Composite Capital Budget 2025/31 and Housing Investment Programme 2025/30 - Monitoring Report No. 3
Perth and Kinross Council · 4 February 2026
Back to Finance and Resources Committee — 4 February 2026 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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Our vision is a Perth and Kinross where everyone can live life well, free from poverty and inequality ___________________________________________________________________ Committee: Finance and Resources Committee Date of Meeting: 4 February 2026 Report Title: Composite Capital Budget 2025/31 and Housing Investment Programme 2025/30 – Monitoring Report No.3 Report Number: 26/37 Report Author: John Jennings, Senior Accountant James Salisbury, Senior Accountant Organisational Lead: Scott Walker, Chief Finance Officer ___________________________________________________________________ 1. Purpose 1.1 This report provides a summary position to date for the 6-year Composite Capital Budget for 2025/26 to 2030/31 and the 5-year Housing Investment Programme for 2025/26 to 2029/30 and seeks approval for adjustments to the programmes. 1.2 Sections 1. Purpose 2. Recommendations 3. Background 4. Composite Capital Programme – Gross Capital Resources 5. Composite Capital Programme – Expenditure 6. Housing Investment Programme 7. Budget Overview 8. Financial Risks 9. Impact and Value Assessment 10. Appendices 2. Recommendations It is recommended that the Committee: 2.1 notes the contents of the report. 2.2 approves the proposed adjustments to the six-year Composite Capital Budget 2025/26 to 2030/31 set out in Sections 4 and 5 of the report and summarised in Appendices I and II.
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2.3 approves the proposed adjustments to the Housing Investment Programme Budget 2025/26 to 2029/30 set out in Section 6 of the report and summarised in Appendix III. 2.4 notes progress with the delivery of major Capital projects as summarised in Appendix IV. 3. Background 3.1 The Finance and Resources Committee approved an updated six-year gross Composite Capital Budget for 2025/26 to 2030/31 totalling £560.047 million and a five-year gross Housing Investment Programme for 2025/26 to 2029/30 totalling £89.027 million at its meeting on 26 November 2025 (report 25/327 refers). 3.2 This monitoring report advises on current year expenditure to 31 December 2025, and the latest estimate of the projected outturn for each of the years to 2030/31 for the Composite Programme and 2029/30 for the Housing Investment Programme. 4. Composite Capital Programme – Gross Capital Resources 4.1 The current estimated total gross capital resources (which includes movements in Capital Receipts, Capital Grants, Contributions and borrowing) available over the six years 2025/26 to 2030/31 amount to £561.986 million. Movements from the revised Composite Capital Budget approved on 26 November 2025 for these 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 26 Nov 2025 Current Estimate Movement £M £M £M 2025/26 137.062 118.327 (18.735) 2026/27 112.742 133.279 20.537 2027/28 88.212 88.795 0.583 2028/29 71.157 71.470 0.313 2029/30 70.245 68.533 (1.712) 2030/31 80.629 81.582 0.953 Total 560.047 561.986 1.939 4.2 The movement in the total Gross Resources for the 6 years 2025/26 to 2030/31 shown at Section 4.1 above can be summarised as follows: £’000 Increase in Scottish Government Capital Grants (Section 4.3) 1.593 Reduction in Ring Fenced Capital Receipts (Section 4.4) (0.221) Increase in Third Party and Revenue Contributions (Section 4.5 and 4.6) 1.132 Reduction in Borrowing (Section 4.7 and 4.8) (0.565) Total Increase in Gross Capital Resources (Section 4.1) 1.939 4.3 On the 26 November 2025 the Scottish Government announced £1 million of Capital Grant towards the Scott Street fire. As the work associated with the
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fire is in the Revenue Budget, it is proposed to reflect the funding in the Revenue Budget by adjusting the General Fund Contribution to the Capital Fund, as outlined in the Revenue Monitoring report being considered by this Committee at today’s meeting. The Council has also been allocated £530,000 from the Road Safety Improvement Fund in 2025/26 (Section 5.2.2), less an adjustment of a £1,000 reduction in the Road Safety Initiative Grant on completion of the previous programme of works. In addition, the Scottish Government announced the allocation of Housing First Capital Grant funding for 2025/26, with this Council being allocated £63,742. This has been added to Unallocated Capital Resources in 2025/26 pending proposals being brought forward. 4.4 The only movement in Capital Receipts is a reduction of £226,000 in estimated Ring-Fenced Receipts in relation to the Vehicle Replacement Programme, offset by an increase of £5,000 in Waste Recycling disposals (Section 5.2.6). 