Strategic Investment and Composite Capital Budget Update - 2026/27 to 2031/32
Perth and Kinross Council · 4 March 2026
Back to Perth and Kinross Council — 4 March 2026 and its agenda
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Our vision is a Perth and Kinross where everyone can live life well, free from poverty and inequality ___________________________________________________________________ Committee or Board: Perth and Kinross Council Date of Meeting: 4 March 2026 Report Title: Strategic Investment and Composite Capital Budget Update – 2026/27 to 2031/32 Report Number: 26/55 Report Author: John Jennings, Senior Accountant Gregor Walker, Asset Management Officer Organisational Lead: Scott Walker, Chief Finance Officer ___________________________________________________________________ 1. Purpose 1.1 The purpose of this report is to outline the strategic context within which the Council’s Capital Budget is set, the progress to date in developing the Council’s Asset Management Plans, and to detail the budget proposals for the Composite Capital Programme for the six years from 2026/27 to 2031/32. The report also includes an update on and seeks approval for further development of the Perth Eco-Innovation Park. 1.2 Sections 1. Purpose 2. Recommendations 3. Background 4. Strategic Context 5. Asset Management Plans and Strategy 6. Perth Eco Innovation Park (PEIP) 7. Adjustments to Capital Budget 2025/26 to 2030/31 8. Capital Budget proposals for 2031/32 9. Funding Strategy 10. Impact Value Assessment 11. Appendices
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2. Recommendations It is recommended that the Council: 2.1 Notes the progress made to date on developing the Council’s Asset Management Plans, as detailed in Section 5. 2.2 Notes the progress to date on the previously approved Perth Eco-Innovation Park, and approves the programme of works, delivered through a staged gateway approach and the use of £1.5 million of the approved budget to progress the design stage of the project, as detailed in Section 6. 2.3 Approves the adjustments to the current approved Capital Budget from 2025/26 to 2030/31 set out in Section 7. 2.4 Approves the estimated new capital resources available for 2031/32 and the proposed expenditure allocations as detailed at Section 8 of this report. 2.5 Approve the six-year Composite Capital Budget for 2026/27 to 2031/32 as shown at Appendix III and IV of this report. 3. Background Historic Information/Context 3.1 At its meeting on 26 February 2025, the Council approved the six-year Composite Capital Budget for 2025/26 to 2030/31 (Report No. 25/37 refers). The Finance and Resources Committee subsequently approved updates to this programme throughout the current financial year. In order to maintain a six-year budget, estimated resources and expenditure proposals for 2031/32 have been developed. 3.2 This report outlines the estimated resources available for the Composite Capital Budget and details the proposed Composite Capital Programme for the years 2026/27 to 2031/32, thus maintaining a six-year programme. 4. Strategic Context 4.1 The Council’s approach to asset management and the Capital Budget is shaped by a combination of long-term strategic commitments, statutory responsibilities, and its response to significant external pressures. Together, these factors influence both the scale of investment required and the Council’s capacity to deliver a sustainable, affordable and prioritised capital programme.
