Archived decisions

    Appendix 9

Capital spending and financing 2004/05

1 Capital expenditure

1.1 Table 1 below shows that over 86% of the capital programme for 2004/05 was started in the year. It also shows the value of schemes for which approval to carry forward to 2005/06 is requested, together with the associated cash limit.

Table 1 - Capital schemes started in 2004/05

 

£000

%

     

Approved value of the capital programme for 2004/05

167,847

100.0%

   

Schemes started in 2004/05

144,737

86.2%

 

-----------

---------

Balance of cash limit at 31 March 2005

23,110

13.8%

 

-----------

---------

     

Schemes for which approval to carry forward to 2005/06

   

is requested

12,740

 
     

Schemes already approved for carry forward

7,206

 
     

Balance of cash limit remaining to meet inflation costs

3,164

 
 

-----------

 

Cash limit to be carried forward to 2005/06

23,110

 
 

-----------

 
     

1.2 The majority of the capital programme is controlled on a `starts' basis in which the full estimated cost of the scheme is charged against the service's capital cash limit for the year in which the scheme is started. For the first time in 2004/05, some schemes were controlled on an `expenditure' basis, whereby the amount actually spent in the year is charged against the cash limit. This method of control is more appropriate for some lump sum provisions and block votes. The total of £144.737m shown in Table 1 for the schemes started in 2004/05 is an aggregate for both `starts' and `expenditure' schemes.

1.3 An analysis by service of the figures in Table 1 is provided in the attached Annex 1.

2 Carry forward of schemes not started by 31 March 2005

2.1 The Leader agreed in April 2005 the principle of carrying forward capital schemes which were planned to start by 31 March 2005 but, for various reasons, will not start until 2005/06. This agreement was subject to the cost of such schemes being accommodated within services' approved programme limits. Details of the schemes that it is now proposed should be carried forward in accordance with that decision are included in Annex 2.

2.2 The total value of schemes to be carried forward is £23.1m. This includes £7.2m of Education schemes which have previously been approved for carry forward to 2005/06 during the course of the year.

2.3 As Table 2 shows, the proportion of the 2004/05 programme that has been started in the year, at 86.2%, is similar to the level achieved since steps were taken during 2001 to improve the delivery of the programme.

Table 2 - Percentage of capital programme started

           
 

2000/01

2001/02

2002/03

2003/04

2004/05

 

£m

£m

£m

£m

 

Value of projects

         

- started

70.5

128.7

110.6

212.6

144.7

- carried forward

34.7

20.4

22.5

29.2

23.1

 

--------

--------

--------

--------

--------

Total programme

105.2

149.1

133.1

241.8

167.8

 

--------

--------

--------

--------

--------

           

Percentage started

67.0%

86.3%

83.1%

87.9%

86.2%

           

2.4 The programme for 2004/05 at £167.8m is lower than the total originally approved for 2004/05 of £255m primarily because the South Hampshire Rapid Transit scheme has been deleted following the Government's decision not to increase its level of support and pending the outcome of the subsequent review of the scheme. The higher level of the programme in 2003/04, shown in Table 2, reflects the inclusion of the £60m ENHANCE scheme to provide nursing care accommodation.

3 Reasons for schemes not starting by 31 March 2005

3.1 The full reasons for not starting each scheme during the year are listed in Annex 2. Some are dependent upon specific negotiations and arrangements being made with third parties. In total, approval is now sought to carry forward 91 individual schemes and block provisions, in addition to the nine Education schemes for which approval has already been given.

3.2 The schemes listed in Annex 2 can be carried forward to 2005/06 subject to the latest estimated costs of the schemes being accommodated within the overall starts limits for 2005/06.

4 Capital expenditure and financing 2004/05

4.1 Total expenditure actually incurred in 2004/05, arising from the capital programme for 2004/05 and earlier years, was £208.4m. This is £5.6m or 2.8% more than the revised estimate. The timing of capital payments is difficult to predict and in most years slippage is greater than predicted. In 2004/05, however, the adjustment for slippage made to the gross forecasts of capital expenditure in the year proved to be a little overstated. As slippage from 2004/05 to 2005/06 has been less than expected, the higher than estimated level of expenditure in 2004/05 should be matched by an equivalent reduction in expenditure in 2005/06.