4.5 There is an increase of £1.120 million in Third Party Contributions relating to the following programmes: Active Travel - £1.050 million (Section 5.2.2) Core Paths - £73,000 (Section 5.3.2) Kinnoull Hill - £16,000 (Section 5.3.2) Less £19,000 (Section 5.2.3) reduction for Structural Maintenance 4.6 There is also an increase of £12,000 in Revenue Contributions for Energy Efficiency works from the Salix Reserve (Section 5.5.3). 4.7 The projected borrowing requirement in 2025/26, which is effectively the balancing item for resources, is £97.631 million. This is £20.689 million lower than the amount approved by this Committee on 26 November 2025 (£118.320 million). 4.8 The total borrowing requirement in the subsequent years 2026/27 to 2030/31 has increased by £20.124 million to £330.801 million, resulting in an overall reduction in the level of borrowing across the whole 6-year programme of £0.565 million. This movements in borrowing is summarised as follows: 2025/26 2026/27 2027/28 Later Years Total £m £m £m £m £m (Increase) in Scottish Government Grant (Section 4.3). (1.000) 0.000 0 0 (1.000) Increase/(Reduction) in Environment & Infrastructure Prudential Borrowing (Section 5.2.6) (0.525) 0.960 0 0 0.435 Movements arising from re-phasing of expenditure and receipts (Appendix II) (19.164) 19.027 0.583 (0.446) 0 Increase/(Reduction) in Borrowing Requirement (20.689) 19.987 0.583 (0.446) (0.565)
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4.9 The chart below shows the Capital Resources required to fund the 2025/26 Composite Capital Programme following the proposed budget adjustments detailed in this report. 83% 10% 0%5% 2%0%Projected Capital Resources 2025/26 (February 2026) Borrowing (£97.631M) Grants (£12.968M) Tay City Deal (£0.000M) Developer Contributions (£5.344M) Third Party & Revenue Contributions (£1.920M) Receipts (£0.464M) £Million 5. Composite Capital Programme – Expenditure 5.1 Total Expenditure and Proposed Budget Adjustments to the Current Programme 5.1.1 Total expenditure (net of grants and contributions) to 31 December 2025 on the Composite Capital Programme is detailed in Appendix II and summarised as follows: Projected Outturn (£m) Net Expenditure to 31 Dec 2025 (£m) % of Projected Outturn Environment and Infrastructure 41.504 25.681 62% Housing and Communities 5.958 1.533 26% Economy, Development and Planning 24.054 10.755 45% Property Services 33.923 20.459 60% Customer and Digital Services 4.185 1.754 42% Health and Social Care 0.953 0.752 79% Unallocated 4.743 0.000 0% Total Net Capital Expenditure 115.320 60.934 53% 5.1.2 Appendix IV includes updates on the progress of delivering the Council’s major Capital projects.
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5.2 Environment and Infrastructure 5.2.1 The Strategic Lead has reviewed the programme for Environment and Infrastructure and proposes various budget adjustments, the most significant of which are described below. 5.2.2 Within Traffic and Road Network, £530,000 has been received from the Road Safety Improvement Fund which has resulted in a corresponding increase in the expenditure budget for Road Safety Initiatives. This funding has to be used by 31 March and has therefore taken priority, with a consequential movement of £186,000 from the current year to next on the core programme. Similarly, within Active Travel Grant, £1.050 million has been received with an expenditure deadline of 31 March, with a consequential movement of £210,000 into 2026/27. 5.2.3 Within the Roads Maintenance Partnership, there has been a reduction in Third-Party Contributions of £19,000 relating to the Scottish Water works at Tay Street within Structural Maintenance, with a resulting reduction in the expenditure budget. Works at the South Inch Culvert have completed, and it is proposed the remaining budget of £195,000 is returned to Structural Maintenance. Lastly, in line with the estimated works due for completion within Structural Maintenance for the remainder of the financial year, it is proposed £904,000 is moved into 2026/27. 5.2.4 Within Structures, the following budget adjustments are proposed: Project 25/26 £m 26/27 £m Future Years £m Virement £m Description Bridge Refurbishment Programme (0.105) 0.165 - (0.052) The budget required for the remainder of the year has been reviewed and it is proposed £165,000 is slipped to 2026/27. Of this £52,000 relates to the Corb Bridge virement from below, and £8,000 of other smaller movements. Corb Bridge Culvert, Kinross (0.052) - - 0.052 Works completed, virement to return underspend to Bridge Refurbishment Programme. Garry Viaduct - (0.127) 0.127 - Rephasing in line with the programme of works received from the contractor with initial works continuing in 2026/27 and main works commencing in 2027/28. Bridge of Tilt (0.965) 0.965 - - River levels are currently high, and with a SEPA restriction on construction work in rivers during winter months, scour works cannot progress within the previously anticipated timescales with the budget slipped accordingly.