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National Policy and Legislative Requirements 4.2 Government and public bodies across Scotland are increasingly being asked to consider our collective responses to the financial, demand and other pressures facing the public sector. Last year the Scottish Government set out its Public Service Reform Strategy Delivering for Scotland, as well as refreshing its Digital Strategy for Scotland and continuing its work in relation to Single Scottish Estate planning. 4.3 In addition, a range of national policies set expectations for the condition, performance and use of public assets. These include statutory duties related to school estate standards, health and safety, building regulations, energy performance, net zero targets, flood risk management, road safety, and digital connectivity/service delivery. 4.4 The Council must ensure compliance across its asset base, requiring ongoing investment in planned maintenance, replacement and modernisation. National policy interventions—such as changes in building standards, evolving expectations for learning environments, and reforms to waste and recycling infrastructure—also create new capital requirements. These must be incorporated into long-term planning and prioritisation. Financial and Economic Conditions 4.5 The capital programme continues to operate within a constrained financial environment. National capital funding for local government has seen limited real terms growth at a time of rising demand for investment across the country. This places greater emphasis on affordability, phasing of projects, and maximising external funding sources at a time of rising demand for investment across the country. 4.6 Economic conditions remain a significant influence. Construction inflation, supply chain disruption, labour shortages, and volatility in material costs have driven up project prices and increased the financial risk associated with major capital schemes. Interest rates, borrowing costs and market confidence also directly impact the affordability and long-term financing of the programme. Strategic Priorities 4.7 The Council has a clear stated vision and priorities, as set out within its Corporate Plan 2022-27. The Corporate Plan vision is delivered through seven corporate priorities, listed below: Tackling poverty Tackling climate change and supporting sustainable places Developing a resilient, stronger and greener 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
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Working in partnership with communities 4.8 These corporate priorities are there to inform where resources must be focused to deliver the ambition set out in the organisational vision. The need for clear prioritisation is particularly acute in a period of tightening financial resources, when limited capacity must be directed towards those activities that will have the greatest impact on achieving the vision. 4.9 Within our current investment planning and capital funding the Council has seen significant investment in a number of our priority areas including investment in our education and leisure estates to support our young people achieving their full potential and in supporting and promoting physical and mental wellbeing. Additionally, investment in our roads, structures and flooding infrastructure supports our commitment to tackling climate change and supporting sustainable places. 4.10 This report also seeks permission to progress work in relation to the Perth Eco Innovation Park, a key economic driver for the city, wider authority area and city region. Council also considered at its meeting on 25 February an update on current and future Tay Cities projects, and future investment opportunities to further support our economic growth. 4.11 Within our programme there are however gaps, most notably in relation to capital investment in our social care resource and whilst investment in initiatives such as the Letham Hub have been key in supporting targeted communities and tackling poverty, investment in these areas remains relatively limited in comparison to some others. 4.12 Officers are working on the development of a longer-term strategic 30-year investment plan, outlined in Section 5, to assess the level of need across our various asset bases, consider the changing demographic, economic and social influences in our communities and bring forward a prioritised programme of investment for our communities. This plan will be informed by headings set out within the remainder of this section of the report. Demographic Change and Service Demand 4.13 Perth and Kinross is experiencing some of the most pronounced demographic change in Scotland, with substantial growth projected in older age groups. This creates new pressures on the social care estate, housing supply, transport accessibility, and community infrastructure. At the same time, population shifts within local communities influence demand for school capacity, leisure facilities, and local amenities. 4.14 Asset management planning must therefore reflect long term demographic trends, ensuring that the estate remains aligned to the changing needs of communities and supports the Council’s strategic priorities.
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Climate Change and the Net Zero Transition 4.15 The Council has statutory duties and strategic commitments relating to climate change, sustainability, and carbon reduction. The shift to net zero requires major investment in the energy efficiency of buildings, decarbonisation of heat, the transition to electric vehicles, and resilience against more extreme weather events. 4.16 This places significant demand on the capital programme to: Retrofit existing buildings and infrastructure Enable sustainable growth and transport Improve flood and climate resilience Reduce emissions across the corporate estate Failure to act would not only increase long term costs but also heighten risk to service continuity and asset condition. National Infrastructure and Regulatory Change 4.17 Changes in national infrastructure planning—such as energy grid capacity, digital connectivity frameworks, or transport priorities—affect the Council’s ability to deliver local infrastructure projects. Regulatory changes in building safety, water and drainage, and electrical systems can also result in additional investment needs or accelerate the replacement of existing assets. 4.18 The Council must remain agile and responsive to these regulatory and infrastructure shifts, ensuring compliance and safeguarding communities. Economic Growth, Placemaking and Regeneration 4.19 The capital programme is a key driver of economic development and regeneration across Perth and Kinross. The wider policy context, including regional economic strategies, City Deal commitments, and national planning policies, shapes the scale and type of investment required. 4.20 The Council’s approach to asset management therefore needs to support: Town centre regeneration Housing delivery and infrastructure Tourism, culture and heritage strategies Sustainable transport and active travel 5. Asset Management Plans and Strategy 5.1 In January 2024, Council approved the Corporate Asset Management Framework (Report No. 24/18 refers), including a Corporate Asset Management Policy and Strategy that defines the Council’s approach to managing assets in support of strategic priorities. This framework is supported by five asset management plans covering Community Greenspace, Fleet, ICT, Property, and Roads.
