Issue - meetings

To consider the report of the Chief Finance Officer.

Corporate Services Scrutiny Committee considered the report at its meeting on 27 June 2019 and its comments will be reported. (The appendices were previously circulated to the Scrutiny Committee on the above date).

The Executive received a report, which had already been considered by Corporate Services Scrutiny Committee on 27 June 2019 and advised Members of the Council’s overall financial performance of the capital programme for the 2018/19 financial year and sought approval of the 2019/20 revised capital programme.  Members’ attention was drawn to the detailed minutes of Corporate Services Scrutiny which had been circulated.

Particular reference was made to the request for an additional budget of £10m from the capital fund to invest in potential commercial opportunities, as the previously approved budget had been used to purchase a commercial property which, it was noted, would generate income for the Council.  

RECOMMENDED that Council approve:-

(1)          The overall financial position for the 2018/19 annual capital programme;

(2)          The amendments and further funding requests to the Council’s annual capital programme for 2019/20; and

(3)          An additional £10 Million to allow consideration of any further potential commercial opportunities if they arise.

To consider the report of the Chief Finance Officer.

The Chief Finance Officer presented the report which advised Members of the Council’s overall financial performance of the capital programme for the 2018/19 financial year and sought approval of the 2019/20 revised capital programme. Local authorities were required to estimate the total of capital expenditure that it planned to incur during the financial year.Capital expenditure was a significant source of risk and uncertainty, with cost variations, delays and changing specifications being often features of large and complex capital projects. The annual capital programme was updated every three months to show cost variations, changes or acceleration of projects, to help manage risk.

Members were referred to the changes to the Capital Programme since March 2019, listed in the report, highlighting that the in-year capital expenditure was £17,033,202 and had been reduced by £3million from budget. The capital expenditure had been divided into £10,835,944 for the General Fund Total and £6,197,258 for the Housing Revenue Account (HRA) Total.

The Chief Finance Officer highlighted the deferred schemes detailed in the report noting that Members could speak to the Project Managers to explain why a scheme was deferred. He referred Members to the requests for additional funding and explained each as follows:-

·         £150,000 for the Energy Saving Projects, to support the new oil boiler replacement at the Corn Exchange and the LED lighting at John Lewis/Leighton Terrace Car Park. These would be financed by Salix Finance Ltd who provided interest-free Government funding to the public sector to improve their energy efficiency.

·         £50,000 for the agile and flexible working project, as part of the EX1 Internal Transformational Change Programme. It was proposed that the money be funded by Revenue Contribution to Capital Outlay, which was already set aside in the Transformation Fund.

·         £11,000 to upgrade the Oracle Weblogic, to ensure Exeter City Council was in line with the PSN (Public Services Network) requirements and allow for required maintenance and updates.

He explained, that there was an additional request, which was not shown in the report, to approve an additional budget of £10million from the Capital Fund, to invest in potential commercial opportunities. The existing investment budget was being used and would provide support to the local economy and generate an expected annual income of £591,000, to the Council.

In response to questions from Members, the Chief Finance Officer and the Corporate Manager Democratic & Civic Support responded, that:-

·         The purchase of the commercial office block, would be a multiple tenant building that would provide a good return on the investment. The capital receipts would partially offset the cost and allow for a smaller amount of borrowing.

·         The Leisure Complex and Bus Station Construction had provisions in place and was carefully monitored, in the event that the contractors change. Contractors were never paid in advance, only upon completion of stages of the work.

·         Council had previously approved £100,000 to the Pinhoe Community Hub and had paid £10,000 upfront. Further payments would made to top up the float, until the work was completed, and the final  ...  view the full minutes text for item 24