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5.2.5 Within Flooding, the following budget adjustments are proposed: 2025/26 £m 2026/27 £m Description Comrie Flood Protection Scheme (5.263) 5.263 There is slight slippage on the overall programme of approximately three weeks resulting in a requirement to slip some of the construction cost into 2026/27. Additionally, the remainder of the contingency budget in the current year is not anticipated to be spent this year and this too requires rephasing into 2026/27. South Kinross Flood Protection Scheme (0.221) 0.221 Expenditure incurred during the current year is limited to survey work. Following two valid objections to the scheme an initial Local Authority Hearing took place in October 2025. The hearing will reconvene in February 2026. It is proposed an additional £221,000 is rephased to 2026/27 due to this delay. Coastal Change Adaptation (0.059) 0.059 Works are not due to take place in the current financial year and are planned for 2026/27. It is proposed this budget is therefore rephased into 2026/27. 5.2.6 Within the Prudential Borrowing programme, the following budget adjustments are proposed: Project 25/26 £m 26/27 £m Description Recycling in Schools – Waste Bin Purchases (0.036) 0.036 The budget for Recycling in Schools was previously split equally between 2025/26 and 2026/27. The timeframe for delivery has been reviewed and revised, and it is proposed £36,000 is rephased to reflect this. Recycling Containers, Oil Banks & Battery Banks Replacement Programme Capital Receipts – Disposals (0.055) (0.003) 0.058 - There is a slight increase in the receipts expected for Recycling Containers and this is combined with a reduction in the number of replacements in the current year. It is proposed £58,000 is rephased into 2026/27 accordingly. Litter Bins (0.057) 0.057 An assessment of need for the replacement of Litter Bins is currently underway to inform the planning for the roll out next year. The replacements to take place in 2025/26 are therefore limited and it is proposed £57,000 of the budget is rephased.
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Vehicle Replacement Programme Capital Receipts – Disposals (0.600) 0.226 0.809 - The majority of vehicles to be delivered in the current year are on track. There has been a delay in procuring a library vehicle whilst the specification is finalised. In addition, the contingency budget is not required for the remainder of the year. It is therefore proposed a total of £600,000 is rephased into 2026/27. Further is it proposed borrowing is increased in 2026/27 by £209,000 due to the rising cost of replacement vehicles. Additionally, capital receipt budgets for the disposal of old vehicles have been rolled into future years over time. These amounts have not always been achieved, and it is now expected that £226,000 of the income budget will not be realised. This results in a need to increase borrowing to pay for replacement vehicles. This results in a total increase in borrowing of £435,000. 5.2.7 The above proposed adjustments, together with other small movements, have been reflected in Appendices I and II. 5.3 Housing and Communities 5.3.1 The Strategic Lead has reviewed the programme for Housing and Communities and proposes the following budget adjustments. 5.3.2 Within Community Greenspace, it is proposed £50,000 is drawn down from Community Greenspace Sites in 2026/27 for the Crematorium Access Road in the current year. Additionally, Third Party Contributions have been received as follows which increase the expenditure budgets: £92,000 from Walk Wheel Cycle Trust (formerly Sustrans) towards the Crieff to Comrie path within Core Path Implementation. However this is offset by an underspend of £19,000 in expenditure and grant on the previous programme from last year, giving an overall increase in £73,000 in the current year. £16,000 from Kinnoull Hill Woodland Park User Group towards landscaping to supplement work already being undertaken at Kinnoull Hill. 5.3.3 The above adjustments, together with other small movements, have been reflected in Appendices I and II. 5.4 Economy, Development and Planning 5.4.1 The Strategic Lead has reviewed the programme for Economy, Development and Planning and proposed the following budget adjustments. 5.4.2 Within Roads Infrastructure, the contract for the design work for the Perth Eco-Innovation Park was awarded toward the end of 2025. The expenditure for the remainder of this financial year will be limited to this design work, and it
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is therefore proposed the remainder of the budget of £7.931 million is moved into 2026/27. There is also a corresponding movement of the £550,000 Tay Cities Deal Funding into 2026/27. These adjustments are pending a full review of the project to be considered by the Council as part of the budget report to be submitted to its meeting on 4 March 2026. 5.4.3 The above proposed adjustments have been reflected in Appendices I and II. 5.5 Property Services 5.5.1 The Strategic Lead has reviewed the programme for Property Services and proposed various budget adjustments, the most significant of which are described below. 5.5.2 Within Project Support, the following budget adjustments are proposed: Project 25/26 £m 26/27 £m 27/28 £m Virement £m Description School Toilet Upgrade Programme 0.200 0.600 0.600 1.400 Proposed phasing allocation and budget virement from Capital Improvement Projects Programme in 2029/30 to provide for a continuous programme of works for the School Toilet Upgrades. Methven Primary School Refurbishment (1.000) 1.000 - - The tender received for the proposed design of the gym / dining hall was significantly over budget. Market testing is being undertaken to inform the next steps. Perth Academy Refurbishment 0.145 (0.145) - - Wi-Fi works are underway and progressing well and the proposed budget acceleration reflects this. Perth High School – New School Investment (1.300) 1.300 - - Phase 2 for the demolition of the old building has been delayed due to additional surveys requiring to be undertaken prior to commencement of the works. Harris Academy (0.026) - - (0.026) Project has been confirmed as completed with an underspend of £26,000 which has been vired to the Unallocated Resources. Roof Upgrade Programme 0.500 - - 0.500 Proposed budget virement from Capital Improvement Projects Programme in 2029/30 to provide for the Roof Upgrade Programme.