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5.2 The asset plans describe how individual asset streams adhere to the corporate policy and provide an assessment of the 30-year investment requirement for each asset stream based upon life cycle planning for the existing asset base and existing levels of service. The asset plans are intended to be iterative documents and will be updated on an annual basis to incorporate additional investment and disinvestment decisions. 5.3 Asset management for the Council’s social housing stock is managed separately through the Strategic Housing Investment Programme (SHIP), developed in consultation with tenants and funded through the Housing Revenue Account. 5.4 The critical importance for service delivery of the Council’s assets and infrastructure is reflected within the 5 stream asset management plans. The asset plans also highlight the long-term financial challenge presented through investing in and operating these assets. 5.5 Detailed information on each asset stream was also set out within the Corporate Asset Management Framework (Report No. 24/18 refers). This position has been updated and the total investment required, based on existing service levels, not updated for inflation, is now £3.45 billion which is set out in Table 1 below. An overview of asset portfolio is also included in Appendix I. Table 1: Corporate Asset Management Overview and Life Cycle Planning Investment Projections (30 Year Plan) (2025/26 -2054/55) Asset Stream Current Asset Base Lifecycle Planning Investment Projections (30 Year Plan) Community Greenspace 1,649 greenspace sites £0.123 billion Fleet 2,599 items of fleet and mechanical equipment £0.109 billion Information and Communication Technology (ICT) 28,284 items of hardware and all corporate software £0.254 billion Property 979 sites within the property estate £2.140 billion Roads 1,550 miles of carriageway and related infrastructure £0.823 billion Total £3.449 billion 5.6 The Corporate Asset Management Plan and Strategy emphasise the need for the Council committing a substantial and ongoing share of its capital resources to the maintenance and renewal of its existing assets and infrastructure.
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5.7 The 30-year Property investment plan is based on the current and projected needs of the estate, as these needs are challenged and reviewed, we will endeavour through the Property Asset Management plan to dispose of assets we no longer require and reuse others to benefit core council services, housing crisis and community needs. This aligns with the Disposal of Land and Building Policy, Corporate Asset Management Framework and Property Asset Management Strategy. 5.8 Property Services will focus initial reviews on vacant premises and establish a cost avoidance/ running costs impact on potential savings across the estate. 5.9 The condition of the Council’s asset portfolio is monitored annually to assess performance, identify emerging risks, and inform future investment planning. Table 2 summarises the year-on-year change in condition indicators across key asset categories between 2023/24 and 2024/25, highlighting areas of improvement as well as assets showing signs of deterioration. This comparison provides an evidence base for prioritising maintenance, renewal, and capital investment to ensure assets continue to support effective service delivery. Table 2: Condition comparison between 2023/24 and 2024/25 2023/24 2024/2 5 Chang e Carriageway Condition 67.60% 65.50% -2.10% Footway Condition 88.97% 89.75% +0.78% Street Lighting within expected life 72.10% 78.42% +6.32% Bridge Average Stock Condition Indicator 83.51% 83.47% -0.04% Bridge Critical Stock Condition Indicator 71.79% 71.52% -0.27% Traffic Signals within expected service life 85.41% 83.75% -1.66% IT Assets within expected service life 75.00% 79.00% +4.00% Fleet Assets within expected service life 71.00% 74.00% +3.00% Community Greenspace Bridges not being monitored for reduced condition 42.10% 42.10% 0.00% Community Greenspace Play Parks within expected service life 65.00% 58.00% -7.00% Properties in A or B Condition 91.88% 92.60% +0.72% 5.10 Effective asset management relies on a clear understanding of the key risks across each asset category and how these can be reduced through appropriate controls. Asset leads have developed a risk register, providing a consistent assessment of both inherent risks—those present before mitigation —and the residual risks that remain after existing controls are applied. This work strengthens the Council’s ability to make informed decisions, prioritise resources, and maintain effective oversight to ensure assets remain safe, reliable, and compliant.
