0 0 0 0 (919) Ruthvenfield Business Centre 1,356 1,356 1,356 0 0 0 0 0 1,356 North Muirton Drainage 2 2 2 0 0 0 0 0 2 Sub-Total 1,696 0 1,696 1,813 1,696 0 0 0 0 0 1,696 Prudential Borrowing Projects Land Purchase & Development (Hotel Development) 950 950 950 950 0 0 0 0 1,900 Sub Total 950 0 950 0 950 950 0 0 0 0 1,900 TOTAL - ECONOMY, DEVLOPMENT & PLANNING 54,439 (2,599) 51,840 18,983 51,840 11,537 32,843 (5,862) (2,150) (2,636) 85,572 PROPERTY SERVICES Project Support Investment in the Learning Estate 1,571 20 1,591 1,126 1,591 13,050 8,650 6,823 0 0 30,114 Methven Primary School Refurbishment 206 206 14 206 3,500 300 0 0 0 4,006 Kirkmichael Primary School Upgrades 25 25 25 0 0 0 0 0 25 - Rattray Primary School Upgrade Project 20 (20) 0 0 0 0 0 0 0 0 North/West Perth - New Primary School 0 0 0 341 7,672 15,400 0 0 23,413 Riverside Primary New School 483 483 321 483 0 0 0 0 0 483 Perth Academy - Refurbishment 1,699 1,699 1,480 1,699 1,650 1,650 0 0 0 4,999 Perth Grammar School - Upgrade Programme Phase 3 1,000 1,000 312 1,000 1,500 1,488 0 0 0 3,988 Perth High School - Internal Services & Refurbishment 12 12 12 0 0 0 0 0 12 Perth High School - New School Investment 40,899 40,899 16,487 40,899 6,600 3,600 0 0 0 51,099 Harris Academy/Invergowrie - Extension 591 591 21 591 0 0 0 0 0 591 Blairgowrie Recreation Centre - Replacement 15,327 15,327 9,785 15,327 1,303 0 0 0 0 16,630 Technology Upgrades 76 76 77 76 771 522 0 0 0 1,369 Sub-Total 61,909 0 61,909 29,623 61,909 28,715 23,882 22,223 0 0 136,729 Project & Contracts Free School Meal Expansion Programme 0 0 0 1,000 2,511 0 0 0 3,511 Community Campus Access Adaptations 15 15 15 10 0 0 0 0 25 Sub-Total 15 0 15 0 15 1,010 2,511 0 0 0 3,536 Property Service Manager DDA Adaptation & Alteration Works Programme 230 230 25 230 200 200 200 0 0 830 Property Compliance Works Programme 1,017 1,017 435 1,017 650 650 400 0 0 2,717 Capital Improvement Projects Programme 2,265 2,265 1,017 2,265 1,800 1,800 894 10,000 10,000 26,759 Pitlochry High School - Upgrade Programme 164 164 1 164 0 0 0 0 0 164 Friarton Depot - Waste Transfer Station 250 250 96 250 2,531 0 0 0 0 2,781 Letham Community Wellbeing Hub 133 133 133 0 0 0 0 0 133 Third Party Contribution (Letham4All) (38) (38) (38) 0 0 0 0 0 (38) PH2O 500 500 500 2,000 25,000 25,000 25,000 12,500 90,000 Perth Museum 167 167 167 0 0 0 0 0 167 Perth Art Gallery 100 100 100 2,795 0 0 0 0 2,895 Sub-Total 4,788 0 4,788 1,574 4,788 9,976 27,650 26,494 35,000 22,500 126,408 Prudential Borrowing Projects Decarbonisation 1,339 1,339 413 1,339 0 0 0 0 0 1,339 Energy Conservation & Carbon Reduction Programme 146 146 13 146 150 150 150 0 0 596 Pullar House - Purchase & Re-Purposing 0 0 0 10,000 0 0 0 0 10,000 Kinnoull Street Car Park - Purchase 0 0 0 2,250 0 0 0 0 2,250 Sub-Total 1,485 0 1,485 426 1,485 12,400 150 150 0 0 14,185 TOTAL - PROPERTY SERVICES 68,197 0 68,197 31,623 68,197 52,101 54,193 48,867 35,000 22,500 280,858 CUSTOMER & DIGITAL SERVICES ICT Infrastructure Replacement and Upgrade Programme 4,927 4,927 1,071 4,927 3,112 3,273 7,698 6,472 3,687 29,169 Data & Analytics 600 600 68 600 1,206 720 708 716 733 4,683 Supporting Digital 750 750 161 750 1,175 928 1,185 914 920 5,872 Software Licences (Revenues & Benefits) 51 51 51 51 51 49 0 0 202 School Audio-Visual (AV) Equipment Replacement Programme 196 196 211 196 35 35 35 300 471 1,072 Mosaic - Swift Social Work System Replacement 1,373 339 1,712 602 1,712 430 180 586 0 0 2,908 Revenue Contribution (41) 41 0 0 (124) (124) (124) 0 0 (372) Hardware 22 22 6 22 15 14 14 25 25 115 Licenses 80 80 80 95 71 71 75 75 467 Case Management System 80 80 80 0 0 0 0 0 80 TOTAL - CUSTOMER & DIGITAL SERVICES 8,038 380 8,418 2,119 8,418 5,995 5,148 10,222 8,502 5,911 44,196 HEALTH & SOCIAL CARE Occupational Therapy Equipment 300 300 300 250 250 150 250 200 1,400 Technology Enabled Telecare 610 610 260 610 1,088 1,087 1,087 1,000 0 4,872 Moving & Handling Office Refurbishment 0 0 0 29 0 0 0 0 29 Software Licences 52 52 14 52 53 53 69 70 70 367 Developing Supported Tenancies 0 0 0 229 0 0 0 0 229 TOTAL - HEALTH & SOCIAL CARE 962 0 962 274 962 1,649 1,390 1,306 1,320 270 6,897 TOTAL COMPOSITE NET EXPENDITURE 171,973 (3,540) 168,433 65,245 168,433 113,151 133,154 76,846 63,337 44,842 599,763 (NET OF GRANTS, REVENUE AND 3RD PARTY CONTRIBUTIONS, AND RING FENCED RECEIPTS) CAPITAL INCOME & RECEIPTS General Capital Grant - Scottish Government (24,777) (2,326) (27,103) (13,697) (27,103) (13,239) (19,255) (12,750) (12,750) (12,750) (97,847) Developer Contributions (3,707) (3,707) (3,707) (2,367) (2,600) (2,600) (2,500) (2,500) (16,274) General Fund - Capital Receipts/Disposal (476) 63 (413) (311) (413) (507) 0 0 0 0 (920) Commercial Property - Capital Receipts/Disposal (713) 0 (713) (69) (713) (430) 0 (1,088) 0 0 (2,231) Total: Capital Receipts (29,673) (2,263) (31,936) (14,077) (31,936) (16,543) (21,855) (16,438) (15,250) (15,250) (117,272) Annual Composite Borrowing Requirement 142,300 (5,803) 136,497 51,168 136,497 96,608 111,299 60,408 48,087 29,592 482,491 CAPITAL RECEIPTS BROUGHT FORWARD (2,102) 0 (2,102) (2,102) (2,102) (1,120) (1,550) (1,550) (2,638) (2,638) (2,102) CAPITAL RECEIPTS CARRIED FORWARD 1,120 0 1,120 358 1,120 1,550 1,550 2,638 2,638 2,638 2,638 TOTAL NET COMPOSITE BORROWING REQUIREMENT 141,318 (5,803) 135,515 49,424 135,515 97,038 111,299 61,496 48,087 29,592 483,027 Page 62 of 128
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Project Project Description ENVIRONMENT & INFRASTRUCTURE Traffic & Road Safety Road Safety Initiatives (20mph Zones etc.) A programme of works to improve road safety Road Safety Initiatives - A94 Safety Improvements A programme of works to improve road safety Active Travel Grant - Traffic & Road Safety Schemes A programme of works to improve active travel Additional Road Safety - Pedestrian Crossings A programme of works to provide pedestrian crossing facilities Schools Road Safety Measures A programme of works to improve road safety in the vicinity of schools 20mph Signage Programme - Schools A programme of works to improve road safety in the vicinity of schools 20mph Signage Programme A programme of works to introduce 20mph speed limits. Car Parking Investment Construction of new car park in Auchterarder Car Parking Investment - Pitlochry Purchase of land and construction of a public car park Roads & Lighting Structural Maintenance Road maintenance to extend the life of roads, including predominately road resurfacing, surface dressings, installing new drainage infrastructure and repairs to and replacement of defective embankments and retaining walls Traffic Signal Renewals - Upgrading A programme of works to upgrade existing traffic signal infrastructure Footways Replacement of existing deteriorated footway surfaces Street Lighting Replacement of existing street lighting lanterns, columns and cable network. Investment in Local Footpaths A programme of works to improve and provide local footpaths Road Safety Barriers Renewal of existing barriers where unrecoverable damage has occurred and renewal of barriers where timber posts have been used in construction Bridges Bridge Refurbishment Programme Used to appoint specialist external inspection teams and consultants to carry out specialist access bridge inspections and assessments Vehicular Bridge Parapets Programme - Assess & Upgrade Assessment and Upgrading of Vehicle Parapets Programme Old Perth Bridge - Strengthening Carry out works recommended by the 2018 Bridge Assessment study, including a range of assessment, investigation, strengthening and improvement works Perth Queens Bridge - Strengthening Carry out works recommended by the 2018 Bridge Assessment study, including a range of assessment, investigation, strengthening and improvement works Garry Viaduct Replacement of Bearings and Parapets; including strengthening of deck for bearing replacement jacking up, and to cater for increased parapet vehicular deterrent capacity Culteuchar Culvert Replace existing temporary steel bridge (on hire) with culvert Improvement Schemes A977 Upgrades A programme of works to improve road safety along the A977. Broich Road, Crieff - Road Realignment & Safety Measures Complete Rural Flood Protection Schemes Almondbank Flood Protection Scheme Substantially complete Perth Flood Protection Scheme (South Inch Culvert Reinstatement) Ground investigation and monitoring then design project to refurbish existing culvert Comrie Flood Protection Scheme Design and construction of a scheme to reduce the risk of flooding in Comrie Milnathort Flood Protection Scheme Design and construction of a scheme to reduce the risk of flooding in Milnathort South Kinross Flood Protection Scheme Design and construction of a scheme to reduce the risk of flooding in South Kinross Scone Flood Protection Scheme Design and construction of a scheme to reduce the risk of flooding in Scone Flood Mitigation Measures - Dunkeld and Craigie Burn Design and construction of schemes to reduce the risk of flooding in Dunkeld and Craigie Burn Coastal Change Adaptation Design and construct projects to deal with incidents of coastal erosion Climate Change Nature Restoration Protection and restoration of biodiversity focusing on over-exploitation of the natural environment and addressing its consequences; habitat loss and fragmentation; and invasive non-native species. Waste Strategy Recycling Improvement Fund External Scottish Government funding (Recycling Improvement Fund) to roll out 4th bin to householders for recycling Prudential Borrowing Projects Wheeled Bin Replacement Programme - Domestic Bins Replacement of damaged and end of life wheeled bins for households. Also suppling bins for new properties Wheeled Bin Replacement Programme - Commercial Bins Replacement of damaged and end of life wheeled bins for commercial customers. Also suppling bins for new customers and changes to collection contracts Recycling Containers, Oil Banks & Battery Banks Replacement Programme Replacement of damaged and end of life oil and battery banks Page 63 of 128
