Contact: Jon Pittam (01962) 847400 [email protected], and

Andrew Smith (01962) 847826 [email protected]

1 Summary

1.1 This report deals with issues raised when Cabinet agreed the capital programme for 2006/07 to 2009/10 in February 2006, including

· the cost of fees on building-related schemes

· progress on the Strategic Property Review including projections of future capital receipts and proposals for meeting the shortfall of resources to fund the existing capital programme

· proposals to restrict the use of Government borrowing allocations in 2007/08

· proposals to fund the accumulated shortfall of resources for the Adult Services capital programme, enabling a revised programme for 2006/07 to 2009/10 to be approved.

1.2 The following decisions are sought:

a. That the provision of £680,000 per annum in the Policy and Resources capital programme for fees on feasibility studies and other advance work on building-related schemes be increased from 2007/08, when the capital programme is next reviewed

b. That the standard percentage for fees on building-related schemes be increased from 16% of construction costs to 16.5% from 2007/08

c. That, subject to the feasibility of achieving higher than planned capital receipts in 2006/07 and 2007/08, the provision for additional staff or consultancy resources to generate additional capital receipts, funded on an invest-to-save basis, be increased from £190,000 to £500,000 per annum in 2006/07 and 2007/08

d. That the shortfall of capital financing resources in 2007/08 and 2008/09 be taken into account when the capital programme is next reviewed

e. That the failure of the Government to respond positively to representations to provide revenue grant support for loan charges arising from its `supported' borrowing allocations be noted and, as a result, services' capital programme guidelines for 2007/08 be reduced by the following amounts:

	£000
Adult Services	102
Children's Services	3,997
Environment	5,733
Policy and Resources	2,661
Recreation and Heritage	7
	---------
	12,500
	---------

f. That the requirement for Adult Services to pay its contribution of £1.320m towards the programme of improvements to homes for older people between 2000/01 and 2002/03 be waived by retaining centrally its share of the capital receipt from the disposal of Winton House, Winchester

g. That the plans to fund the required programme of capital investment in Adult Services, incorporating the use of 100% of capital receipts from the re-provisioning of Adult Services residential care homes for recycling into property-related spending on Adult Services be agreed

h. That 100% of the proceeds from the sale of two former Children's Services properties, Woodend and Copsehill, in Shepherds Row, Andover, be retained by Adult Services to cover unfunded Social Services capital expenditure relating to Children's Services

i. That the revised capital programme for Adult Services for 2006/07 to 2009/10, as set out in Appendix 2 of the main report, be approved.

2 Reason

2.1 In approving the capital programme for 2006/07 to 2009/10 in February 2006, Cabinet asked for a report on projections for capital receipts, the basis for estimating the cost of fees and on proposals for bringing future years' capital expenditure flows into line with available resources. It is also necessary to put in place plans to reduce the Council's use of Government borrowing allocations in 2007/08 now that there is little likelihood of the Government reversing its decision to reduce revenue grant support to the Council for such borrowing.

2.2 In addition, approval of the Adult Services capital programme was deferred in February 2006 until the funding of a number of outstanding commitments could be resolved.

2.3 Consideration of this report supports Aim 5 of the Corporate Strategy.

3 Other options considered and rejected:

3.1 Not applicable

4 Conflicts of interest declared by the decision maker or a member or officer consulted

4.1 Not applicable.

5 Dispensation granted by the Standards Committee

5.1 Not applicable.

6 Reason(s) for the matter being dealt with if urgent

6.1 Not applicable.

Approved by: ................................... ... Date: .........................

Councillor T K Thornber, CBE