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5.5.3 Within Property Service Management, the following budget adjustments are proposed: 2025/26 £m 2026/27 £m Future Years £m Description DDA Adaptation & Alteration Works Programme (0.103) 0.103 - Rephasing in line with works anticipated to now take place in 2026/27. Energy Efficiency Works Revenue Contribution (Salix Reserve) 0.012 (0.012) - - - - Works on building a management system at Logiealmond Primary School, funded from the Salix Reserve. Crieff Drummond Arms Regeneration (0.750) 0.750 - Works to address the Dangerous Building Notice have been completed. The site is effectively closed until Listed Building Consent is obtained from Historic Environment Scotland. Perth Concert Hall (0.195) - 0.195 Rephasing in line with the level of works to be completed in the current year. 5.5.4 Within the Property Service Management Prudential Borrowing programme, the office moves associated with Pullar House are now complete and the project has moved towards the construction phase. It is proposed £200,000 is moved into 2026/27 in line with the updated expenditure projections. 5.5.5 All the above proposed adjustments have been reflected in Appendices I and II. 5.6 Customer and Digital Services 5.6.1 The Strategic Lead has reviewed the programme for Customer and Digital Services and it is proposed to move some of the budget for ICT Infrastructure Replacement (£0.582 million) and Supporting Digital (£0.256 million) from 2025/26 to 2030/31. These adjustments reflect updated estimated requirements for the current year. 5.6.2 It is also proposed to increase and extend the budget for Software Licences (Revenues and Benefits) from 2026/27 to 2030/31. The budget for this annual requirement has not increased previously and the 2026/27 and 2027/28 budgeted amount is not sufficient to meet the current estimated costs. Further, there is currently no budget provision for the years from 2028/29. It is therefore proposed to increase the budgets for this programme across all these years by £0.324 million by applying this amount from Unallocated Resources in 2025/26.
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5.7 Unallocated Resources 5.7.1 The proposals outlined in this report in relation to the Unallocated Capital Resources are summarised in the following table: 2025/26 £m Later Years £m TOTAL £m Description Opening Resources 4.977 6.246 11.223 Transfers In: Housing First Grant 0.064 0 0.064 Section 4.3 Harris Academy 0.026 0 0.026 Section 5.5.2 Transfers Out: Software Licences (Revenues and Benefits) (0.324) 0 (0.324) Section 5.6.2 Closing Resources 4.743 6.246 10.989 5.7.2 After the above proposed movements, the balance of Unallocated Resources is £10.989 million over the 6-year programme. 6. Housing Investment Programme 6.1 The total current estimated expenditure, net of contributions, for the Housing Investment Programme over the 5 years 2025/26 to 2029/30 has remained unchanged to £89.027 million. Movements across years from the previous estimates are summarised in the table below and detailed in Appendix III. Approved 26 Nov 2025 Current Estimate Movement £m £m £m 2025/26 42.138 46.695 4.557 2026/27 17.000 17.321 0.321 2027/28 13.776 12.280 (1.496) 2028/29 8.015 7.003 (1.012) 2029/30 8.098 5.728 (2.370) Total 89.027 89.027 0.000 Total Expenditure to 31 December 2025 (Housing Investment Programme) 6.2 Net expenditure for 2025/26 to 31 December 2025 amounts to £24.832 million, with £18,000 of receipts. Therefore, the borrowing requirement for the year to date is £24.814 million.