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Project Project Description Litter Bins Replacement of damaged and end of life litter bins and/or for general supply of litter bins where required. Vehicle Replacement Programme Fleet vehicle replacement programme Street Lighting Renewal - LED & Column Replacement Street Lighting LED conversion and column replacement programme HOUSING & COMMUNITIES Community Greenspace Play Areas - Improvements Implementation Strategy Regular refurbishment of 146 play areas based on approx. 6-8 per year. Involves community engagement and often co-funding and design of the sites 3G Pitch, Blairgowrie Two phase community led project to provide a new full sized 3G football pitch and pavilion Settlement/Neighbourhood Parks Refurbishment of neighbourhood parks working in partnership with communities to improve, update and renew worn out or obsolete infrastructure Countryside Sites Refurbishment of more natural parks and open spaces Community Greenspace Sites Main fund for all Community Greenspace Sites which is drawn down to support the overall capital programme of refurbishments and upgrades Community Greenspace Bridges Refurbishment programme for all bridges on Community Greenspace sites Core Path Implementation Holding budget for Crieff Comrie Core path development mainly funded through Sustrans Premier Parks Small budget to facilitate refurbishment of former Premier Park upgrades Auchterarder Public Park Major play area upgrade co-funded and designed with the community Kinnoull Hill Complete Cemetery Extensions Funding to allow the extension of existing or development of new cemeteries to address the pressure for burial space Housing Projects Gypsy Travellers Site Improvement Works Programme of works for improvements on Gypsy Traveller sites at Bobbin Mill and Double Dykes Additional Gypsy Traveller Site Improvement Works Additional funding to support improvements works programme on Gypsy Traveller sites New Gypsy Traveller Site Feasibility Study for Gypsy Traveller Transient Site Public Transport Community Transport Iniatives Purchase of vehicles and charging infrastructure for community transport/resilience groups to use to deliver on unmet need in the local area. Community Planning Community-Led Asset Transfers Financial assistance for community groups wishing to take on PKC assets using the community asset transfer process ECONOMY, DEVELOPMENT & PLANNING Improvement schemes A9/A85 Road Junction Improvements New infrastructure including a new A9 overbridge, a bridge over the River Almond and road linking the A85 to Inveralmond and Bertha Park (Phase 1 of Perth Transport Futures Project) - complete Cross Tay Link Road (CTLR) New road and major structure over the River Tay, linking the A9 north of Inveralmond and the A94 north of Scone (Phase 2 of Perth Transport Futures Project). Bertha Park Link Road Phase 3 of Perth Transport Futures Project which is a new link road (1.4km) running through Bertha Park, connecting Phases 1 and 2. Status - specimen design underway. Perth & Kinross Place-making Mill Street Environmental Improvements Potential compensation payments associated with claims against compulsory land acquisition to enable delivery of environmental improvements to stimulate and support development and investment Perth, Place, People Design and development of sustainable transport corridors to improve access to and from Perth and enable additional development and improvement within Perth city centre Perth City Centre Golden Route (Rail Station) Design and development of improvements to access, signage and animation from rail and bus station to Perth city centre to complement improvements to integration of transport City Greening Improvements to support enhancement of retail trading environment and residential areas and enhanced use of space for markets, events and alfresco use Perth & Kinross Lighting Action Plan Architectural and creative lighting to enhance city and towns appearance, reduce energy cost and increase safety at nighttime to increase dwell time, support the hospitality sector, events and grow the evening economy Other Planning Projects Page 64 of 128
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Project Project Description Creative Exchange (former St. John's Primary School) Repurposing old school to offer space to creative industry businesses and create the Famous Grouse Idea Centre, a space to support business innovation. Complete Local Full Fibre Network Provision of gigabit fibre connectivity to Council's buildings to unlock gigabit connectivity for surrounding communities. Completed Low Carbon Transport & Active Travel Hub - Broxden EV Chargers Provision of fast EV chargers combined with solar power generation and battery storage at Broxden Park & Ride - Near completion Perth Eco-Innovation Park at Perth West Provision of enabling infrastructure (access road, A9 underpass and unit platforms) to develop 25ha of employment land supporting clean growth, business innovation and jobs - Phase 1 (11ha) - In development Economic Development Investment - Land & Serviced Units Provision of serviced lands and business units - Additional business units (eg Northfields Business Park and Kinross Business Park) - procurement for design in progress followed by construction. Adapt Your Property - Vacant Town & City Centre Space Adapt Your Property supports capital adaptation works to empty and underused commercial property in city & town centres, looking at adaptation to attract new commercial, community or residential use. Commercial Property Investment Programme North Muirton Industrial Estate - Site Servicing & Provision of Units Only road adoption works remaining Broxden Business Park - Additional Infrastructure Only road adoption works remaining Western Edge, Kinross - Site Servicing Only road adoption works remaining Broxden Drainage Mitigation Works Drainage/pumping station works underway and subject to agreement/contribution from Scottish Water Ruthvenfield Business Centre Works on redevelopment in progress North Muirton Drainage Drainage/pumping station underway Prudential Borrowing Project Land Purchase & Development (Hotel Development) Development agreement secured and release of grant for heritage subject to progression through planning and cost evidence STRATEGY, PEOPLE & RESOURCES Property Services - Project Support Investment in the Learning Estate Investment to upgrade the infrastructure and environment of our existing school estate Methven Primary School Refurbishment Upgrade of Methven Primary School facilities Breadalbane Academy, Aberfeldy - 3G Pitch Additional investment required to upgrade 2G to 3G Kirkmichael Primary School Upgrades Upgrade of Kirkmichael Primary School facilities Early Learning & Childcare - Letham Primary School Upgrade Project 1140 hrs project plus upgrade of primary school infrastructure - Completed - Oakbank Primary School Upgrade Project 1140 hrs project - Completed - Rattray Primary School Upgrade Project 1140 hrs project plus upgrade of primary school infrastructure - Completed North/West Perth - New Primary School New primary school located at Bertha Park Riverside Primary New School Replacement of North Muirton and Balhousie primary schools Perth Academy - Refurbishment Investment to upgrade the infrastructure and environment of the Perth Academy including structural work to sports block, lighting upgrades, classroom upgrades and science block cladding Perth Grammar School - Upgrade Programme Phase 3 Investment to upgrade the infrastructure and environment of the Perth Grammar School including structural work to assembly hall, AV and WiFi upgrades, classroom refurbishment and door upgrades Perth High School - Internal Services & Refurbishment Necessary works to the infrastructure and environment of the current Perth High School Perth High School - New School Investment Replacement of the existing Perth High School Harris Academy/Invergowrie - Extension Extension and reconfiguration of existing space at Harris Academy in Dundee for continuation of access for pupils based in Invergowrie Blairgowrie Recreation Centre - Replacement Replacement of the Recreation Centre in Blairgowrie Technology Upgrades Upgrade to practical teaching environment within the existing school estate Property Services - Projects & Contracts Free School Meal Expansion Programme Upgrading kitchen and dining facilities to provide the enhanced Free School Meals programme Community Campus Access Adaptations To support adaptations in schools and community campuses to help facilitate increased community access Property Services - Property Service Manager DDA Adaptation & Alteration Works Programme To provide unhindered accessibility to all Council Buildings - e.g. Ramps/Lifts/Door Access/Accessible Toilets and Changing Areas Property Compliance Works Programme To ensure compliance with current and changing legislation including - New Fire Alarms; Lighting; Wiring; Fire Protection Works; Gas pipework within buildings and Roof Restraint safety systems Page 65 of 128