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Table 3: Asset inherent & residual risk score Asset category Risk event Inherent Risk Score Residual Risk Score Carriageways our carriageways become inadequate , unusable, non-compliant and/or unsafe 25 15 Footways our footways become inadequate, unusable, non-compliant and/or unsafe. 25 15 Fleet our fleet assets become unreliable, non-compliant and/or unsafe 25 15 Greenspace our parks and open space assets including cemeteries become unsafe, unreliable and/or non- compliant 16 12 ICT our ICT assets become unreliable, unavailable and / or unsafe 25 15 Property our property assets become unsafe, unreliable and/or non-compliant 25 15 Street Lighting our street lighting assets become non-compliant, unsafe, inadequate and/or ineffective 25 5 Structures our critical structural assets (bridges, retaining walls, culverts, become unsafe /unviable and/or unusable 25 25 Traffic Management our traffic signals become unreliable/unsafe and non-compliant 25 15 5.11 The asset risk assessment identifies Structures as the Council’s most urgent priority, with no reduction in risk from an inherent score of 25, highlighting insufficient mitigation and the high consequences of failure. 5.12 Carriageways and Traffic Signals also require early intervention, as both carry high inherent risks and have experienced recent declines in condition, indicating that deterioration is beginning to outpace current management measures. 5.13 In addition, Greenspace Play Parks show an increase in overall age despite the recent investment by the Scottish Government in funding upgrades. This is because the rate of full renewal and refurbishment is still below the 15-year average life expectancy target and is something which is being monitored to ensure safety concerns are addressed, through partial refurbishments or replacement of single items of equipment. This will become more challenging without the Scottish Government Capital funding and the reductions in the Council’s revenue budgets.
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5.14 Overall, while most asset classes demonstrate effective risk reduction, these priority areas present the greatest immediate challenges to safety, compliance, and service reliability and should be the primary focus for targeted investment and enhanced monitoring. 6. Perth West – Perth Eco-Innovation Park (PEIP) 6.1 In March 2023, the Council approved £10 million towards the delivery of enabling infrastructure for Phase 1. The project was added to the Capital Programme with total estimated costs of £33 million made up of £23 million of external funding (developer contributions -£13 million, ground lease income - £5 million, and grant - £5 million) (Report No. 23/73 refers). In June 2024, the Finance and Resource Committee agreed to commence pre-construction works using the £3 million allocated for 2025/26 (Report No. 24/184). 6.2 This report provides an update on project progress and seeks Council approval to proceed with the programme of works, delivered through a staged gateway approach. The Council is specifically asked to approve proceeding with Gateway 1, including the use of £1.5 million from the previously approved £10 million allocation to procure the detailed design (and subsequent construction) contract. 6.3 A detailed update of the Perth West development and the enabling infrastructure for the Perth Eco-Innovation Park (PEIP) is provided in Appendix II, with a summary set out below. 6.4 Planning Permission in Principle (PPiP) for the Perth West mixed-use development was granted in November 2023. The proposal includes: Up to 1,500 homes delivered in two phases (1,000 units initially, followed by 500, subject to a second access point) Significant new employment land, addressing a recognised shortage in the area 6.5 To deliver the development and the PEIP, substantial enabling infrastructure is required, including: an underpass beneath the A9, a new access road from Tweed Place, a serviced and engineered commercial development platform. 6.6 The PEIP is a 26-hectare employment area forming part of Perth West. It aims to create c500 direct high-value jobs within the clean growth sector, establishing a national platform for Net Zero innovation in mobility, logistics or energy transition. 6.7 Phase 1 covers 11 hectares and will deliver flexible space for innovative start- ups, advanced manufacturing, and research and development (R&D). This phase will inform the future development of Phases Two and Three, which will utilise the remaining 15 hectares.
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The project is expected to significantly enhance economic and skills opportunities in line with Tay Cities Regional Economic Strategy and Perth and Kinross Economic Action Plan. The enabling infrastructure will also unlock development capacity for approximately 1,000 new homes including 25% affordable housing. 6.8 A Project Board and Team are in place and progress has been made across all core workstreams. Progress update Land and Developer Contributions 6.9 Heads of Terms has been developed with the landowner, John Dewar Lamberkin Trust (JDLT). These address the transfer of land for PEIP Phase 1 and ensure £13 million of contributions are made towards enabling infrastructure. Works is now progressing towards full contractual agreements anticipated in September 2026. JDLT has indicated that good progress is being made in relation to housing development which will be the source of the developer contributions. Planning and Works 6.10 Pre-construction works including undertaking outline design and preparation and submission of the planning application will be completed by July 2026. The cost estimate for the Final Outline Design will be prepared by June 2026. High level costs are still estimated at £33 million. The next step is to procure a contract for the detailed design and subsequent construction of the enabling works. Tay Cities Deal (TCD) Grant 6.11 A £5 million allocation has been secured for mobility-related innovation infrastructure in the PEIP and linking to Glasgow Road. The Outline Business Case was approved in Summer 2025, and a Full Business Case will be submitted in March 2026 with a decision expected in December 2026. Commercialisation 6.12 Marketing activity has begun to attract developers and occupiers. A promotional brochure (included in Appendix 3 of the attached report in Appendix II) and our appointed agent has started discussions with interested parties. These will intensify as the delivery timetable becomes more certain. To complete the capital funding package, £5 million still requires to be secured. It is anticipated that this will be achieved through ground lease income generated by the PEIP.
