Archived decisions

Contact: Helen Ackerman, ext 5077 email: [email protected]

John Buckett, ext 6599 email: [email protected]

Ejner Knudsen, ext 7403 email: [email protected]

1. Summary

1.1 This report proposes amendments to the 2006/07 transport capital programme (Appendix 1), a revised 2006/07 transport capital programme (Appendix 2) and an Environment capital programme for 2007/08 to 2010/11 (Appendix 3).

2. Introduction

2.1 The Environment capital programme is funded from a number of sources. The transport programme is mostly funded through the Local Transport Plan (LTP) in the form of credit approvals and grants. The LTP funding covers integrated transport schemes (tackling safety, congestion, access and environmental problems) and structural maintenance of roads and bridges. In addition there is substantial external funding (EF) through developers' contributions.

2.2 Most of the rest of the Environment capital programme is funded from local resources within limits set by the Cabinet. These programmes include a further allocation for highway maintenance as well as funding for environmental improvements, urban regeneration schemes and waste management (household waste recycling centres and facilities management). There is often additional funding from external sources, usually district council, parish council, developer contributions or grants from SEEDA or other bodies.

2.3 This report covers an update of the 2006/07 transport capital programme followed by the proposed programme for 2007/08 to 2010/11 for the LTP and locally funded programmes.

3. Transport Programme 2006/07 - Proposed Amendments

3.1 As part of the regular monitoring and reporting process of the Environment capital programme, this report provides an overview of the amendments since September 2006. Details are set out in Appendix 1.

3.2 Amendments to the individual schemes often include elements of improved safety and security or sympathetic designs and materials that protect the quality of place and local distinctiveness. Schemes within the capital programme also aim to provide well maintained or improved infrastructure to enhance access to services, tackle congestion, air quality management and address safety issues, and contribute to the well-being of Hampshire residents.

3.3 In common with a number of other counties the County Council will not be taking up part of its approved allocation in 2007/08 as there is no additional Government grant support towards its deemed borrowing allocation. As a result the Environment service's capital programme guidelines for 2007/08 have been reduced by £5.733 million and by similar amounts in subsequent years. However, about 45% of the reduction has been offset by an increase in capital grant announced in December 2006 with the Local Transport Plan approval rating as `Excellent'.

3.4 In order to minimise the effect of this decision on the delivery of the 2007/08 programme it is proposed to amend the funding of expenditure in 2006/07, primarily by using additional developers' contributions to fund integrated transport schemes which would allow local resources to be carried forward to supplement the available sources of funding in 2007/08.

3.5 The 2006/07 programme level remains broadly the same as in previous reports. No schemes have been delayed or deleted as a direct result of the reduction in borrowing approval. However, without this action the 2007/08 capital programme would need to be severely curtailed.

3.6 After allowing for these proposed funding adjustments the revised target for expenditure on LTP integrated transport for 2006/07 is £10.4 million, as set out in the following table.

Supported Borrowing Approval 2006/07	£m 13.3
Transfer of funds to LTP Maintenance (January 2006)	-0.4
Transfer of funds to Street Lighting Column Replacement (January 2006)	-0.8
Proposed transfer of funding to 2007/08	-1.7
	10.4
Forecast spend on LTP Integrated Transport Schemes in 2006/07	12.8
Proposed additional external funding of expenditure	-2.4
	10.4

3.7 Ongoing spending commitments are being carefully monitored in order to minimise the impact on the reduced 2007/08 funding, so that next year's programme level can remain broadly similar to that published in January 2006 for that year. The financial situation for future years is explained below.

3.8 The proposed revised 2006/07 programme is attached as Appendix 2.

4. Local Transport Plan Programme 2007/08 to 2010/11

Resources

4.1 On 18 December 2006 the Government Office for the South East wrote with its assessment of Hampshire's first LTP Delivery Report and second LTP, and its allocation of resources. The Delivery Report was assessed as `very good' and the second LTP as `excellent'. The allocation for integrated transport in 2007/08 is £13.501 million, uplifted from the previously published guideline by 12.5% (£2.6 million) because of the County's excellent LTP, and £16.145 million for capital maintenance (see also paragraph 3.3). The allocation is made up of £19.952 million in borrowing approvals and £9.694 million of grant. All of this uplift is in capital grant.