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Project Project Description Capital Improvement Projects Programme Roof Upgrades; Full internal refurbishment works; New Heating Systems; Boilers and pipework; Structural Upgrades; Small extensions; New Windows/Doors; New Fencing; New Cladding Pitlochry High School - Upgrade Programme Upgrades to Mechanical and Electrical Infrastructure, including rewiring, heating and controls systems, replacement lighting and consequential building works such as new ceilings, painting and flooring Friarton Depot - Waste Transfer Station This project aims to refurbish the main waste transfer station building to provide a safe environment for workers. The project will involve a complete re-cladding of the existing structure, new doors and new services installation. Some initial enabling work are being carried out currently. Energy Efficiency Works - Various Properties Focusing on a spend to save with projects aiming to reduce energy cost across the property estate Letham Community Wellbeing Hub Refurbishment of Letham Wellbeing Hub to offer a range of services to the local community managed by Letham4All - scheduled for completion end 2023 PH2O Replacement of Perth Leisure Pool and Dewars Ice Rink. On hold pending outcome of Leisure and Culture Assets Review Perth Museum Refurbishment of Perth City Hall to create new museum spaces and cafe. Main construction phase complete and install/fit out on schedule for planned opening spring 2024 Perth Art Gallery Refurbishment of temporary galleries - scheduled for completion November 2023 Prudential Borrowing Projects Decarbonisation This budget will support PKCs path to NetZero and focus primarily on the de- carbonisation of heat and replacing inefficient direct emissions heat sources Energy Conservation & Carbon Reduction Programme This budget is focused on works to reduce PKC energy consumption and help achieve annual KPI energy reduction of 3% Customer & Digital Services ICT Infrastructure & Replacement and Upgrade Programme This Programme delivers the IT / digital environment, digital resources and systems required by staff and young people. The programme maintains, supports and develops computers; networks; telephony; Microsoft systems; connectivity and equipment; datacentres; servers; file storage and back up; security systems and video conferencing Data & Analytics Delivers the governance, tools, technologies and organisation-wide skills required for optimising value from Council data, driving informed decision making around resources, priorities and service delivery targets Supporting Digital Develops the capabilities we need to be an innovative digital organisation. Including developing the Council’s corporate employee (mobile working) and customer (online services) platforms, to create new digital products and services; investment in tools such as Microsoft; resourcing innovation and building digital skills, insight and expertise Software Licences (Revenues & Benefits) NAC Live system licensing for Revenues & Benefits team School Audio-Visual (AV) Equipment Replacement Programme Ensures all Perth and Kinross classrooms have equitable access to audio visual panels and the digital skills to exploit these resources for learning and teaching Mosaic - Swift Social Work System Replacement Purchase and Development of a new Social Work system to replace SWIFT Hardware Funding of additional or bespoke IT Hardware for Communities Staff Licenses Funding of software contracts MIS - SEEMIS Licensing Licencing of Schools Management Information System Case Management System New system to management client cases HEALTH & SOCIAL CARE Occupational Therapy Equipment Supply and install of occupational therapy equipment following referral from heakth and social care professionals. Technology Enabled Telecare Replacement of existing analogue Community Alarm devices to digital alarm units prior to UK switch-off of analogue network, as well as ongoing rolling replacement programme. Moving & Handling Office Refurbishment Relocate staff base, currently under review Software Licences Various licences for essential social care systems Developing Supported Tenancies Contribution towards flagship core and cluster facility for adults with learning disabilities’ Page 66 of 128
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APPENDIX III Approved Proposed Revised Actual Projected Revised Revised Revised Revised Revised Budget Budget Budget to Outturn Budget Budget Budget Budget Budget 18-Sep-24 Adjustment 30-Sep-24 Report 2 Report 2 Report 2 Report 2 Report 2 Report 2 Report 2 Report 2 2024/25 2024/25 2024/25 2024/25 2024/25 2025/26 2026/27 2027/28 2028/29 TOTAL £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Council House New Build Programme Fairfield, Perth 4 4 4 0 0 0 0 4 Council Tax (Second Income) 0 0 0 0 0 0 0 0 Scottish Government Subsidy 0 0 0 0 0 0 0 0 4 0 4 0 4 0 0 0 0 4 Lynedoch Road, Methven - Phase 2 1,175 1,175 815 1,175 0 0 0 0 1,175 Council Tax (Second Income) (240) (240) (240) (240) 0 0 0 0 (240) Scottish Government Subsidy 0 0 0 0 0 0 0 0 935 0 935 575 935 0 0 0 0 935 Lynedoch Road, Methven - Phase 3 0 1,097 1,097 654 1,097 0 0 0 0 1,097 Council Tax (Second Income) 0 (100) (100) (100) 0 0 0 0 (100) Scottish Government Subsidy 0 (556) (556) (556) 0 0 0 0 (556) 0 441 441 654 441 0 0 0 0 441 Future Developments 5,090 (1,776) 3,314 3,314 6,014 6,014 10,292 6,014 31,648 Council Tax (Second Income) 0 0 0 0 0 0 0 0 Scottish Government Subsidy 0 0 0 0 0 0 0 0 5,090 (1,776) 3,314 0 3,314 6,014 6,014 10,292 6,014 31,648 Total Council House New Build 6,029 (1,335) 4,694 1,229 4,694 6,014 6,014 10,292 6,014 33,028 Increase in Council House Stock Council House Buy-Backs 5,205 1,335 6,540 7,229 6,540 4,000 4,000 4,000 4,000 22,540 Scottish Government Subsidy (1,400) (1,400) (980) (1,400) 0 0 0 0 (1,400) 3,805 1,335 5,140 6,249 5,140 4,000 4,000 4,000 4,000 21,140 Lock-ups and Garage Sites 50 50 50 0 0 0 0 50 Standard Delivery Plan Heating Upgrade Contract Works 1,335 1,335 285 1,335 1,320 811 0 0 3,466 Rewiring, Infrastructure & Property Refurbishment 1,628 1,628 470 1,628 850 0 0 0 2,478 Triple Glazing 1,116 1,116 1,052 1,116 0 0 0 0 1,116 Controlled Door Entry 34 34 27 34 0 0 0 0 34 - less Third Party Contribution (5) (5) (5) 0 0 0 0 (5) Kitchen Modernisation Programme 1,352 1,352 427 1,352 2,025 0 0 0 3,377 Bathroom Modernisation Programme 998 998 481 998 0 0 0 0 998 External Fabric 1,460 224 1,684 566 1,684 0 0 0 0 1,684 - less Third Party Contribution (77) (77) (77) 0 0 0 0 (77) Energy Efficiency 472 472 117 472 0 0 0 0 472 Multi Storey Flats 1,835 1,835 5 1,835 0 0 0 0 1,835 Environmental Improvements 272 119 391 324 391 0 0 0 0 391 Fire Precaution Measures 83 83 18 83 0 0 0 0 83 - less Third Party Contribution (20) (20) (20) 0 0 0 0 (20) Sound Insulation 389 389 389 42 0 0 0 431 Structural 256 256 8 256 985 0 0 0 1,241 SHQS Future Developments 0 0 0 4,066 4,808 5,210 3,351 17,435 Total Standard Delivery Plan 11,128 343 11,471 3,780 11,471 9,288 5,619 5,210 3,351 34,939 Other Investment in Council House Stock Total Major Adaptations to Council House Stock 10 10 2 10 0 0 0 0 10 Rannoch Road, Perth - Housing Regeneration 205 205 52 205 0 0 0 0 205 149-151 Dunkeld Road, Perth 20 20 1 20 0 0 0 0 20 St.Catherine's Square Redevelopment 3,393 3,393 4 3,393 0 0 0 0 3,393 Shops & Offices 50 50 50 239 0 0 0 289 Greyfriars and Satellite Sites 50 50 9 50 32 0 0 0 82 Double Dykes Chalet Replacement 5,949 5,949 54 5,949 573 0 0 0 6,522 - Scottish Government Grant (3,426) (3,426) (19) (3,426) 0 0 0 0 (3,426) General Capital Works 147 147 64 147 0 0 0 0 147 Upgrade and Replacements to Lifts Programme 121 121 121 0 0 0 0 121 ICT Expenditure 62 62 62 110 0 0 0 172 Mortgage to Rent 315 315 141 315 0 0 0 0 315 - less Government Grant (90) (90) (90) (90) 0 0 0 0 (90) Total Other Investment in Council House Stock 6,806 0 6,806 218 6,806 954 0 0 0 7,760 Total Net Expenditure 27,818 343 28,161 11,476 28,161 20,256 15,633 19,502 13,365 96,917 Income CAPITAL RECEIPTS (5) (79) (84) (84) (84) 0 0 0 0 (84) CFCR (1,833) (1,833) (1,833) (2,078) (2,004) (2,125) (2,340) (10,380) TOTAL BORROWING REQUIREMENT 25,980 264 26,244 11,392 26,244 18,178 13,629 17,377 11,025 86,453 HRA CAPITAL INVESTMENT PROGRAMME SUMMARY OF CAPITAL RESOURCES AND EXPENDITURE 2024/25 to 2028/29 PERTH AND KINROSS COUNCIL 6 Page 67 of 128