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Programme 6.13 An indicative programme with key milestones is provided below: Perth West Masterplan to the Economy and Infrastructure Committee - April 2026 Planning application submitted - June 2026 Completion of Outline Design - July 2026 Planning decision - September 2026 Land Transfer & Contributions Agreement in Principle - September 2026 TCD Joint Committee (FBC decision) - December 2026 Detailed Design begins (Two stage Design and Build Contract) – September 2026 Construction commences – March 2027 Main construction complete – September 2028 6.14 The programme will be delivered through a staged gateway process as detailed below. Gateway 1 – By September 2026 Activity Conditions Preparation of a procurement strategy for a two stage Design & Build (D&B) contract Award of D&B contract, and commencement of Stage 1 (Detailed Design) Subject to Council approval of additional £1.5 million and approval of procurement strategy Gateway 2 – By December 2026 Undertake advance construction works as part of Stage 1 e.g. site clearance, utility diversions Subject to Planning consent, approval of FBC by TCD (full funding in place) and contract in place with JDLT. Gateway 3 – By February 2027 Notice to proceed to Stage 2 (Construction), with main works commencing March 2027 Subject to: Any remaining consents or licenses in place 6.15 The Council is asked to agree to proceed with the programme of works, delivered through the staged gateways as outlined in the report. The Council is asked to proceed with Gateway 1 including the use of £1.5 million from the previously approved £10 million allocation to procure detailed design (and construction) contract required to progress the enabling works.
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7. Capital Budget 2025/26 to 2030/31 Adjustments to Resources 7.1 The Scottish Government Capital Grant settlement for 2026/27 does not include the allocation of ring-fenced grant for Active Travel at this stage, with the allocations to be issued early in the new financial year. Therefore, no adjustment to the £600,000 previously assumed for 2026/27 is proposed at this stage, and this will be reviewed once the actual allocations are received in due course. 7.2 Further, the annual allocations for the Priority Flood Schemes have not yet been issued, and these are also expected early in the new year. In the meantime, based on amounts received in previous years, it has been assumed that the Council’s remaining allocation will be received in 2027/28. 7.3 After taking account of the ring-fenced and flood grants, the General Capital Grant allocation for 2026/27 is £269,000 lower than previously assumed, and it is proposed that this is funded from Unallocated Resources. 7.4 The amount of ring-fenced property disposals has increased by £750,000 in relation to one specific site, as outlined at Section 7.8 below. However, the level of Developer Contributions received over the last few years has been less than the amount estimated for each year. Consequently, the shortfall each year has been rolled-forward into subsequent years, resulting in the amount of Developer Contributions in the current budget being unrealistically high. 7.5 It is therefore proposed to reduce the annual estimated contributions across all years by a total of £6.244 million, with a corresponding reduction in Unallocated Resources in 2030/31. It is further proposed that the balance of Unallocated Resources in 2030/31 (£2,000) is amalgamated with the proposed Unallocated Resources in 2031/32 (as outlined in Section 8.13 below). Adjustments to Approved Budgets 7.6 The Finance and Resources Committee approved the last Capital Monitoring report for the Composite programme at its meeting on 4 February 2026 (Report No. 26/37 refers), covering the period up to 2030/31. Taking account of the adjustment to Unallocated Resources above (see paragraph 6.5), it is further proposed to transfer the balance of Unallocated Resources in 2025/26 (£4.474 million) to 2026/27, with no other priorities having been identified in the current year. 7.7 As part of the review of the Perth Eco-Innovation Park outlined at Section 6, the budget for the project has been rephased, however, these re-phasings remain subject to ongoing review.
