Agenda item

Capital and Investment Strategy (2023-24 to 2027-28)

Decision:

Subject to Council approving the budget on 8 February 2023:

1) That the £500,000 allocated in respect of the Bus Station relocation scheme (Scheme no. P17 (p)) be removed from the provisional capital programme.

2) That the new bids, as shown in paragraph 4.13 of this report be approved for inclusion in the capital programme as indicated.

Recommended to Council on 8 February:

1) That the General Fund and HRA capital estimates, as shown in appendices 2 and 3, as amended to include such bids as may be approved by the Executive at its meeting on 26 January 2023, be approved

2) That the Minimum Revenue Provision policy, referred to in section 5 of this report, be approved.

3) That the capital and investment strategy be approved, specifically the investment strategy and Prudential Indicators contained within the report and in Appendix 1.

4) That the updated flexible use of capital receipts policy at Appendix 8 be approved.

Reason(s):

· To enable the Council to approve the capital and investment strategy for 2023-24 to 2027-28

· To enable the Council, at its budget meeting on 8 February 2023, to approve the funding required for the new capital schemes propose

Other options considered and rejected by the Executive:

None.

Details of any conflict of interest declared by the Leader or lead councillors and any dispensation granted:

None.

Minutes:

The Chairman advised that this report had also been considered by the Corporate Governance and Standards Committee on 19 January 2023 and the Joint Executive Advisory Board on 24 January 2023. The comments arising from those two meetings were set out in the Supplementary Information Sheet.

The Deputy Leader of the Council and Lead Councillor for Finance and Planning Policy introduced the report.

The Executive heard that the Local Government Finance Act 2003 required all councils to have an approved investment strategy that paid regard to the CIPFA Management Code of Practice and the CIPFA Prudential Code.

The Council had an ambitious capital programme supporting investment into services and standalone projects supporting its corporate objectives of regeneration, delivering homes and the infrastructure to enable the local economy to fulfil its potential. There was currently a high risk to the affordability of the Council’s capital programme as borrowing would need to increase significantly and external funding sources utilised despite the volatility of interest rates. Those projects set out in the provisional capital programme would require further Executive endorsement before they could be progressed. New project proposals were set out in the report including, significantly for the General Fund, upgrades to the Spectrum Leisure Centre and funding to facilitate the operational move of the depot. Both projects would undergo business case scrutiny, including potentially repositioning the depot cost to the Weyside Urban Village Project.

There would be a further £20 million investment in the Council’s housing stock during the period 2023-24 adding to the £24.5 million spent during 2022-23 which would be funded from reserves. There would be £145 million remaining in the Housing Revenue Account Business Plan to spend either on further improvements or acquiring additional stock, potentially from Guildford Park Road or Weyside Urban Village.

The capital programme would have revenue implications for up to fifty years with regard to infrastructure projects. The Chief Finance Officer must be assured that the programme was prudent, affordable and sustainable. Therefore, the report was measured against several prudential indicators as set out in the report.

Although the Council was experiencing financial pressure due to the external economic circumstances, there had been benefits such as the increase in value of the asset base in the last year by around £60 million, whilst debt had reduced by £40 million. The net asset position was over three-quarters of £1 billion, whilst peak borrowing was projected to remain under 30%.

The Executive was asked to consider removing the relocation of the bus station budget as, although there was uncertainty over the future redevelopment of North Street, the Council would not undertake such a project independently.

The prudential indicators, minimum revenue provision policy and the Capital and Investment Strategy remained unchanged. The flexible use of capital receipts policy was updated to cover costs associated with the collaboration with Waverley Borough Council.

There was a provisional capital entry in the report of £1.35 million to spend on North Street by 2030 which was queried. There would be a thorough ongoing review of capital expenditure and an answer to the North Street question would be provided either prior to or at full Council on 8 February.

It was noted that Council had recently been through a restructure at management level whilst experiencing unprecedented external financial pressures and officers were commended for their work. The Executive

RESOLVED: