Contact: Anne Hibbert, 01962 847533, [email protected]

1 Summary

1.1 This report proposes the capital programme for Policy and Resources for 2006/07 to 2009/10 (as set out in Appendix 1).

2 Introduction

2.1 The following guideline limits were set by Cabinet at its meeting on 19 December 2005 for the locally resourced programme for Policy and Resources.

		£000
	2006/07	48,225
	2007/08	13,406
	2008/09	7,341
	2009/10	6,341

2.2 The guidelines include an addition of 2.5% for inflation, in line with the non-pay inflation assumption for the revenue budget.

2.3 Executive members have been requested to exemplify how 2.5% efficiency improvements are being achieved. As with new revenue proposals, new capital schemes added to the programme should be accompanied by an outline business case demonstrating how performance will be improved and value for money achieved.

2.4 Executive members may vary the guidelines between years provided their total four-year guideline is not exceeded and bunching of payments in any one year or front-loading is avoided.

2.5 Executive members may propose supplementing their capital guidelines under the `prudential framework' agreed by Cabinet at its meeting on 24 November 2003, thereby integrating more closely decisions on revenue and capital spending in support of Corporate Aims. The additions may include:

· virement from the executive member's revenue budget

· temporary unsupported borrowing, to provide bridging finance in advance of capital receipts or other contributions, with the cost of servicing the unsupported borrowing in the interim being met from the executive member's revenue budget.

3 Capital programme 2006/07 to 2009/10 - locally resourced schemes

3.1 The programme proposed for 2006/07 to 2009/10 is based upon the allocation of resources between priorities in the current 2005/06 to 2008/09 capital programme. The main corporate priority continues to be the maintenance of the core buildings in the County Council's built estate through the capital repairs programme, which support the corporate aim of improving services countywide

3.2 The 2006/07 capital programme incorporates the Ashburton Court refurbishment project on the basis of the funding strategy approved by the Cabinet in October 2005. The overall scheme allocation includes £5m for the purchase of Capital House required to accommodate staff relocated from Ashburton Court during the course of the project.

3.3 The variation in the guidelines between years also reflects the decision on the phasing of the capital repairs taken by the Executive Member in April 2005, together with the proposed capital repairs contribution to the Ashburton Court scheme in 2008/09 and 2009/10.

Business unit schemes

3.4 The locally resourced guidelines can be enhanced to include any approved business unit schemes funded from business unit reserves or from prudential borrowing. HC3S (Hampshire County Council Catering Services), Hampshire Transport Management and County Supplies are proposing in their business plans improvements costing £368,000 in 2006/07 and £190,000 in 2007/08. These will be funded from reserves.

4 Capital programme 2006/07 to 2009/10 - schemes supported by Government approvals

4.1 The Department for Education and Skills has confirmed allocations for 2006/07 and 2007/08 from its New Deal for Schools (NDS) Modernisation Fund to bring buildings up to the standards required to teach the modern curriculum. The overall allocation is intended to cover suitability (improvement) work, which is managed within the Education capital programme and funding to address the backlog of building condition work, which is managed by Policy and Resources. Allocations continue to be split in the ratio 54% to condition and 46% to suitability. For Policy and Resources the allocations are:

2006/07 £12.6m

2007/08 £12.8m

4.2 The DFES is proposing to support this programme mainly from supported borrowing in 2006/07 and 2007/08 rather than by capital grant. The recent Government grant settlement has undermined the mechanism for supporting borrowing, particularly for authorities well below the floor such as Hampshire. This issue is being taken up with the DFES.

4.3 With the introduction of the Dedicated Schools Grant in 2006/07, provision for capital repairs in schools will no longer be locally resourced, but will be supported by Government grant. The programme is based on the provision in the proposed schools budget which makes an allowance for increased building costs of 7% in 2006/07 and provisionally at the same level in 2007/08.

5 Private finance initiative schemes

5.1 There are no Policy and Resources schemes currently under consideration that would be suitable for private finance initiative (PFI) revenue support from the Government.

6 Capital Programme Summary

6.1 On the basis of the position outlined above, the total value of the capital programmes submitted for consideration for the four years to 2009/10 are:

7 Revenue Implications

7.1 The revenue implications of the proposed capital programme are as follows:

Section 100 D - Local Government Act 1972 - background papers

The following documents disclose facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of this report.

NB the list excludes:

1. Published works.

2. Documents which disclose exempt or confidential information as defined in the Act.

TITLE FILE

None.

Appendix 1

Policy and Resources

Proposed Capital Programme 2006/07 - 2009/10