4.2 The proposed method of financing this expenditure is set out in Table 3 below:

Table 3 - Capital financing 2004/05

         
 

Adjusted

Actuals

Variation

Actual

 

revised

   

funding

 

estimate

     
 

Feb 2005

     
 

£000

£000

£000

%

Loan

       

- supported by revenue grant

60,076

61,260

1,184

29.4

- unsupported borrowing

22,760

21,097

-1,663

10.1

Government capital grants

45,555

41,269

-4,286

19.8

Contributions from developers

       

and outside agencies

37,332

42,098

4,766

20.2

Capital receipts

13,269

18,469

5,200

8.9

Capital reserve

3,267

4,788

1,521

2.3

Revenue reserves - trading

       

units, on-street parking and

       

insurance

8,117

7,007

-1,110

3.4

Revenue contributions

       

- General corporate provision

11,316

11,316

-

5.4

- Set aside by schools

1,134

1,134

-

0.5

 

-----------

-----------

-----------

-----------

 

202,826

208,438

5,612

100.0

 

-----------

-----------

-----------

-----------

         

4.3 The additional expenditure in 2004/05 has been funded by increased use of local resources, including taking £1.5m from the capital reserve a year earlier than originally planned.

5 Borrowing

5.1 Since 1 April 2004, local authorities have been permitted to borrow for capital purposes without specific approval from the Government, provided their actions meet the requirements of the Prudential Code for Capital Finance introduced by the Local Government Act 2003. Such borrowing does not attract any support from the Government towards the repayment and interest costs, which fall wholly on the County Council's own resources. Cabinet agreed criteria for the use of `prudential borrowing' in November 2003 and since then has approved the use of such borrowing for a number of capital schemes, primarily on an invest-to-save basis. A total of £21.1m will be borrowed in 2004/05 for these schemes. The County Council's position, following the 2004/05 outturn, under the prudential indicators prescribed by the Code is summarised in Appendix 6.

5.2 In addition, £61.3m of loans will be raised that will attract revenue grant support from the Government towards repayment and interest costs. The Government has also given £41.3m of capital grants towards expenditure in 2004/05.

6 Capital receipts

6.1 Capital receipts from the sale of land and property totalling £18.5m were obtained, as summarised in Annex 3. Services can retain 25% of capital receipts from the sale of their assets, with up to 100% for approved in/out schemes. Receipts from development account and county farm sales are retained for corporate use. In accordance with this policy, services' share of the capital receipts in 2004/05 now due to be allocated amounts to £107,000 as set out in Annex 4.

           

Annex 1

             
             

Analysis of capital programme 2004/05 and requests by services to carry forward capital schemes to 2004/05

             
 

(1)

(2)

(3)

(4)

(5)

(6)

 

Approved

Schemes

Schemes

Schemes

Cash limit

Cash limit

 

value of

started

for which

already

available

carried

 

programme

in

approval

approved

for carry

forward to

   

2004/05

to carry

for carry

forward

2005/06

     

forward

forward

to meet

(columns

     

is now

 

2005/06

3+4+5)

     

requested

 

inflation

 
             
 

£000

£000

£000

£000

£000

£000

             

Education

60,991

46,979

5,984

7,206

822

14,012

             

Environment

55,777

52,296

1,318

-

2,163

3,481

             

Policy and Resources

42,455

38,836

3,619

-

-

3,619

             

Recreation & Heritage

4,229

3,107

945

-

177

1,122

             

Social Services

4,395

3,519

874

-

2

876

             
 

----------

----------

----------

----------

----------

----------

 

167,847

144,737

12,740

7,206

3,164

23,110

 

----------

----------

----------

----------

----------

----------

             

         

Annex 2

Capital Programme 2004/05

         

Schemes not started by 31 March 2005

   
           

Schemes

Value

 

Latest

 

Reasons for Delay

 

£000

 

Start Date

 

 

 

 

 

 

 

 

Education

 

 

 

 

 

 

 

 

 

 

 

Havant Special

160

 

To be confirmed

 

Delays in obtaining planning permission

Whitchurch Primary

533

 

June 2005

 