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SIGNIFICANT CAPITAL PROJECTS PROGRESS UPDATE APPENDIX IV Project Title Total Gross Budget (£'000) Third Party Funding (£'000) Total Net Budget (£'000) Projected Outturn (£'000) Completion Date Contract Awarded On Site Status Change Since Last Report Additional Commentary Blairgowrie Recreation Centre - Replacement 36,000 0 36,000 36,000 Easter 2025 - new centre currently scheduled to open late 2024 Yes Yes On track No Work on programme for phase 1 completion December 2024. North/West Perth New Primary School* 24,000 0 24,000 24,000 Summer 2026 No No On track No Project has been put on hold for 2 years due to slow build out rates at Bertha Park. Riverside Primary New School 19,899 0 19,899 19,899 Early summer 2023 Yes Yes Complete No Project complete. Perth High School - New School Investment 80,200 0 80,200 80,200 Summer 2026 - school building curently scheduled to open summer 2025 Yes Yes On track No Works are on programme. Harris Academy/Invergowrie Extension 5,200 0 5,200 5,200 Late 2023 Yes Yes On track No Main extension complete. Cross Tay Link Road (CTLR) 150,500 40,000 110,500 110,500 Spring 2025 Yes Yes On programme No Works continue to progress well with traveller system on R Tay Crossing now dismantled. Demarkfield portal structure constructed. Works continue on old A9 - surfacing, paths, parking area. Finishing and snagging works continue on Link Road. No change to completion which is 31 March 2025. Risks signficantly reduced in period, with weather as well as railway possessions being the key current risks. Comrie Flood Protection Scheme 40,821 32,657 8,164 8,164 Autumn 2026 Yes Yes Contract awarded Yes Balfour Beatty commenced site setup in October 2024. The initial phase of construction will involve site setup, site clearance works, and construction of access routes and are programmed from October 2024 to February 2025. The main construction works are programmed from February 2025 to October 2026. Perth Eco Innovation Park* 32,817 11,275 21,542 21,542 Not currently programmed No No Design package awarded - design programme on track Yes Following the application for LUF grant of £10m being unsuccessful, the Council approved a net increased of £10m on 1 March 2023. Balance of £20m remains unfunded. Further contributions and receipts are anticipated in years beyond the current programme to 2027/28. Approval to spend £1.55m on the inital design works (including planning application) was given in June 2024. Design work package issued to Amey in August 2024, with start-up complete. Project progressing as per design programme. Key risks include liaison with Transport Scotland and determine innovation scope.Positive discussions continue with JDLT in terms of s75, planning and design. Perth Museum 27,232 10,300 16,932 16,932 Spring 2024 Yes Yes Complete No Project complete and opened in March 2024. PH2O 90,000 0 90,000 90,000 Not currently programmed No No Thimblerow approved as new site for Ph2O project at Council on 4 September 2024. Yes Project Board established, programme under development, project no longer on hold. * Third Party Funding excludes Developer Contributions and receipts to be received in future years beyond the current 5-year programme. 6 Page 69 of 128
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PERTH & KINROSS COUNCIL Finance & Resources Committee 20 November 2024 TREASURY ACTIVITY AND COMPLIANCE REPORT 2024/25 – 6 Months to 30 September 2024 Report by Chief Finance Officer (Report No. 24/320) 1. PURPOSE 1.1 The purpose of this report is to update the Committee on Treasury Activity for the period 1 April to 30 September 2024 and to report on compliance with the Council’s Treasury Management Policy Statement (TMPS), Investment Strategy and Prudential Indicators. 2. RECOMMENDATION 2.1 It is recommended that the Committee note the contents of this report. 3. STRUCTURE OF REPORT 3.1 This report is structured over the following sections: • Section 4: Economic Background • Section 5: Treasury Activity • Section 6: Compliance • Section 7: Investment Strategy Compliance and Performance • Section 8: Prudential Indicators • Section 9: Conclusion 4. ECONOMIC BACKGROUND 4.1 The Bank of England’s Monetary Policy Committee (MPC) reduced the UK Bank Base Rate from 5.25% to 5% at their August meeting following reductions in the inflation rate. CPI Inflation had continued to fall from 3.2% in March, and then remained on target at 2% in May and June 2024, before increasing slightly to 2.2% in July and August 2024. 4.2 However, the September figures showed a reduction to 1.7% mainly due to air fares and motor fuels. Additionally, the core inflation rate, which excludes volatile items such as energy and food costs, also dropped. Consequently, the MPC reduced the Bank Base rate again on 7 November to 4.75%. 4.3 However, latest forecasts are now predicting that future cuts to the Base Rate will be at a slower rate than previously anticipated due to rising inflationary expectations. 4.4 UK GDP (Gross Domestic Product) expanded by 0.5% in quarter two of 2024, showing the UK has returned to growth since the start of 2024. 7 Page 71 of 128
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4.5 Internationally, the Eurozone experienced growth of 0.2% in the 3 months to 30 June 2024. CPI Inflation continued to fall to 1.8% in September 2024 whilst interest rates were reduced to 3.65% by the end of the period. In the US, GDP fluctuated over the period closing at 3% at the end of June 2024, whilst inflation reduced over the period. The US interest rate was reduced by 0.5% to the range of 4.75% to 5.0% in September 2024 in response to the fall in inflation. 4.6 The Public Works Loan Board’s (PWLB) certainty fixed interest rates for the 6 months to 30 September 2024, which are based on yields on UK gilts, are shown in the graph at Appendix I. As a result of mixed economic data, borrowing rates showed continuing volatility over the period, however the rates were lower over the period in the shorter periods (up to 5 years) but increased for durations of 10 years and over. 5. TREASURY ACTIVITY 5.1 A summary of the Council’s treasury position and transactions is shown at Appendix II. The main activities are detailed below. 5.2 During the period no new PWLB borrowing was undertaken. However, there was one Local Authority loan of £20 million borrowed on the 28 August 2024 for 3 years at 4.35% in place of PWLB borrowing (the corresponding PWLB rate was 4.77% at that time). This was borrowed for a short duration due to the relatively lower rates, and with the expectation that longer term rates will fall. 5.3 There was also the repayment of two maturing fixed rate PWLB loans, the first one for £3 million at 4.25% over 15 years and the second for £2.5 million at 3.95% over 13 years. Therefore, the Council’s total long-term debt increased by £14.5 million from £628.2 million at an average interest rate of 2.64% to £642.7 million at an average interest rate of 2.68% as at 30 September 2024. 5.4 There were two short-term market loans borrowed in the period to manage daily cashflows, the first for £5 million was borrowed for 25 days at 5.25% in May 2024. The second for £5 million was borrowed for 7 days at 5.20% in July 2024. There were no such loans outstanding as at 30 September 2024. 5.5 Common Good and Charitable Fund balances held on fixed deposit with the Loans Fund remained at £2.415 million at 30 September 2024, however the average interest rate reduced from 4.81% to 4.80% at the end of the current period. Funds held from associated bodies and organisations increased from £2.248 million to £3.593 million over the period, in line with their own cash flow requirements, whilst the average rate paid on these funds decreased from 4.58% to 4.47% in line with the rates applicable on individual loans depending on the balance held. 5.6 Short term cashflow surpluses are invested in a mixture of fixed term deposits, instant access accounts and money market funds. All investments were made in accordance with the approved Investment Strategy and Permitted Investments. Page 72 of 128
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Fixed Term Deposits 5.7 Cashflow surpluses which arise during the year, and which are not immediately required, are generally invested in fixed term deposits for periods of up to 12 months, or up to 3 years where forecast cashflow requirements allow. 5.8 There were 20 fixed rate deposits made in the 6 months to 30 September 2024 (totalling £97 million) for an average amount of £4.85 million and at an average interest rate of 5.27% for an average term of 64 days. In comparison to the previous 6 months to the end of March, fixed deposit activity in the current period increased. The deposits were undertaken where the opportunities arose and were spread amongst other Local Authorities, UK Banks and Foreign Banks. The average rate on investments in the current period reduced from 6.53% to 5.27% due to the cut in base rate and the end of higher rates which were previously available in the local authority market. Fixed rate deposits continued to be undertaken for shorter durations (average 64 days), however this was longer than the previous period (27 days). The fixed deposits undertaken in the current period will generate interest of £890,128 at their maturity. Investments for Daily Cashflow Requirements 5.9 Cashflow surpluses which are required for more immediate needs were invested in the Council’s instant access and Money Market Funds. The investment transactions in the period can be summarised as follows: • The daily average amount of such funds increased slightly from £6.95 million in the previous quarter to £6.97 million at the end of the current period. • The average interest rate achieved on these accounts over the period reduced from 5.32% to 5.16%. • Money Market Funds, which operate on instant access terms, were used extensively over the period. The average amount invested increased from £9.4 million in the previous period to £9.7 million in the current period, whilst the average interest rate decreased from 5.34% to 5.16%. • The activity on these accounts reflects the need to keep a sufficient level of funds for more immediate cashflow purposes over the period. • Interest generated on these investments over the 6-month period amounted to £426,921. 5.10 The total amount of investments outstanding as at 30 September 2024 was £41.456 million compared to £65.533 million at the end of March 2024. The overall average rate of interest on the investments outstanding reduced from 6.48% to 5.09% over this period. This reflects the cut in base rate and reductions in the available rates over the period. 5.11 Total income generated on investments undertaken during the period totals £1.317 million (£670,472 in the 6 months to 31 March 2024). This measure reflects the total return on the investment activity undertaken in the period and is higher in comparison to the previous quarter as fixed term investments increased. Page 73 of 128
