EHDC Committee Library Report: Capital Programme Update 2001/2 to 2004/5

Report No: R35/01 - 05 December 2001 - Final Copy

Cabinet
Capital Programme Update 2001/2 to 2004/5
Report of Corporate Director (Business & Economy)

For Decision

Purpose of Report:

The aim of this report is to bring together the Council's overall policy on Capital now that the Council is debt free. It updates the existing programme, identifies additional schemes, and proposes a way forward with regard to schemes funded from Developers' Contributions.

Recommendations:

It is recommended that Council:

approve the changes to the existing Capital Programme, and new provisions as outlined in Paragraphs 4, 5 and 6.

Resourcing Implications:

The resourcing implications of this report comprise Capital Expenditure for the period 2001/02 to 2004/05 of £19.194m, and highlights unallocated Capital resources amounting to £6.538m

Body of Report:

1.0 Introduction

1.1The Capital Programme was last reviewed by Cabinet on 4th July, 2001, (report R.19/01 refers). This report provides Cabinet with the latest assessment of the capital programme over the period 2001/02 - 2002/03 including building in of the Housing components as agreed at the November Cabinet and proposes an extension of the programme to 2004/05 in the light of becoming debt free (paragraph 4)

The report also discusses, a new treatment for developers' contributions (paragraph 5), and new schemes to be added to the programme (paragraph 6)

Revision of the Programme 2001/02 - 2002/03

2.0 Expenditure

2.1 The capital programme previously approved in July is shown in Appendix A, together with an estimate of the current position for each scheme. Appendix A is split into 3 sections; the left-hand section shows the approved programme, the centre section shows any changes to the total scheme cost and the right hand section shows the latest estimated phasing of the remainder of the approved expenditure

2.2 Details of the expenditure variations that have occurred since the programme was last reviewed are contained in Appendix B and are summarised below:

Estimated Capital Spend July 2001 £ 8.552m

Add additional items since July £10.642m

Estimated Capital Spend December 2001 £19.194m

3.0 Resources

3.1 The resources available to finance the existing programme have been re-assessed to the end of 2004/05. These are estimated to be £25.732m which represents an increase of £17.186m since the July report. The composition of this increase is shown below:

3.2 Capital Receipts (£2.121m): Mainly EHHA Right to buy receipts (2003/04 & 2004/05)

3.3 Government Subsidy (£286k): Contribution towards Disabled Facility Grants (2003/4 & 2004/05)

3.4 Revenue Contributions towards Capital Expenditure and release of Reserves (£261k)

3.5 Developers Contributions (£518k)

3.6 Provision for Credit Liabilities arising from becoming Debt Free (£14m)

4.0 Extension of Programme out to 2004/05 as a result of becoming Debt Free

4.1 On 23rd November 2000, the last of the Council's long term loans were repaid, making the Council "debt free" in accordance with the definitions set out within the capital controls regime. One of the main positive outcomes of achieving this status, is the release of £14m of capital receipts that were previously set aside for debt repayment.

4.2 Under the previous Council structures, members had agreed, in principle, to utilise the additional resources for Local Authority Social Housing Grant (LASHG), as this has no detrimental effect on the Council's cash reserves. This means that the Council can spend £14m on LASHG which will not adversely affect the Council's cash position because all the expenditure is re-imbursed by the Housing Corporation. The Cabinet is asked to confirm that this continues to be the first call on the released capital receipts.

4.3 In March 2000, the then Housing Sub Committee (Report COM 11/00 refers) was advised that additional resources totalling £11.825m would be made available at a future time, and they agreed, at that time, to utilise this at a rate of £2m per annum. The latest position shows that £14m has been made available, and Cabinet is asked to endorse the proposal that sums of £3m (2002/03) and £3.5m (2003/04 and 2004/05) be used on LASHG. This would allow the existing level of support to Housing Associations to continue at £3m per annum with an additional £1m being made available across 2003/04 and 2004/05 to allow for the schemes at Lord Mayor Treloar Alton ,and Ramshill Peterfield.