4.2 The letter also indicated increases in the published planning guidelines for integrated transport for 2008/09, 2009/10 and 2010/11. In respect of maintenance the Government is proposing to announce a three year settlement for the remainder of the second LTP period in spring 2007.

4.3 Work will continue in 2007/08 on the A3 Bus Priority Corridor which was accepted as a major scheme by the Government on 28 October 2003, although the funding support for 2007/08 for major schemes has not yet been announced.

4.4 Also on 18 December 2006 a letter was received from the Department for Transport (DfT) detailing a specific road safety grant allocation of £2.640 million. From 2007/08, safety cameras and their funding have been integrated into the LTP system alongside other road safety measures towards which the DfT is providing additional funding. This move gives local authorities greater flexibility to pursue whichever locally agreed mix of road safety measures will make the greatest contribution to reducing road casualties in their area.

4.5 The amount of grant was based on the Department's assessment of the road safety element of the County's second LTP which was classified as `good' and approximately £1.14 million will be available in 2007/08 towards road safety capital, after allowing for the funding of the safety camera partnership. The capital programme reflects the assumption that a similar level of support would be available during the following three years.

5. Integrated Transport Programme 2007/08 to 2010/11

5.1 As discussed above, by making increased use of the developers' contributions, carrying forward local resources and utilising the road safety grant from the Government, it is expected that it will be possible to maintain a similar programme level in 2007/08 as was previously anticipated.

5.2 It will include schemes in the 2006/07 programme (reported in Appendix 1) that are unlikely to commence before the end of the financial year.

5.3 There is one proposed additional sub-programme and that is for `Safe and Secure Communities' at £500,000 which is to support the introduction of speed limits in villages and in the vicinity of schools.

5.4 The junction improvement (traffic signals) at Cupernham Lane/ Winchester Road, Romsey, has been withdrawn from the programme as current traffic flows do not justify its introduction. A lower cost scheme is being investigated and will be added to the programme should it prove value for money and funding is available.

5.5 The £800,000 contribution to new street lighting columns is also proposed to be withdrawn pending progression of the Private Finance Initiative bid for street lighting.

5.6 The overall funding position for 2007/08 is very tight and relies on appropriate developers' contributions being received. It may be necessary to hold back on the delivery of some sub-programmes (like Safer Routes to Schools) and schemes to ensure that LTP and local resources cash limits are not exceeded.

5.7 The capital guidelines for 2008/09 to 2010/11, set out below, assume a continuation of the restrictions on the use of Government supported borrowing approvals to cover this period.

£'000

2007/08 14,364

2008/09 15,362

2009/10 15,654

2010/11 15,890

5.8 Schemes supported by Government grants may be added to the above limits. The anticipated grants for each of the four years of the programme are summarised below. The grants include LTP awards, LPSA reward grant in 2007/08 and an assumed level of road safety grant throughout the period at a similar level to that awarded for 2007/08.

£'000

2007/08 11,034

2008/09 10,592

2009/10 10,392

2010/11 10,158

5.9 Overall, there is a reduction in the amount of the capital guidelines to be funded from supported borrowing of £19.6 million over the 2007/08 to 2010/11 capital programme period. However, this reduction can be partially offset by additional LTP capital grant of £4.3 million and £4.6 million of assumed road safety grant, together with £1.7 million local resources to be carried forward from 2006/07.

5.10 Other proposed changes to the capital programme set out above, together with accelerated spending of developer contributions should enable the recommended capital programme for 2007/08 to 2010/11, as set out in Appendix 3, to be largely accommodated within the guidelines set out by Cabinet. However, there will be need to monitor future capital payments carefully and continue to review the phasing of schemes on a regular basis, to ensure that payments do not exceed the available sources of funding.