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6.3 The Strategic Leads for Housing and Communities and Property Services have reviewed the Housing Investment Programme and proposed the budget adjustments outlined below. 6.4 It is proposed to drawdown £100,000 from the New Build Future Developments budget in 2025/26 for site preparation works for the proposed schemes at Beechgrove (£62,000) and Balhousie (£38,000) sites. There are no proposed budget movements on the Council House Buy Back programme. To date, 102 properties have been purchased, with a further 13 properties under offer, exceeded the annual target of 40 buybacks. 6.5 It is also proposed to draw down various amounts from the SHQS Future Developments budgets over various years for the Multi-Storey Flats project as follows: 2025/26 £m 2026/27 £m 2027/28 £m 2028/29 £m 2029/30 £m TOTAL £m Multi-Storey Flats 2.544 2.273 0 0 0 4.817 Scottish Government Grant (0.067) 0 0 0 0 (0.067) Third Party Contribution 0 (0.481) 0 0 0 (0.481) SHQS Future Developments 0 (1.459) (1.131) (1.012) (0.667) (4.269) Total 2.477 0.333 (1.131) (1.012) (0.667) 0 6.6 Due to factors such as delays with utilities, chalet manufacturing timelines, additional drainage works and incomplete design costings following changes to the original Quantity Surveyor (now in administration), the projected costs for the Double Dyles Chalet Replacement programme have increased by £1.684 million. There is also an adjustment of £19,000 to the Scottish Government Grant budget. This results in an overall increase of £1.703 million in 2025/26, and it is proposed that this funded by transferring £1.591 million from the New Build Future Developments budget and £112,000 from the SHQS Future Developments budget in 2029/30. 6.7 There are other smaller proposed adjustments which have been included in Appendix III. These include £33,000 of Scottish Government Grant for Energy Efficiency in 2025/26 which enhances the expenditure on this programme. 6.8 There are no movements in Capital Receipts or Capital Financed from Current Revenue (CFCR) across the 6-year programme. Consequently, the total borrowing remains unchanged at £79.786 million. The proposed adjustments in this report have increased the borrowing for the current year to 56% of the whole 6-year programme Borrowing Requirement. 6.9 All the proposed movements outlined above have been included in Appendix III.
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7. Budget Overview 7.1 The projected net expenditure outturn in 2025/26 for the Composite Capital Budget is £115.320 million and represents 79% of the original 2025/26 budget approved on 30 April 2025 (£146.146 million). The revised budget is based on the latest projections of expenditure and all budget adjustments outlined within this report. 7.2 Net expenditure to 31 December 2025 on the Composite Capital Budget is £60.934 million and represents 53% of the proposed revised budget for 2025/26 of £115.320 million. 7.3 The projected net expenditure outturn in 2025/26 for the Housing Investment Programme is £46.695 million and represents 166% of the original 2025/26 budget approved on 30 April 2025 (£28.098 million). This increase reflects the allocation of future years block budgets to specific projects in 2025/26 and the increase in the Council House Buy-Back programme. 7.4 Net expenditure to 31 December 2025 on the Housing Investment Programme is £24.832 million which represents 53% of the proposed revised budget for 2025/26 of £46.695 million. 7.5 The Council’s total Borrowing Requirement to 31 December 2025, based on the Composite and Housing Investment Programmes, is £73.952 million. 7.6 The estimated overall Council Borrowing Requirement for 2025/26 as a whole has reduced by £16.132 million to £142.642 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 £20.689 million and an increase on the Housing Investment Programme of £4.557 million. 7.7 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. 8. Financial Risks 8.1 In preparing the Council's capital 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, given the nature of capital projects these risks are also likely to impact future years plans. 8.2 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 unallocated funds available to meet unforeseen expenditure.
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8.3 Given the latest monitoring position outlined in this report, the risks to 2025/26 have been removed or reduced. Going forward, risks to future years Capital Expenditure plans will be monitored with mitigating actions identified. The main risks impacting the Capital Budget are maintained in Appendix V. 8.4 These risks are monitored continuously by officers, and any implications on the Capital Budget will be reported to the Committee at the appropriate time. 9. Impact and Value Assessment 9.1 This is an operational report, and as such, an impact and value assessment in not required. 10. Appendices Appendix I - Composite Capital Programme - Estimated Capital Resources 2025/26 to 2030/31 Appendix II – Composite Capital Programme - Summary of Capital Resources and Expenditure 2025/26 to 2030/31 Appendix III – HRA Capital Investment Programme – Summary of Capital Resources and Expenditure 2025/26 to 2029/30 Appendix IV – Significant Capital Projects Progress Update Appendix V – Capital Budget Financial Risks