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5.12 All of the above investment activities are consistent with the Council’s current investment strategy and cashflow requirements. 6. COMPLIANCE 6.1 For the period ending 30 September 2024, there were no breaches in compliance with the Council’s approved Treasury Management Policy Statement, Treasury Management Practices (TMP’s) or lending limits as detailed in TMP 4 (Approved Instruments, Methods & Techniques). 6.2 Appendix III shows the list of approved counterparties, based on the Council’s current lending policy, as at October 2024. 6.3 For the period ending 30 September 2024 the average closing cleared bank balance was £21,627.83 in credit. This reflects the application of the Council’s “sweep facility” operated by the bank, with any credit balance in excess of £35,000 being “swept up” overnight to the Council’s instant access account. 7. INVESTMENT STRATEGY COMPLIANCE AND PERFORMANCE 7.1 The Treasury Investment Strategy for 2024/25 was approved by the Council at its meeting on 6 March (report 24/69 refers). 7.2 In the current period, the level of the Council’s investments peaked at £84.975 million on 17 April 2024 and reduced to £41.456 million by the end of September 2024. The average daily investment balance over the period was £62.145 million, which reduced from an average of £102.743 million in the previous 6 months and from £161.645 million in the same period of last year. This highlights the steady reduction in investment balances over the last year as funds are applied in financing the approved Capital programme. 7.3 The Investment Strategy was applied in full over the period, with liquidity being maintained using instant access accounts and Money Market Funds as detailed in paragraph 5.9 above. There were no other risks identified in the period. 7.4 The Investment Strategy also incorporates investments held by the Common Good Funds. All such investments during the period were with the Council’s Loans Fund. The only Council funds held by external fund managers relate to Council-administered Charitable Trusts and are, therefore, not covered by this Investment Strategy. 7.5 The budgeted income in 2024/25 for Commercial Property investments is £1.856 million whilst the latest projection is £1.927 million. There were no new property investments entered into during the current period. 8. PRUDENTIAL INDICATORS 8.1 Prudential Indicators for 2024/25 to 2029/30 were approved by the Council at its meeting on 6 March 2024 (report 24/69 refers) as part of the Annual Treasury & Investment Strategy report. Page 74 of 128
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8.2 The latest estimates of the Prudential Indicators are shown in Appendix IV and are based on the Council’s revised Capital Budget being considered at today’s Committee meeting. These show that the Council adhered to all Prudential Limits in the period. However, the annual Loan Charges relative to the Net Revenue stream and the Capital Financing (Borrowing) Requirement show an increasing trend, which reflects the latest estimates for the Capital Programme and interest rate forecasts over the period. These will therefore be kept under review. 9. CONCLUSION 9.1 The Bank of England’s MPC reduced the Bank Base Rate to 5% in August and again to 4.75% in November 2024 due to falling Inflation. However, expectations for future cuts in the Bank Base Rate have reduced due to increasing inflationary pressures. 9.2 Public Works Loans Board (PWLB) borrowing rates continued to be volatile over the period due to future inflationary expectations and economic growth prospects. Over the period, the rates decreased in the shorter durations and increased in longer durations (10 years and over). 9.3 There was repayment of two maturity fixed PWLB Loans, totalling £5.5 million, whilst there was a new local authority loan borrowed by the Council for £20 million for 3 years, at a lower rate than PWLB. 9.4 Investment activity in the period consisted of an increased level of fixed term deposits, whilst instant access and Money Market Funds were used to meet day- to-day cashflow requirements. Investment rates decreased over the period, whilst the total level of investments outstanding also reduced. 9.5 The Council adhered to its Investment Strategy and policies throughout the period, with no breaches in compliance. The Council’s Prudential Indicators were also adhered to throughout the period. 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 Page 75 of 128
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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 None Asset Management (land, property, IST) None 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. Workforce 2.2 There are no direct workforce implications arising from this report. Page 76 of 128
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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 4.1 The Council’s Treasury advisors, Link Asset Services, have been consulted in the preparation of this report. 2. BACKGROUND PAPERS 2.1 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. Page 77 of 128
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3. APPENDICES • Appendix I – PWLB Fixed Maturity Interest Rates from 1 April to 30 September 2024 • Appendix II – Summary of the Treasury Position and Transactions from 1 April to 30 September 2024 • Appendix III – Approved Investment Counterparty List • Appendix IV – Monitoring of Prudential Indicators – Period ending 30 September 2024 Page 78 of 128
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Appendix I 3.50 3.75 4.00 4.25 4.50 4.75 5.00 5.25 5.50 5.75 01-Apr-24 08-Apr-24 15-Apr-24 22-Apr-24 29-Apr-24 06-May-24 13-May-24 20-May-24 27-May-24 03-Jun-24 10-Jun-24 17-Jun-24 24-Jun-24 01-Jul-24 08-Jul-24 15-Jul-24 22-Jul-24 29-Jul-24 05-Aug-24 12-Aug-24 19-Aug-24 26-Aug-24 02-Sep-24 09-Sep-24 16-Sep-24 23-Sep-24 30-Sep-24 1 Year 5 Years 10 Years 20 Years 30 Years 50 Years 7 Page 79 of 128
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SUMMARY OF THE TREASURY POSITION AND TRANSACTIONS 1 APRIL TO 30 SEPTEMBER 2024 APPENDIX II 1 LONG TERM BORROWING (a) Long Term Borrowing 1 April to 30 September 2024 Average Average Amount No. Rate (%) Life (years) (£) Local Authority Bond (3 years) 1 4.35% 3 20,000,000 1 4.35% 3 20,000,000 (b) Long Term Debt Repayments 1 April 2024 to 30 September 2024 Average Amount No. Rate (%) (£) PWLB - Maturity Loan - Scheduled Repayments 2 4.11% 5,500,000 2 4.11% 5,500,000 (c) Long Term Debt Outstanding Outstanding Average Outstanding Average 31-Mar-24 Rate 30-Sep-24 Rate £ £ Public Works Loan Board 585,000,000 2.50% 579,500,000 2.48% Money Market Loans (LOBO's) 43,200,000 4.59% 63,200,000 4.51% Other Long Term Debt 0 0.00% 0 0.00% TOTAL 628,200,000 2.64% 642,700,000 2.68% 2 SHORT TERM BORROWING (a) Short Term Market Borrowing - 1 April to 30 September 2024 Average Average Average Interest No. Amount (£) Rate (%) Term (Days) (£) Temporary borrowing 2 5,000,000 5.23% 16 22,965.75 2 5,000,000 5.23% 16 22,965.75 (b) Short Term Borrowing Outstanding Outstanding Average Outstanding Average 31-Mar-24 Rate 30-Sep-24 Rate £ £ Market Borrowing 0 0.00% 0 0.00% Common Good and Charitable Funds 2,414,508 4.81% 2,414,508 4.80% Local Trusts & Investors 2,247,591 4.58% 3,592,640 4.47% TOTAL 4,662,099 4.69% 6,007,148 4.60% 7 Page 81 of 128
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SUMMARY OF THE TREASURY POSITION AND TRANSACTIONS 1 APRIL TO 30 SEPTEMBER 2024 APPENDIX II 3 INVESTMENTS (a) Investment Transactions - 1 April to 30 September 2024 Average Average Average Total Fixed Deposits & Investments No. Amount (£) Rate (%) Term (Days) Interest (£) Banks 6 5,833,333 5.29% 59 299,647.95 Foreign Banks and Institutions 6 4,333,333 5.15% 88 325,044.66 Other Local Authorities 8 4,500,000 5.34% 50 265,435.62 20 4,850,000 5.27% 64 890,128.22 Average Average Total Instant/Notice Accounts & Money Market Funds Amount (£) Rate (%) Interest (£) Instant Access/Notice accounts 448,944 5.00% 7,437.41 Money Market Funds 9,736,786 5.16% 419,483.57 6,972,177 5.16% 426,920.98 (b) Investments Outstanding Outstanding Average Outstanding Average 31-Mar-24 Rate 30-Sep-24 Rate £ £ UK Banks 25,008,505 5.91% 1,305,563 4.87% Foreign Banks and Institutions 10,000,000 5.94% 26,000,000 5.15% Other Local Authorities 29,500,000 7.18% 5,000,000 5.00% Money Market Funds 1,025,000 5.29% 9,150,000 5.02% TOTAL 65,533,505 6.48% 41,455,563 5.09% Page 82 of 128