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Further, within Customer and Digital there has also been some rephasing of expenditure between years as part of the review undertaken in determining the requirements for 2031/32, as detailed at Section 8.10. 7.8 Further, the Council has been approached about selling land in Glover Street, Perth. However, this is conditional on the Council undertaking all site enablement works and down takings prior to the sale concluding. Detailed design work will therefore be required to be undertaken in advance of these works. It is therefore proposed to include £750,000 in the programme in 2026/27 for these works and professional fees, and funded by the ring-fenced receipt. 8. Capital Budget 2031/32 Resources 8.1 It is currently estimated that the Council will have total new capital resources of £45.100 million available for the Composite Programme in 2031/32 which is summarised in Table 4 below. Table 4 - Estimated New Resources 2031/32 2031/32 £m Long Term Borrowing 29.5 General Capital Grant 13.0 Ring Fenced Grant – Active Travel 0.6 Developer Contributions 2.0 Property Disposals 0.0 TOTAL RESOURCES 45.1 8.2 Under the Local Government in Scotland Act 2003 and the Prudential Code, the Council is required to determine how much it can afford to allocate each year for capital expenditure. This includes determining how much it can afford to borrow, based on its Loan Charge Budgets and forecasts of interest rates. 8.3 Based on the approved Loans Fund and Capital Fund Strategy within the Medium-Term Financial Plan, including the top-slicing of 1.25% of Council Tax to increase the Loan Charges budget, it has been determined that £29.5 million of new borrowing is available to support the 2031/32 Composite Capital Programme. 8.4 The level of General Capital Grant for 2031/32 has been estimated at £14.6 million. After allowing for the annual amount which is applied in the Revenue Budget (£1.6 million), the balance of £13.0 million is available for the Capital Programme. 8.5 These amounts are based on recent allocations, with no inflationary uplift applied. It has also been assumed that the ring-fenced Capital Grant for Active Travel will continue in 2031/32 at an assumed level of £600,000.
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However, it should be noted that the Scottish Government has not announced allocations for Capital Grants beyond 2026/27, therefore there remains uncertainty over the actual level to be received in each subsequent year to 2031/32. 8.6 Developer Contributions of £2 million have also been assumed in 2031/32. This is the same amount as the estimates included in the years leading up to 2031/32 in the current Capital Programme following the review outlined in paragraph 6.4. However, the amounts receivable remains uncertain and variable and are dependent on the rate of local house building. There are no additional Third Party or Revenue Contributions assumed at this stage. This reflects the expenditure proposals outlined in Section 8.9 relating to annual programmes only. Contributions may therefore be identified once specific work programmes are developed over time. 8.7 There are also no receipts assumed at this stage from property disposals, with fewer surplus properties being identified in recent years. This will also be kept under review over the coming years. 8.8 However, Third Party Developer Contributions of £1 million and receipts of £650,000 have been included in the programme for 2031/32 in relation to the Perth Eco-Innovation Park at Perth West. These are part of the original funding strategy for this project, with receipts forecast for several years beyond the end of current budgeted 6-year programme. Therefore, these receipts are ring-fenced for this project and are not available for distribution and have not been included in the New Resources in Table 4 above, however they have been included in the total Resources at Appendix III.
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Expenditure 8.9 Given the constrained resources available, it is proposed that the available funds are only allocated to ongoing annual rolling programmes in 2031/32 in line with recent annual allocations, with no amounts allocated for new projects. The proposed annual allocations are set out in Table 5 as follows: Table 5 - Proposed Allocation of Resources 2031/32 £m Structural Maintenance 11.000 Bridges and Parapet Refurbishments 2.500 Footways 0.425 Road Safety 0.450 Traffic Signals 0.125 Street Lighting 0.600 Play Area Improvements 0.500 Community Greenspace 0.500 Cemetery Extensions 0.200 ICT Infrastructure, Supporting Digital and Data Analytics 5.852 Schools Audio Visual Equipment 1.141 Property (including School Estate) 11.000 Health and Social Care Telecare 1.000 Health and Social Care – OT Equipment 0.350 IT Licences (Health and Social Care) 0.070 Software Licences (Revenues & Benefits) 0.105 TOTAL 35.818 8.9 The ICT Infrastructure, Supporting Digital, Data Analytics and Schools AV Programmes have been reviewed and reprofiled. This includes increased Microsoft licensing within the ICT Infrastructure Programme, as well as removing applications which have (or will) be superseded by the increased use of Microsoft tools and the move to the new network model. The increased level of Microsoft licensing helps enforce data security, compliance and data protection controls, reducing risk around loss of sensitive data. This review has also led to some rephasing of the allocations across all six years of the programme. 8.10 The assumed Scottish Government ring-fenced Capital Grant of £600,000 for Active Travel projects (previously Cycling Walking and Safer Streets) has also been included in 2031/32. Any differences in the actual amount of grant allocated in each year will be adjusted once the allocations are announced.