4.4 The Private Sector Housing grants programme has also been extended into 2003/4 and 2004/05 at the same base level as the previous years (ie £250,000 for Disabled Facilities grants and £113,000 for other discretionary grants, including Homecheck).

5.0 Developers' Contributions

5.1 Under the current arrangements, each time a developer's contribution is agreed to be paid to a third party, approval is required from the Full Council, because the total of the Capital Programme changes. A better way of managing this process, is to add the total value of received but uncommited developers' contributions to the programme. The control total for the Capital programme will not alter on each occasion that the Cabinet or an Area Committee approves a release for a specific scheme, therefore the budgetary framework will remain unaltered, and this will eliminate the need for full Council to approve the Capital Programme for the release of individual Developers' Contributions.

6.0 New Schemes to be added to the programme

6.1 The Council has a liability to maintain some of the banks of Tilmore Brook, Petersfield where it passes through the Herne Farm estate. The liability arises as the Council assumed responsibility as riparian owner of the bank when this area was adopted as public open space.

During the high flows experienced last winter, parts of the bank collapsed and it is probable that further collapses will occur in the future if no action is taken. A serious collapse could block the stream leading to upsteam flooding.

The river is a main watercourse and therefore Environment Agency (EA) consent is required prior to works commencing. Consultants have been employed to design remedial works which will meet the EA criteria and it is felt prudent to set aside resources in the sum of £300K for this work.

In addition the Council owns the narrow strip of land along the bank of the river running alongside Petersfield outdoor pool. The reasons for this are unknown, however it is believed East Hampshire District Council assumed the responsibility from the Petersfield Urban District Council when it was formed in 1974. There have also been bank collapses at this point and it will be necessary to dismantle the boundary wall of the pool to make good the bank. Undertaking this work and making good the pool walls is estimated at 50K.

A total sum of £350k has been included in the Programme for these costs. Officers will report back in the future on the exact scheme requirements to enable formal approval of the scheme.

6.2 The Council has powers to purchase the land at Bowleswood to finally resolve this issue. A sum of £50k has been included in the programme for this purchase, to be resourced by the enforcement provision also in the sum of £50k. The details of the purchase will be reported to enable formal approval of the purchase.

6.3 The Capital Strategy & The Asset Management Plan (AMP) was approved by the Cabinet in July (report R20/01 refers). Arising from this approval is a requirement to maintain the council's assets that are to be retained. A provisional assessment of the overall costs indicates that a sum of £350k will be required over the next 5 years to achieve the targets identified in the AMP. A sum of £70k per annum has been included in the programme for 2002/03 onwards, with the detail on the nature of the spend to follow at a future date.

6.4 Central Area Community Committee on the 2nd October (Report V6/01 refers) agreed an action improvement plan for Petersfield Market which included the introduction of an electricity supply as part of the joint HCC/EHDC improvements to the Square. Whilst the scheme is much larger, the cost falling on EHDC is estimated to be £15k. Details of the scheme are being worked up and will be reported back when finalised.

6.5 Report COM 51/01 shown elsewhere on todays agenda seeks approval to spend the balance of the Sports Centres Maintenance Reserve in the sum of £211k. This sum has therefore been included within the totals for this report.

6.6 Report COM 52/01 shown elsewhere on todays agenda seeks approval to make a capital grant of £401k as part of the terms of the new Leisure Management Contract. This sum has therefore been included within the totals for this report.

7.0 Summary Position 2001/02 to 2004/05

7.1 Taking all of the above into account the summary position is as follows:-

Total Expenditure over period £19.194m

Total Resources over period £25.732m

Surplus Resources over period £ 6.538m

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Contact Officer: Alan Gibbs

Designation: Financial Accounts Manager

Telephone: (01730) 234121

E-mail: Alan_Gibbs@easthants.gov.uk

Consultation:

Background Papers:

Documents for Download:	Click here for DecreportAppendixA.123 (63 Kb) Click here for DecReportAppendixB.WK4 (5 Kb) Click here for DECREPORTAPPENDIXA.pdf (28 Kb) Click here for DECREPORTAPPENDIXB.pdf (11 Kb)

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