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APPROVED INVESTMENT COUNTERPARTY LIST APPENDIX III Fitch Credit CDS Maximum Country Rating Range Lending Note (2) Category 1 - Principal UK Clearing Banks - 40% Investment total (or £20M per Counterparty if higher) (Minimum rating required Fitch A, F1) Bank of Scotland (RFB) (5) UK A+, F1 In range 6 months £80million Group limit Barclays Bank plc (NRFB) (5) UK A+, F1 No data 6 months Barclays Bank plc (RFB) (5) UK A+, F1 In range 6 months Goldman Sachs International Bank UK A+, F1 In range 6 months Handelsbanken plc UK AA, F1+ No data 12 months HSBC Bank plc (NRFB) UK AA-, F1+ In range 12 months HSBC Bank plc (RFB) UK AA-, F1+ No data 12 months Lloyds Bank Corporate Markets Plc (NRFB) UK A+, F1 No data 6 months £80million Group limit Lloyds Banking Group plc (RFB) UK A+, F1 In range 6 months £80million Group limit NatWest Markets Plc (NRFB) UK A+, F1 In range 12 months Royal Bank of Scotland plc (RFB) (inc Nat West) (3) (4) UK A+, F1 Nationalised 12 months Sovereign Rating AA Santander UK plc (inc Cater Allen) UK A+, F1 No data 12 months Standard Chartered Bank UK A+, F1 In range 6 months Sumitomo Mitsui Banking Corporation Europe Ltd UK A, F1 In range 6 months Category 2 - Foreign Banks & Institutions - 25% Investment total (or £10M per Counterparty if higher) (Minimum rating required Fitch A, F1) Australia and New Zealand (ANZ) Banking Group Ltd Aus A+, F1+ In range 12 months Commonwealth Bank of Australia Aus A+, F1+ In range 12 months Macquarie Bank Ltd Aus A, F1 No data 12 months National Australia Bank Ltd Aus A+, F1+ In range 12 months Westpac Banking Corporation Aus A+, F1+ In range 12 months BNP Paribas Fortis Bank Belgium A+, F1 No data 1 month Sovereign Rating AA- KBC Bank Belgium A+, F1 No data 1 month Sovereign Rating AA- Bank of Montreal Can AA-, F1+ No data 12 months Bank of Nova Scotia Can AA-, F1+ No data 12 months Canadian Imperial Bank of Commerce Can AA-, F1+ No data 12 months National Bank of Canada Can A+, F1 No data 12 months Increased from 6 months Royal Bank of Canada Can AA, F1+ No data 12 months Toronto Dominion Bank Can AA-, F1+ No data 12 months Danske Bank Denmark A, F1 In range 6 months Nordea Bank Finland plc Finland AA-, F1+ No data 1 month Sovereign Rating AA+ BNP Paribas France A+, F1 In range 1 month Sovereign Rating AA- Credit Agricole Corporate and Investment Bank France A+, F1 In range 1 month Sovereign Rating AA- Credit Agricole SA France A+, F1 In range 1 month Sovereign Rating AA- Credit Industriel et Commercial France A+, F1 No data 1 month Sovereign Rating AA- DZ Bank AG Germany AA-, F1+ No data 12 months Landesbank Hessen-Thueringen Girozentral (Helaba) Germany A+, F1+ In range 12 months Landwirtschaftliche Rentenbank Germany AAA, F1+ No data 24 months NRW Bank Germany AAA, F1+ No data 24 months ABN AMRO Bank Netherlands A, F1 No data 6 months Bank Nederlandse Germeenten Netherlands AAA, F1+ No data 24 months Cooperatieve Rabobank Netherlands A+, F1+ In range 12 Months ING Bank Netherlands AA-, F1+ In range 12 Months DBS Bank Limited Singapore AA-, F1+ No data 12 months United Overseas Bank Ltd Singapore AA-, F1+ No data 12 months Skandinaviska Enskilda Banken AB Sweden AA-, F1+ No data 12 months Svenska Handelsbanken AB Sweden AA, F1+ No data 12 months Swedbank AB Sweden A+, F1 No data 12 months UBS AG Switzerland AA-, F1+ In range 12 months Bank of America, NA USA AA-, F1+ No data 12 months Bank of New York Mellon USA AA, F1+ No data 24 months Citibank, NA USA A+, F1 In range 12 months JP Morgan Chase Bank, NA USA AA, F1+ No data 12 months Wells Fargo Bank, NA USA AA-, F1+ In range 12 months 7 Page 83 of 128
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APPROVED INVESTMENT COUNTERPARTY LIST APPENDIX III Category 3 - Subsidiary Banks & Building Societies - 15% of Investment total (or £10M per Counterparty if higher) (Minimum rating required Fitch A, F1) (parent bank shown in brackets) Subsidiary Banks None Building Societies Nationwide Building Society UK A, F1 No data 6 months Category 4 - Other Local Authorities - 20% of Investment total (or £20M per Counterparty if higher) As arranged With the exclusion of the below: Northamptonshire County Council Budgetary issues Lancashire County Council Regulatory issues Spelthorne Borough Council Commercialism activities London Borough of Croydon Commercialism activities Thurrock Council Excessive short-term exposure/strategy Plymouth City Council Regulatory issues City of Liverpool Council Regulatory issues Wirral Council Budgetary issues London Borough of Bexley Budgetary issues Slough Borough Council Budgetary issues Peterborough City Council Budgetary issues Nottingham City Council Budgetary issues Woking Council Budgetary/debt issues Category 5 Money Market Funds - 10% of Investment Total (or £10M per Counterparty if higher) (Minimum rating required Fitch AAA) Aberdeen Standard Investments UK AAA Aviva Investors Liquidity Fund UK AAA Federated Sterling Liquidity Fund (Class 3) UK AAA Insight Sterling Liquidity Fund (Class 5) UK AAA Deutsche Bank Sterling Fund UK AAA Note: (1) - Standard & Poor's credit ratings shown, as no Fitch credit rating available (2) - All Soveriegn credit ratings for above Countries are AAA, unless stated otherwise. (3) - Banks are part/majority owned by the UK government (4) - UK Sovereign Rating is AA (Fitch and Standard & Poor's) Last Updated: 18-Oct-24(5) - NRFB = Non Ring Fenced Bank, RFB = Ring Fenced Ban Page 84 of 128
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PERTH AND KINROSS COUNCIL PRUDENTIAL INDICATORS - 6 MONTHS ENDING 30 SEPTEMBER 2024 APPENDIX IV 1 Financing Costs:Net Revenue Stream The ratio of Capital Financing Costs (Loan Charges) to the Council's net revenue stream shall not exceed the following limits, which are based on historic levels, and allow some headroom for movement in interest rates. The estimated Financing Costs below are based on the latest monitoring figures. 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 Prudential Limit - General Fund 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% Estimated Ratio of Financing Costs to Revenue 7.50% 8.65% 9.62% 10.24% 10.75% 11.13% Prudential Limit - HRA 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% Estimated Ratio of Financing Costs to Revenue 22.60% 23.40% 25.82% 28.28% 28.91% 28.90% 2 Gross & Net Borrowing and Capital Financing Requirements For prudence, net external borrowing must not exceed the total capital financing requirement, thus ensuring that over the medium term, borrowing is only undertaken for capital purposes. The estimated total net borrowing and Capital Financing Requirement at the end of each of the years are as follows: Actual as at Projected Projected Projected Projected Projected Projected 30-Sep-24 31-Mar-25 31-Mar-26 31-Mar-27 31-Mar-28 31-Mar-29 31-Mar-30 Net External Borrowing* 719,080,000 849,228,000 979,612,000 1,099,995,000 1,160,378,000 1,198,261,000 1,222,661,000 Gross External Borrowing* 760,535,000 874,228,000 999,612,000 1,119,995,000 1,180,378,000 1,218,261,000 1,242,661,000 Capital Financing Requirement 857,154,000 925,462,000 1,027,511,000 1,141,096,000 1,201,078,000 1,238,898,000 1,261,935,000 *For the purpose of this indicator, Borrowing includes the outstanding liability under PPP/PFI contracts. 3 Estimates of Gross Capital Expenditure The total estimated Capital Expenditure contained within the Council's Budgets for each year is as follows, based on updated monitoring figures. Composite Programme 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 Current estimate 169,980,000 114,628,000 136,686,000 84,854,000 65,787,000 47,778,000 Original Budget Estimate (including Budget Motion) 207,568,000 119,305,000 90,371,000 71,378,000 37,039,000 34,008,000 Movement in Estimated Capital Expenditure (37,588,000) (4,677,000) 46,315,000 13,476,000 28,748,000 13,770,000 The Original Budget Estimates are those per the 2024/25 to 2029/30 Composite Capital Budget Report on 28 February 2024 The latest estimates for Capital Expenditure are based on the F&R Capital Monitoring Report No 2 on 20 November 2024. HRA Programme 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 Current estimate 28,161,000 20,256,000 15,633,000 19,502,000 13,365,000 20,000,000 Original Budget Estimate 19,831,000 18,248,000 17,283,000 22,105,000 20,044,000 20,000,000 Movement in Estimated Capital Expenditure 8,330,000 2,008,000 (1,650,000) (2,603,000) (6,679,000) 0 The Original Budget Estimates are those per the 2024/25 to 2028/29 Housing & Social Wellbeing Budget Report on 24 January 2024. The latest estimates for Capital Expenditure are based on the F&R Capital Monitoring Report No 2 on 20 November 2024. 7 Page 85 of 128