Developer Funded Programme

5.11 Schemes wholly or partly funded by developers' or other contributions are included in the programme. The programme totals £11.2 million in 2007/08. Schemes have only been named where there is reasonable confidence on funding security and programme dates.

5.12 As the exercise to accelerate the use of developers' contributions progresses, additional schemes will be added to the programmes.

Major Schemes

5.13 A number of major schemes are being prepared for possible bids for Government funding, including Chickenhall Lane Link Road and Access to Gosport.

Local Public Service Agreement (LPSA) Reward Grant

5.14 On 30 October 2006 the Cabinet approved the release to the Environment Department of an allocation of £2.1 million LPSA reward grant, including a sum of £200,000 for an enhancement to the capital safety programme for the refurbishment of approximately 30 existing road safety schemes at higher risk locations. The allocation has been included within the 2007/08 capital programme for casualty reduction.

Asset Management

5.15 Although asset management is not a new concept and the department has developed sound procedures and policies to manage the asset over many years, the LTP 2006-2010 guidance stipulated a requirement for the development of an asset management plan to support the LTP. The preparation and implementation of this plan will affect LTP and Corporate Assessment scoring in the future.

5.16 A national framework for the development of highway asset management plans was produced by the County Surveyors' Society in 2004 supported, amongst others, by the UK Roads Board and the Department for Transport. Hampshire used this framework document to produce a draft Transport Asset Management Plan which was issued with the Second Edition Local Transport Plan in April 2006. This document identified both the present position in terms of asset management and areas where development was required. An improvement plan is being developed which identifies improvement actions, resource implications and timetables for implementation over the LTP period. Liaison is also taking place with other local authorities and some leading consultants to ensure consistency, regionally and nationally, and to push the programme for improvement forward.

6. LTP Funded Highways Maintenance and Bridges Programmes

6.1 The proposed LTP funded maintenance and bridges programme for 2007/08 is £14.845 million, comprising £10.745 million for highway maintenance and £3.500 million for bridges, with £0.600 million being reserved within this programme for use where maintenance works may be brought forward to be coordinated with capital improvement works. Individual schemes to benefit from this new programme will be approved by the Executive Member for Environment.

6.2 The LTP maintenance programme levels in the following years are proposed to be set in line with the allocation for 2007/08.

6.3 It is also proposed to continue to transfer a sum of £400,000 per year from the LTP integrated transport allocation into LTP maintenance while at the same time reducing the locally resourced maintenance programme by £400,000 each year, in order to fund integrated transport studies.

6.4 The locally resourced elements of highway maintenance and bridges are discussed below.

7. Locally Resourced Capital Programme 2007/08 to 2010/11

7.1 Provisional capital guideline figures were set by the Cabinet at its meeting on 18 December 2006 for the locally resourced programme for the Environment service, although minor changes to the figures have subsequently been made. The adjusted guideline figures are:

£'000

2007/08 14,411

2008/09 14,434

2009/10 14,439

2010/11 14,442

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

7.3 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.

7.4 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 policies. The additions may include:

(i) virement from the Executive Member's revenue budget; and

(ii) 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.

7.5 In addition, Executive Members may also propose schemes funded from:

(i) using Executive Member's share of capital receipts obtained in 2005/06 as allocated by the Cabinet in June 2006 (if not already used for the 2006/07 programme); and

(ii) anticipating their share of capital receipts obtained in 2006/07 provided the receipt has actually been received.

7.6 The following table sets out the proposed locally funded programmes for 2007/08 to 2010/11. The figures reflect the suggested amendments to the funding of the 2006/07 capital programme outlined in paragraph 3.4 of this report, which would help to mitigate the impact of the £5.733 million reduction in supported borrowing in 2007/08.