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8.11 A summary of the overall proposed allocations from the available resources are shown in Table 6 below: Table 6 – Summary of the Allocation of new Resources £ million Annual Allocation for Programmes 2031/32 (Section 8.9) 35.818 Active Travel – Ring Fenced Expenditure 2031/32 (Section 8.11) 0.600 Unallocated Resources 2031/32 (see Section 8.13 below) 8.682 TOTAL NEW RESOURCES 2031/32 (Section 8.1) 45.100 8.12 The Finance and Resources Committee has approved the principle of retaining any budget savings as Unallocated Resources, pending the identification and consideration of future priorities. It is therefore proposed that the balance of available resources of £8.682 million after the allocation to annual programmes is added to the Unallocated Resources in 2031/32. 8.13 In addition to the programmes above, it is proposed to include several programmes in 2031/32 which are funded by “Prudential Borrowing”, and the following programmes are proposed: Fleet Vehicle Replacement Programme - £3.5 million for Vehicle Purchases, less £350,000 of estimated vehicle disposals. Wheeled Bin Replacement Programme - £225,000 for Domestic wheeled Bins and £25,000 for Commercial Wheeled Bins. Recycling Skips and Containers - £75,000 Litter Bins - £55,000 Energy Conservation and Carbon Reduction - £150,000. 8.14 All the above projects are included in the proposed Composite Capital Budget for 2026/27 to 2031/32 shown at Appendix IV. This shows that the Council’s proposed total gross investment on the Composite Capital Programme in the six years to 2031/32 amounts to £491.827 million. 9. Funding Strategy 9.1 The funding of the Composite programme will be managed by the continuation of the Capital Fund Strategy over the medium to long term. This includes continuing the top-slicing of 1.25% of the Council Tax each year to increase the Loan Charges Budget. This covers the ongoing annual borrowing costs for all current and historic capital expenditure over the life of the borrowing, whilst also allowing for an annual uplift in new borrowing in future years to ensure the Council’s Capital Plans are sustainable and sufficient to meet future priorities. 9.2 Updated Loan Charge estimates were included in the Prudential Indicators within the Annual Treasury Strategy report was considered by the Council on 25 February 2026 (Report No. 26/53 refers).
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These Loans Fund and Capital Fund estimates show that the proposed capital plans in this report are affordable, prudent and sustainable. 9.3 The projected Capital Fund balances are gradually applied over the next 10 years, with a projected remaining balance on the Fund of around £5 million by the mid-2030’s. Subsequently the balances are then projected to initially increase before reducing again until being fully applied around 2071/72. This is due to the last borrowing using the historic annuity rate (in 2023/24) being fully repaid around that time. However, after this point, all remaining borrowing is based on the new annuity rate (4%), resulting in a smoother annual profile and avoiding the large increase in latter years under the historic method. 9.4 The estimated annual Loan Charges and Prudential Indicators will continue to be updated and reviewed, and reported to the Finance and Resources Committee as part of the Treasury Activity & Compliance reports during 2026/27. Whilst projections indicate that the Capital Fund may be fully applied around the 2070s, the Capital Fund position will be closely monitored and managed to mitigate, and potentially avoid, future projected deficits. 10. Impact Value Assessment Impact and Value Assessment 11. Appendices Appendix I – Asset Overview Appendix II – Perth Eco-Innovation Park Appendix III – Capital Resources 2026/27 to 2031/32 Appendix IV – Proposed Composite Capital Budget 2026/27 to 2031/32