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PERTH AND KINROSS COUNCIL PRUDENTIAL INDICATORS - 6 MONTHS ENDING 30 SEPTEMBER 2024 APPENDIX IV 4 Estimate of Capital Financing Requirement The estimate (as at October 2024) of the Capital Financing Requirement (ie new borrowing requirement for Capital Expenditure) for each year based on these plans is as follows: Composite Programme 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 Current Estimated Capital Financing Requirement 135,171,000 97,489,000 111,300,000 61,388,000 48,087,000 29,592,000 Original Budget Estimate (including Budget Motion) 177,907,000 102,378,000 65,781,000 49,185,000 19,739,000 16,222,000 Movement in Estimated Capital Financing Requirement (42,736,000) (4,889,000) 45,519,000 12,203,000 28,348,000 13,370,000 The Original Budget Estimates are those per the 2024/25 to 2029/30 Composite Capital Budget Report on 28 February 2024 The latest estimates for Capital Expenditure are based on the F&R Capital Monitoring Report No 2 on 20 November 2024. HRA Programme 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 Current Estimated Capital Financing Requirement 26,244,000 18,178,000 13,629,000 17,377,000 11,025,000 17,700,000 Original Budget Estimate 17,998,000 16,170,000 15,279,000 19,980,000 17,704,000 17,700,000 Movement in Estimated Capital Financing Requirement 8,246,000 2,008,000 (1,650,000) (2,603,000) (6,679,000) 0 The Original Budget Estimates are those per the 2024/25 to 2028/29 Housing & Social Wellbeing Budget Report on 24 January 2024. The latest estimates for Capital Expenditure are based on the F&R Capital Monitoring Report No 2 on 20 November 2024. 5 External Debt (Gross and Net) As at Projected Projected Projected Projected Projected Projected External Borrowing 30-Sep-24 31-Mar-25 31-Mar-26 31-Mar-27 31-Mar-28 31-Mar-29 31-Mar-30 Public Works Loan Board 579,500,000 697,000,000 827,000,000 952,000,000 1,037,000,000 1,079,500,000 1,109,500,000 Market Bonds (LOBOs) 63,200,000 63,200,000 63,200,000 63,200,000 43,200,000 43,200,000 43,200,000 Project Borrowing 0 0 0 0 0 0 0 Special Loans 2,414,508 2,414,508 2,414,508 2,414,508 2,414,508 2,414,508 2,414,508 Temporary Loans/Other Borrowing 3,593,640 3,000,000 2,800,000 2,600,000 2,400,000 2,200,000 2,000,000 Other Long Term Liabilities (PPP/PFI) 111,826,977 108,613,977 104,197,227 99,780,477 95,363,727 90,946,977 85,546,177 Total Gross External Debt 760,535,125 874,228,485 999,611,735 1,119,994,985 1,180,378,235 1,218,261,485 1,242,660,685 Short Term Investments (41,455,563) (25,000,000) (20,000,000) (20,000,000) (20,000,000) (20,000,000) (20,000,000) Long Term Investments 0 0 0 0 0 0 0 Total Net External Debt 719,079,561 849,228,484 979,611,734 1,099,994,984 1,160,378,234 1,198,261,484 1,222,660,684 Note: Operational Boundary 761,000,000 875,000,000 1,000,000,000 1,120,000,000 1,181,000,000 1,219,000,000 1,243,000,000 Authorised Limit 1,280,000,000 1,280,000,000 1,280,000,000 1,280,000,000 1,280,000,000 1,280,000,000 1,280,000,000 The Operational Boundary and Authorised Limit are based on Gross External Debt. Page 86 of 128
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PERTH AND KINROSS COUNCIL FINANCE & RESOURCES COMMITTEE 20 NOVEMBER 2024 DRUMMOND ARMS, CRIEFF Report by Strategic Lead – Economy, Development & Planning (Report No. 24/321) 1. PURPOSE 1.1 This report provides an update on the status of the Listed former Drummond Arms Hotel in Crieff, which has laid empty since 2006 and was added to the Buildings at Risk Register for Scotland in 2012. Despite the efforts of a community group to acquire and redevelop the building, its condition has continued to deteriorate to the point where Council has had no option but to serve a Dangerous Buildings Notice in the interests of public safety. 1.2 Following acquisition in 2019, the redevelopment efforts by Drummond Arms Regeneration Limited (DARL), established as a separate legal entity by the Crieff Community Trust, have not succeeded. With no prospect of any further grant funding, or a viable re-use, DARL will have exhausted its cash reserves by March 2025 and the Directors have therefore decided to voluntarily wind-up the company at that time. They have written to the Council seeking help to address the public safety risk by stepping in to acquire the building and mitigate the risk it poses. If DARL is liquidated while the building is still in its ownership the Drummond Arms would become ownerless, and the Council would inevitably need to step-in at that time in the interests of public safety. 1.3 Therefore, it is recommended that, as a last resort, the Council immediately acquires the building at nil value in order to manage the process in an orderly manner. A further consideration is the impact on Crieff of road closure should the building fail. Given the failed attempts to secure a viable redevelopment, it is inevitable that the Council will be required to seek Listed Building Consent to demolish the building and clear the site at an estimated cost of £3 million. In the medium-term the cleared site will be redeveloped for affordable housing by the Council and/or another Registered Social Landlord. 2. RECOMMENDATIONS 2.1 It is recommended that Committee: • Notes the current status of the former Drummond Arms Hotel and the intention of Drummond Arms Regeneration Ltd to wind-up the company • Agrees to acquire the building at nil value and mitigates the public safety risk in compliance with the Dangerous Buildings Notice • Agrees to instruct officers to apply for Listed Building Consent and Building Warrant to demolish the structure 8 Page 87 of 128
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• Agrees to allocate up to £3m from the 2025/26 Capital Budget to cover demolition costs. • Instructs officers to prepare a development plan for the provision of a flatted affordable housing development in line with the Council’s Corporate Asset Management Strategy. 3. STRUCTURE OF REPORT 3.1 This report is structured over the following sections: • Section 4: Background/Main Issues • Section 5: Proposals • Section 6: Conclusion • Appendices 4. BACKGROUND / MAIN ISSUES 4.1 The Drummond Arms was completed in 1874. It is a category ‘B’ listed building that ceased to trade as a hotel in 2006. The ground floor of the premises was occupied as a branch of the Royal Bank of Scotland until they also ceased to trade from the premises in 2012, due to concerns over the condition of the building. The Drummond Arms was added to the Buildings at Risk Register for Scotland in 2012. 4.2 The Crieff Community Trust (CCT), realising the precarious situation that the building was in, embarked on a right to buy bid in 2014. Drummond Arms Regeneration Limited (DARL) was set up in 2019 by CCT when they successfully took title of the abandoned building that by then was blighting the town centre. DARL’s objectives were to respond to community’s needs through facilitating the refurbishment and regeneration of this large derelict, but important, building. 4.3 Since DARL took ownership of the building, works including stripping out have been undertaken to put it in a more advantageous position for redevelopment. It has however continued to fall into significant disrepair and the updated structural survey that DARL commissioned (Appendix 1) in August this year, indicates deterioration to the structural elements and timbers which will result in significant costs to secure the building and make it safe in the short/medium term. The structural engineering report concludes: “It can only therefore be concluded that a roof collapse would present a significant risk of further progressive collapse, either to individual building elements, or to the front façade – particularly if the façade bracing was struck and damaged by falling debris. The collapse hazard would affect the building itself and areas surrounding the building, including the pavement and road to the frontage. It is our view that the current condition of the roof timbers and ongoing rapid decline will lead to a further loss of integrity and roof collapse in the short to medium time- period.” Page 88 of 128
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Given the state of this deterioration and the cost of preserving the structure, with no prospect of a viable redevelopment, demolition is now the only realistic outcome. 4.4 Just over £1 million of grant funding has been spent in assessing, securing, clearing and making the building safe, and additionally purchasing the adjoining ground floor bank to facilitate future development. This has been funded mainly through grant awards via the Council; including the Scottish Government’s Town Centre Regeneration (report 19/170 refers) and Placed Based Investment Funds, (reports 20/204 and 21/149 refer) with £897,444 paid. A further £150,450 was funded through the Scottish Government’s Community Led Local Development Fund; £10,000 from the Council’s Open for Business Fund; and £5,000 from the Vacant Property Feasibility Fund. In addition, DARL secured two further grant awards: £120,000 directly from the Scottish Government’s Investing in Communities Fund to pay a project coordinator over the period 2018-2022; and £5,000 from the Architectural Heritage Fund. Appendix 2 provides a summary of both the grants awarded via the Council and a summary of spend by categories of works. The Scottish Government has confirmed that given the grant awards were made in good faith in line with scheme objectives, there will be no clawback. 4.5 Over the past couple of years DARL continued to instruct significant specialist contractors to try and move the project forward and attract a potential investor/occupier. However, specialist contractors in structural waterproofing and timber conservation of buildings that are either listed or in a conservation area, inspected the site on 6 March 2024. They reported that that the roof timbers are now beyond repair. 4.6 Furthermore, significant works are now required to make the building safe in compliance with a Dangerous Buildings Notice served on 29 October 2024 asking that all essential works be commenced by January 2025 and completed by June 2025. Primarily, and as a minimum, this involves removing the roof structure, removal of chimneys and the removal of the high street facing dormer windows. The structural engineer’s report attached at Appendix 1 provides detail of the condition of the building at present. Because of these works, the removal of the asbestos in the building would also have to be addressed at significant expense. 4.7 With many of the statutory consents in relation to previous works having now expired, the making safe option will require many of the same permissions that full demolition of the building require. Large scale machinery such as cranes would be required to secure the structural stability of the building to undertake the necessary works. The cost of these safety-related works has been estimated at more than £2 million by cost consultants CDA commissioned by DARL. This is not dissimilar to the estimated cost for full demolition of £2.70 million also costed by CDA (£3.64 million for partial demolition if the facade was retained). It should be noted that these costs are subject to potential future inflation and that heritage funding bodies would not support any partial or full demolition proposals. Page 89 of 128
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4.8 DARL has intimated that while it has available funds to cover the cost of the recent updated structure report, drone survey, a part-time development coordinator, directors’ insurances, scaffolding inspections and accountancy fees until March 2025, they do not have the funds available to operate beyond this date nor to undertake the required works to make the building safe. Therefore, the Directors have concluded that, having exhausted all funding options, they intend to place, DARL into voluntary liquidation at the end of March 2025, otherwise they would be insolvent. 4.9 DARL has failed to re-develop the site and as they have no financial means to continue beyond March 2025, its directors have therefore written to the Council seeking its intervention including a managed transfer of ownership title. This letter is attached at Appendix 3. 5. PROPOSALS 5.1 The Council has evaluated the request from DARL from a public safety perspective, considering the prominent location of the site in the centre of Crieff, and with regard to the Council’s strategic priorities. Subject to funding availability, the site will be re-developed for community benefit, specifically affordable housing. 5.2 This is an exceptional set of circumstances given the scale of the building and its critical location. The legal responsibility for building safety and compliance with legislation rests with owners, not the Council. However, in this case the Council has extraordinarily little option but to intervene, to protect the public from the risks posed by this dangerous building, and the potential economic harm a (partial) closure of the A85 would cause. 5.3 Therefore, as a last resort, it is recommended that the Council acquires the Drummond Arms building from DARL and, subject to securing the necessary statutory consents, undertakes demolition works to eliminate the risks posed. The estimated costs of up to £3 million are proposed to be included in the 2025/26 Capital Programme. 5.4 Following demolition and clearance, a plan for the site’s redevelopment will be worked up for future Committee consideration. 6. CONCLUSION 6.1 The Drummond Arms Hotel in Crieff is beyond economic repair or redevelopment. Its community owners are not able to finance necessary works to make the building safe in compliance with the Dangerous Building Notice. Drummond Arms Regeneration Limited, established by the Crieff Community Trust, has now sought the Council’s assistance. It is recommended that the Council acquires the site at nil value and takes appropriate action to ensure public safety. In all likelihood, this means demolition. This action will also secure the site for the future benefit of the community, including the provision of affordable housing. Page 90 of 128
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Author Name Designation Contact Details Jonathan Janes Estates and Commercial Investment Team Leader EPLCommitteeReports@pkc.gov.uk Approved Name Designation Date David Littlejohn Strategic Lead- Economy, Development & Planning 13 November 2024 APPENDICES • Appendix 1 - Narra Structural Report – June 2024 • Appendix 2 - Breakdown of expenditure funded from Council grant awards. • Appendix 3 – Letter from DARL Directors to Councillor Laing Page 91 of 128
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ANNEX 1. IMPLICATIONS, ASSESSMENTS, CONSULTATION AND COMMUNICATION Strategic Implications Yes / None Community Plan / Single Outcome Agreement Yes Corporate Plan Yes Resource Implications Financial Yes Workforce No Asset Management (land, property, IST) Yes Assessments Equality Impact Assessment No Strategic Environmental Assessment Sustainability (community, economic, environmental) Legal and Governance Yes Risk Yes Consultation Internal Yes External Yes Communication Communications Plan Yes 1. Strategic Implications Community Plan/Single Outcome Agreement 1.1 This report supports the following priority within the Community Plan 2022-27. (i) Reducing Poverty (including child poverty, fuel poverty and food poverty) by potentially provided affordable housing in Crieff. Corporate Plan 1.2 This report supports the following objective within the Corporate Plan:- (iv) Communities are resilient and physically, digital and socially connected by potentially increasing the supply and availability of rural housing. 2. Resource Implications Financial 2.1 The costs of acquisition and demolition have been estimated at up to £3m. It is proposed to allocate the £3m in the Capital Budget for 2025/26. Workforce 2.2 No workforce implications. Page 92 of 128
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Asset Management (land, property, IT) 2.3 The proposal has an asset management implication as a new asset will be added to the Council’s portfolio. The building is being listed on the Buildings at Risk Register for Scotland and a Dangerous Buildings Notice that has been served by the Council on 29th October 2024 asking that all essential works be commenced by January 2025 and completed by June 2025 to make the building safe. The Council will be responsible for the building management until demolition and for the site re-development. 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. The proposals have been considered under the Corporate Equalities Impact Assessment process (EqIA) with the following outcome: (i) Assessed as not relevant for the purposes of EqIA Strategic Environmental Assessment 3.2 The Environmental Assessment (Scotland) Act 2005 places a duty on the Council to identify and assess the environmental consequences of its proposals. The proposals have been considered under the Act and no further action is required as it does not qualify as a PPS as defined by the Act and is therefore exempt. Sustainability 3.3 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. Under the Climate Change (Scotland) Act 2009 the Council also has a duty relating to climate change and, in exercising its functions must act: • in the way best calculated to delivery of the Act’s emissions reduction targets; • in the way best calculated to deliver any statutory adaptation programmes; and • in a way that it considers most sustainable. The proposals to demolish a dangerous building and re-develop the site for the benefits of the community including provision of affordable housing is considered to be the most sustainable. Page 93 of 128
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Legal and Governance 3.4 The Strategic Lead – Legal & Governance has been consulted and there are legal implications in acquiring a dangerous building and in its demolition. These legal implications could be more complex if DARL, the current owner, was to to go into voluntary liquidation after March 2025 leaving the building without owner. Risk 3.5 There are no direct risk implications arising from this report other than those reported with the body of the report” 4. Consultation Internal 4.1 The Strategic Lead – Finance & Business Support, the Strategic Lead – Legal & Governance, the Strategic Lead – Property Services and the Strategic Lead – Housing & Communities have been consulted. External 4.2 The Council has communicated with Drummond Arms Regeneration Limited (DARL) set up by Crieff Community Trust. 5. Communication 5.1 Communications will be undertaken with Drummond Arms Regeneration Limited (DARL) and Crieff Community Trust. Communications will also be undertaken with residents and interested parties in the community. 2. BACKGROUND PAPERS 2.1 No background papers. Page 94 of 128
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Appendix 2: Breakdown of Expenditure Funded by Council Grant Awards to DARL Table 1: Breakdown of Grants Through Funds Managed by PKC GRANT FUND PAYMENTS MADE (£) Town Centre Fund/Place Based Investment Programme £897,444 Community Led Local Development (CLLD) Fund £150,450 Open For Business Fund £10,000 Vacant Property Fund £5,000 TOTAL £1,062,894 Table 2: Summary of Spend by Categories of Works Funded Category of Works Expenditure Strip Out/Physical Works £598,129 (56%) Scaffolding Costs £230,075 (22%) Purchase of former RBS Building £90,000 (8.5%) Professional Fees/Consultancy £89,844 (8.5%) Project Coordinator (2023/24) £30,000 (3%) Other Costs £24,846 (2%) TOTAL £1,062,894 8 Page 125 of 128
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