Programme revised to start at beginning

 

 

 

 

 

of 2005/06

Kempshott Junior, Basingstoke

53

 

To be confirmed

 

Brief being agreed with school

Prices Trust

111

 

To be confirmed

 

Proposals for use to be considered by the

 

 

 

 

 

Executive Member for Education on

 

 

 

 

 

14 July 2005

Specialist status

 

 

 

 

 

Bay House Secondary, Gosport

100

 

)

 

)

Amery Hill Secondary, Alton

100

 

)

 

)

Alderman Quilley Secondary,

100

 

)

 

)

Eastleigh

   

)

 

)

John Hanson Secondary, Andover

100

 

)

 

)

The Petersfield Secondary

100

 

) To be

 

) Developing brief with schools, many

Priestlands Secondary, Lymington

100

 

) confirmed

 

) of which are part of larger projects and

Toynbee Secondary, Chandlers

100

 

)

 

) take longer to develop

Ford

   

)

 

)

Testwood Secondary, Totton

100

 

)

 

)

Brune Park Secondary, Gosport

100

 

)

 

)

Crestwood Secondary, Eastleigh

122

 

)

 

)

Eggars Secondary, Alton

100

 

)

 

)

Robert Mays Secondary, Odiham

100

 

)

 

)

Frogmore Secondary, Yateley

100

 

June 2005

 

)

Minor works

 

 

 

 

 

Ashley Infants

100

 

To be confirmed

 

On hold. Likely to be diverted to other

 

 

 

 

 

early years initiatives

The Butts Primary, Alton

50

 

July 2005

 

Programme revised to start at beginning

 

 

 

 

 

of 2005/06

Staff Facilities - contingency

20

 

Various

 

Funding was not allocated in 2004/05 and

 

 

 

 

 

will be added to the 2005/06 provision

 

 

 

 

 

for staff facilities

Minstead Study centre

165

 

July 2005

 

Scope of project reviewed following cost

 

 

 

 

 

increases

Connaught Secondary, Aldershot

30

 

To be confirmed

 

Brief to be agreed with school

Education - continued

         

 

 

 

 

 

 

SEED Challenge - contingency

 

 

 

 

 

Henry Cort Secondary, Fareham

19

 

July 2005

 

Programme revised to start at beginning

 

 

 

 

 

of 2005/06

Hordle Primary

97

 

To be confirmed

 

Voluntary Aided school's governors are

 

 

 

 

 

managing the project which is due to

 

 

 

 

 

be completed by September 2005

Mountbatten Secondary, Romsey

135

 

August 2005

 

Programme revised to start at beginning

 

 

 

 

 

of 2005/06

St Bernadette Primary, Cove

42

 

July 2005

 

Voluntary Aided school's governors are

 

 

 

 

 

managing the project which is due to

 

 

 

 

 

be completed by September 2005

Limington House Special,

43

 

June 2005

 

Programme revised to start at beginning

Basingstoke

 

 

 

 

of 2005/06

           

Education - continued

         
           

Denmead Junior

66

 

June 2005

 

Programme revised to start at beginning

 

 

 

 

 

of 2005/06

Modernisation - contingency

125

 

Various

 

Funding unallocated and carried forward

 

 

 

 

 

to add to overall capital programme

         

resources

Henry Cort Secondary, Fareham

94

 

July 2005

 

Programme revised to start at beginning

 

 

 

 

 

of 2005/06

Minstead Study Centre

211

 

July 2005

 

Scope of project reviewed following cost

 

 

 

 

 

increases

Staunton Park Community, Havant

121

 

To be confirmed

 

Pump priming provision for other

 

 

 

 

 

resources

Early education facilities

         

- permanent facilities

17

 

Various

 

)

- replace temporary facilities

97

 

Various

 

) Funding unallocated and carried forward

Management of falling rolls

559

 

Various

 

) to add to the provision for 2005/06

Management of health & safety

245

 

Various

 

)

 

 

 

 

 

 

Court Moor Secondary, Fleet

68

 

To be confirmed

 

Brief being agreed with school

West End Infant, Aldershot

76

 

To be confirmed

 

Brief being agreed with school

Wallop Primary

90

 

To be confirmed

 

Brief being agreed with school

Education - continued

         
           

Calmore Infant

438

 

May 2005

 

Programme revised to start at beginning

 

 

 

 

 

of 2005/06

Youth

 

 

 

 

 

Images, Dibden

20

 

To be confirmed

 

Awaiting Landlord's approval

New Milton Youth Centre

40

 

To be confirmed

 

Additional funds to be agreed

Chandlers Ford Youth Centre

34

 

To be confirmed

 

Awaiting Landlord's approval

 

 

 

 

 

 

East Hampshire Special School

248

 

May 2005

 

Programme revised to start at beginning

Review

 

 

 

 

of 2005/06

           

Furniture and equipment

26

 

Various

 

Allocated to schools but not yet spent

Schools Access Initiative

529

 

Various

 

Briefs to be agreed with schools

 

 

 

 

 

 

Total Education

5,984

 

 

 

9.8% of schemes approved to start

 

 

 

 

 

in 2004/05 to be carried forward

 

 

 

 

 

 

 

 

 

 

 

 

Environment

 

 

 

 

 

 

 

 

 

 

 

Structural maintenance

 

 

 

 

 

- locally resourced

578

 

)

 

)

- Government supported

453

 

)

 

)

Community safety initiative

37

 

)

 

)

Rural partnership schemes

65

 

) to be added

 

) Balance of provision for schemes

Passenger transport information

12

 

) to provisions

 

) controlled on an expenditure basis

Air quality and noise monitoring

19

 

) in 2005/06

 

) to be carried forward to 2005/06

Local Transport Plan monitoring

 127

 

) programme

 

)

and initiatives

   

)

 

)

Recreational cycling

27

 

)

 

)

 

 

 

 

 

 

Total Environment

1,318

 

 

 

2.4% of schemes approved to start

 

 

 

 

 

in 2004/05 to be carried forward

 

 

 

 

 

 

 

 

 

 

 

 

           
           

Policy and Resources

 

 

 

 

 

 

 

 

 

 

 

Economic Development

 

 

 

 

 

Aldershot Enterprise Centre

64

 

2005/06

 

Discussions with possible provider /

 

 

 

 

 

partners are in hand

Bordon / Whitehill redevelopment

5

 

May 2005

 

Agreement reached at end of 2004/05

 

 

 

 

 

to start early in 2005/06

Defence Heritage

 

 

 

 

 

M33 Minerva

73

 

2005/06

 

Mothballing

Fort Gilkicker

100

 

Not known

 

Ongoing negotiation to secure disposal

           

Coastal Conservation

 

 

 

 

 

Festival of the Sea display /

13

 

2005/06

 

Display to be completed for the Festival

consultation

 

 

 

 

of the Sea 2005

Coastal defence works 2003/04

20

 

2005/06

 

Emergency works not required in 2003/04

 

 

 

 

 

or 2004/05

Land Management

 

 

 

 

 

Minor schemes

22

 

2005/06

 

Staff shortages have delayed programme

 

 

 

 

 

implementation

Sites and Buildings

 

 

 

 

 

Office accommodation

203

 

Various

 

Resources retained to have strategic

 

 

 

 

 

impact when opportunity / need arises

Capital repairs

211

 

2005/06

 

Orders not placed for three schemes

 

 

 

 

 

until April 2005

New Deals for Schools

209

 

2005/06

 

Government funding requires that

 

 

 

 

 

resources are spent by August 2005

Advantageous land purchases

1,060

 

2005/06

 

To be transferred to capital repairs

 

 

 

 

 

in 2005/06

Advance fees

410

 

2005/06

 

Expected to be required in 2005/06

           

Businesses

 

 

 

 

 

Supplies

10

 

2005/06

 

) Various reasons, including

HC3S

100

 

2005/06

 

) awaiting final decisions from

Hampshire Transport Management

146

 

June 2005

 

) schools

           
           
           
           

Policy and Resources - continued

         
           

Other

 

 

 

 

 

Health scrutiny function

25

 

2005/06

 

Re-phasing of scheme

IT - investment in infrastructure

644

 

2005/06

 

Re-phasing of investment programme

Unallocated

304

 

Not known

 

Not applicable

 

 

 

 

 

 

Total Policy and Resources

3,619

 

 

 

8.5% of schemes approved to start

 

 

 

 

 

in 2004/05 to be carried forward

 

 

 

 

 

 

 

 

 

 

 

 

Recreation and Heritage

         

 

 

 

 

 

 

Countryside and Rights of Way

121

 

Autumn 2005

 

Operational reasons and access

improvements

 

 

 

 

difficulties

Grants to village halls

125

 

Unknown

 

Assembling funds from other sources

Outdoor centres

48

 

Autumn 2005

 

Assembling funds from other sources

Minor grants

5

 

Unknown

 

Reviewing plans

Product development

41

 

Summer 2005

 

Delay in finalising scheme

Partnership projects

10

 

Summer 2005

 

Operational reasons

Disability Discrimination Act

45

 

Summer 2005

 

Operational reasons

schemes

         

ICT development

49

 

Summer 2005

 

Operational reasons

Romsey Library extension

350

 

Summer 2005

 

Delays in planning permissions

Museums and Archives

81

 

Summer 2005

 

Legal delays & assembling funding from

 

 

 

 

 

other sources

Rockbourne Roman Villa

70

 

Autumn 2005

 

Reviewing plans

 

 

 

 

 

 

Total Recreation and Heritage

945

 

 

 

22.3% of schemes approved to start

 

 

 

 

 

in 2004/05 to be carried forward

 

 

 

 

 

 

           
           
           
           
           
           
           

Social Services

 

 

 

 

 

 

 

 

 

 

 

Residential and day care premises

 

 

 

 

 

- minor works

204

 

Various

 

Balance of allocation

- furniture and equipment

164

 

Various

 

Linked with building works schemes

Furniture and equipment in office

160

 

Various

 

Linked with building works schemes

bases

         

IT equipment

11

 

Various

 

Balance of allocation

Non-residential charging system

97

 

Ongoing

 

Ongoing scheme

           

Mental health services

200

 

Various

 

) Government support available over

Information management

4

 

Ongoing

 

) two years

IT for looked after children and

 34

 

Ongoing

 

)

care leavers

 

 

 

 

 

 

 

 

 

 

 

Total Social Services

874

 

 

 

19.9% of schemes approved to start

 

 

 

 

 

in 2004/05 to be carried forward

           
           
           
           

Total all services

12,740

 

 

 

7.6% of schemes approved to start

 

 

 

 

 

in 2004/05 to be carried forward

Add: Education schemes

 

 

 

 

 

previously approved for carry

7,206

       

forward to 2005/06

 

 

 

 

 

 

 

 

 

 

 

Total schemes carried forward

19,946

 

 

 

11.9% of schemes approved to start

 

 

 

 

 

in 2004/05 to be carried forward

           

Add: balance of cash limit carried

         

forward

3,164

       
           

Total cash limit carried forward

23,110

     

13.8% of schemes approved to start

         

in 2004/05 to be carried forward

           
           

Annex 3

Summary of capital payments 2004/05

Analysis by service

 

£000

%

     

Education

96,727

46.4

Environment

59,018

28.3

Policy and Resources

10,193

4.9

Recreation and Heritage

8,287

4.0

Social Services

34,213

16.4

 

-----------

--------

 

208,438

100.0

 

-----------

--------

     

Analysis by type of expenditure

 

£000

%

     

Land

2,289

1.1

Construction work

166,585

79.9

Fees and salaries

31,995

15.4

Furniture, equipment and vehicles

7,569

3.6

 

-----------

--------

 

208,438

100.0

 

-----------

--------

Annex 4

Analysis of capital receipts 2004/05

 

(1)

(2)

(3)

 

Net

Share from in/out

25% share of

 

capital

and other schemes

qualifying

 

receipts

previously added

receipts now

   

to programme

due to services

       
 

£000

£000

£000

       

Education

6,026

4,389

-

Environment

263

-

66

Policy and Resources

     

- Development account

11,247

-

-

- Other

162

-

41

Recreation and Heritage

771

771

-

Social Services

-

-

-

 

-----------

-----------

-----------

 

18,469

5,160

107

 

-----------

-----------

-----------

       

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