2007/08 2008/09 2009/10 2010/11

£'000 £'000 £'000 £'000

Structural maintenance of 13,974 12,295 12,300 12,302

non principal roads

Environmental improvements 1,025 1,027 1,027 1,028

Waste facilities management 64 64 64 64 Household waste recycling 1,048 1,048 1,048 1,048

centres

Total 16,111 14,434 14,439 14,442

7.7 In addition it is proposed that the share of capital receipts obtained in 2005/06 totalling £30,000, as allocated by Cabinet in June 2006, be retained as a reserve to be used to cover any unforeseen cost increases.

7.8 It is not proposed to add any schemes under the `prudential framework'.

Waste Management

Household Waste Recycling Centres (HWRCs)

7.9 The HWRC capital programme will facilitate the achievement of higher recycling performances as well as providing much needed investment to improve the network. Many existing HWRCs are too small for the level of use they receive and are of an outdated design. Some sites have only temporary planning consent while in some parts of the country there are `service gap' areas where provision is limited or non-existent.

7.10 The HWRC investment is predicted to significantly raise the average recycling rate from 50% in 2004/05 towards 65% as set out in the Waste Management Business Plan.

7.11 Feasibility studies and prioritisation work concluded that a new `split level' site was required to serve the residents of Andover. Progress on the relocation of the site in terms of site identification and land acquisition is at an advance stage and subject to planning permission should be operational by the end of March 2008. The total cost of the project is £1.2 million.

7.12 After extensive feasibility studies and site identification for the new site at Romsey, it was decided that this project would not be progressed and instead the potential for improvement to the current site at Casbrook would be reassessed.

7.13 Other sites being assessed include the relocation or development of sites in Marchwood, Fair Oak, Waterlooville, Aldershot, Hartley Wintney and Somerley, although it is not envisaged that any construction work will begin until after 2007/08.

Facilities Management

7.14 The annual capital programme for facilities management is £64,000. It will be used to deliver pollution control works at closed unlicensed sites and pollution control/remediation works at closed licensed sites managed under contract with Hampshire Waste Services.

7.15 The current allocation will allow only a minimum programme of short term solutions to be delivered. Efforts are continuing to develop a programme that will provide the necessary long term solutions to reduce risk and avoid increasing revenue costs.

8. Capital Programme Summary

8.1 On the basis of the position outlined above, the total value of the capital programmes submitted for consideration for the four years to 2010/11 are:

Schemes within Schemes Total

Locally Resourced supported by

Guidelines Government

Approvals

£'000 £'000 £'000

2007/08 16,141 34,835 50,976

2008/09 14,434 21,545 35,979

2009/10 14,439 32,805 47,244

2010/11 14,442 22,395 36,837

Note: The above figures are net of developers' contributions and exclude the costs of land for programme schemes which are dealt with outside the guidelines.

8.2 The following table summarises the proposed 2007/08 capital programme over the main categories of expenditure:

£'000

Structural maintenance of roads and bridges 28,819

Integrated transport schemes 19,790

Environmental improvements 1,025

Waste management 1,112

LPSA reward grant 200

Reserve to cover future cost increases 30

Total 50,976

9. Revenue Implications

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

Full Year Cost

Current Capital

Expenditure Charges

£'000 £'000

Schemes within the guidelines

2007/08 9 950

2008/09 9 845

2009/10 9 845

2010/11 9 846

Schemes supported by Government approvals:

2007/08 438 3744

2008/09 242 2671

2009/10 471 4005

2010/11 261 2784

Total 1448 16690

9.2 The total revenue implications for the four years of the starts programme, including capital charges, represent a real term increase of 14% over the 2006/07 original budget of this service.

10. Impact Assessment

10.1 The proposals in this report are derived from the departmental service plans and LTP objectives and are in accordance with the budget strategy and the County Council's financial management policy. An impact assessment of the departmental service plans and the financial management policy has been carried out and the proposals in this report are not considered to be discriminatory.

Recommendations

1. That the proposed changes to the 2006/07 transport capital programme, as set out in Appendix 1, be approved.

2. That the revised 2006/07 transport capital programme, as set out in Appendix 2, be approved.

3. That the Environment capital programme for 2007/08 to 2010/11, as set out in Appendix 3, be recommended to Cabinet.

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