Item 18 - HRA Capital BCR Period 3
West Dunbartonshire Council · 21 August 2024
Back to Housing & Communities Committee — 21 August 2024 and its agenda
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WEST DUNBARTONSHIRE COUNCIL Report by the Chief Officer - Resources Housing and Communities Committee: 21 August 2024 ___________________________________________________________________ Subject: Housing Revenue Account (HRA) Capital Budgetary Control Report to 30 June 2024 (Period 3) 1. Purpose 1.1 This report provides an update on the HRA capital programme to 30 June 2024. 2. Recommendations 2.1 Committee is asked to: i) Note the current position of the 2024/25 HRA capital budget and the HRA capital plan. ii) Note that in year financial performance is monitored against a 2024/25 capital expenditure budget of £73.664m and a 2024/25 capital income budget of £10.003m. iii) Note that project life performance is monitored against a project life expenditure budget of £319.738m and a project life income budget of £54.577m iv) Note that all projects are currently on track regarding achieving the planned completion dates and delivering within the updated capital budget. v) Approve the procurement and award of the CCTV upgrade project by the Chief Officer – Housing and Employability in consultation with the Procurement Manager, as set out in paragraph 4.4, to appoint the contractor of the returned tender if the contract cost being within the approved budget and the tender being in line with normal tender parameters. 3. Background 3.1 On 6 March 2024 the Council approved the updated Housing Revenue Account Capital Plan for 2024/2025 to 2028/2029. 3.3 Since then budget adjustments have taken place to bring forward in year project under/over spends during 23/24, to reflect up to date information on progress delivering the plan and any need for budget acceleration and budget deceleration from / to future years, and to update the expenditure and income budgets for Affordable Housing Supply projects to reflect the 2023/2024 outturn and to reflect that the most recent cost and income forecasts The ITEM 18
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budget adjustments result in revised capital budgets as set out in Exhibit 1. Members will note that the prudential borrowing requirement for current HRA capital projects has reduced by £5.901m since Council approved the HRA capital plan in March 2024. The reduced borrowing requirement mainly reflects an upward revision to the amount of Affordable Housing Supply grant income following recent discussions with Scottish Government officials. Exhibit 1: Revised HRA Capital Budget 2024/2025 – 20278/2029 2024/25 BCR03 (£m) Project Life BCR03 (£m) Project Life March 24 (£m) Other Capital Expenditure 7.165 27.129 27.180 Major Component Replacement 19.795 92.604 92.604 Void Capital 4.902 19.212 20.712 Structural & Environmental 2.767 14.175 14.175 Support Costs 2.761 14.367 14.367 Affordable Housing Supply Programme 36.274 152.251 149.053 Total Expenditure 73.664 319.738 318.091 Total Income 10.003 54.577 47.029 Prudential Borrowing 63.661 265.161 271.062 4. Main Issues 4.1 Progress against the 2024/25 capital plan is detailed in: Appendix 1 – Project Life Summary Appendix 2 – All Approved Projects 4.2 The overall programme summary report at Appendix 1 shows that at this early stage in the financial year planned expenditure and planned income are both in line with budget. Appendix 1 reports that there are twenty-nine capital projects where expenditure / income budget is tracked over the multi-year life of the project and twenty-eight projects classified as rolling programme projects, which is programmes of work where an annual budget is set each year that takes account of demand, cost, and affordability. 4.3 Appendix 2 shows all projects with approved in year and project life budgets as well as forecast expenditure / income. The appendix highlights a 2024/25 expenditure budget of £73.664m and a forecast spend of £73.664m. The 2024/25 income budget is £10.003m with a forecast income of £10.003m. Budget assumptions are required to forecast costs / income, especially where projects span multi-year and project finances have yet to be finalised. It is therefore likely that the projected year end budgetary position will change during the year. 4.4 The council has secured funding of £681,000 from UK Shared Prosperity Fund and this is being matched by £750,000 of HRA capital funding to upgrade the current CCTV network provision. The upgrade works will significantly improve existing technical capability and quality of CCTV provision.
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Council officers have developed a strategy to appoint an experienced and capable contractor to undertake the works using the Crown Commercial Services Framework Agreement. 5. Option Appraisal 5.1 No option appraisal was required for this report. 6. People Implications 6.1 There are no people implications. 7. Financial and Procurement Implications 7.1 The report notes the projected in-year financial position for capital budgets. 8. Risk Analysis 8.1 The main risks are as follows: (a) The reported variances should be viewed in the knowledge that there are a number of variable factors which could arise between now and 31 March which could affect the year end results for capital budgets. (b) Because of current market conditions, inflation is at an all-time high and interest rates continue to be volatile. To forecast for the full year costs budget assumptions have been required. These assumptions continue to change regularly and therefore it is likely the projected year end budgetary position will change from that reported. 9. Equalities Impact Assessment (EIA) 9.1 No equalities impact assessment was required in relation to this report. 10. Environmental Sustainability 10.1 No assessment of environmental sustainability was required in relation to this report. 11. Consultation 11.1 All services involved in delivering the capital budgets have been consulted in the compilation of this report. 12. Strategic Assessment 12.1 Proper budgetary control and sound financial practice are cornerstones of good governance and support Council and officers to pursue the strategic priorities of the Council’s current Strategic Plan. This report forms part of the financial governance of the Council. ________________
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Laurence Slavin Chief Officer – Resources Date: 21 August 2024 Person to Contact: Jim McCarron Business Partner, Finance E-mail: james.mccarron@west-dunbarton.gov.uk Appendices: Appendix 1 - Project Life Summary Appendix 2- Details of all Projects Background Papers: Housing Revenue Account (HRA) Capital Investment Programme, Revenue Budget, and Rent Levels for 2024/25 - Council 6 March 2024. Wards Affected All Wards