Archived decisions

HAMPSHIRE COUNTY COUNCIL

Decision Report :

EXECUTIVE SUMMARY

1) Summary of Decision Area:

1.1. This report seeks approval for submission of the proposed capital programme for 2009/10 to 2011/12 to the Leader and Cabinet.

1.2. The report has been prepared in consultation with the Executive Member and will be reviewed by the Policy and Resources Select Committee. It will be reported to the Leader and Cabinet on 6 February 2009 to make final recommendations to County Council on 19 February 2009.

2) Issues Covered in Report:

2.1. The report considers the schemes which it is proposed to include in the capital programmes for 2009/10, 2010/11 and 2011/12.

2.2. The proposals contained in this report are derived from the departmental service plans which have been developed to support the priorities of the Corporate Strategy.

3) Recommendations:

It is recommended that:

3.1. The capital programme for 2009/10 to 2011/12 as set out in Appendix 1 be approved for submission to the Leader and Cabinet.

MAIN REPORT

1) Purpose of the Report:

1.1. This report sets out the proposed Policy and Resources capital programme for 2009/10 to 2011/12. This report has been prepared in consultation with the Executive Member and will be reviewed by the Policy and Resources Select Committee. It will be reported to the Leader and Cabinet on 6 February 2009 to make final recommendations to County Council on 19 February 2009.

2) Contextual Information:

2.1. In approving the medium term financial strategy on 27 October 2008, the Cabinet requested that executive members prepare proposals for:

· a locally-resourced capital programme for the three-year period from 2009/10 to 2011/12 within guidelines that spread the existing capital programme for 2009/10 and 2010/11 over three years. This is in recognition of the sharp decline in the expected availability of capital receipts over the next three years as a result of the condition of the housing market

· a programme of capital schemes supported by Government grants or supported borrowing in 2009/10 and 2010/11 and those expected to be supported in 2011/12, subject to limits restricting the take-up of Government supported borrowing approvals.

2.2. The medium term financial strategy is closely linked to the Corporate Strategy to ensure that priorities are affordable and provide value for money and that resources follow priorities.

Key Issues

3) Locally resourced capital programme:

3.1. The cash limit guidelines for the locally resourced capital programme for Policy and Resources set by Cabinet are as follows.

		£000
	2009/10	6,380
	2010/11	6,351
	2011/12	6,366

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

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

3.4. The 2009/10 programme for capital repairs includes £2m transferred from 2008/09 as agreed by the Executive Member at his 16 October 2008 meeting. This will address key corporate initiatives such as Hampshire Workstyle and the achievement of carbon reduction targets.

3.5. The 2009/10 programme includes a provision to increase the infrastructure budget for Merton Rise by £1.037m. This reflects the revised treatment of Section 106 contributions payable to Basingstoke and Deane Borough Council.

4) Proposed capital programme 2009/10 to 2011/12 - locally resourced schemes:

4.1. The programme proposed for 2009/10 to 2011/12 is largely based upon the allocation of resources between priorities in the current 2008/09 to 2010/11 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 supports the delivery of services countywide and specifically aims to address the priorities identified in the Corporate Risk Assessment. This ensures key structural, health and safety and sustainability issues are addressed.

4.2. To date, considerable progress has been made in the schools estate where work programmes have benefited from additional investment via the New Deal for Schools (NDS) programme. However, significant liabilities remain in the non-schools estate.

4.3. Hampshire Workstyle is a key corporate initiative to improve service delivery by making better use of County Council buildings, providing a more efficient facilities management service and developing and implementing mobile and flexible working practices. Financially, its objectives are to develop an approach that brings ongoing revenue savings and is broadly neutral in capital terms and a business case will be brought to Cabinet in 2009. In order to develop the business case some additional resource will be required to support the additional costs of the project team and it is proposed to vire a sum of £249,000 to revenue in 2009/10 from the capital repairs funding transferred from the 2008/09 programme.

4.4. The Government is introducing a Carbon Reduction Commitment (CRC - a capped carbon trading scheme) for large non intensive energy users, such as the County Council from 2010. Under this scheme the County Council will be required to buy carbon allowances initially equal to its emissions but after a period of two years a cap will be introduced to ensure participating organisations reduce their emissions over time with a 15% reduction required by 2020. The costs of purchasing CO₂ emissions allowances will be recycled to the County Council but the extent to which this happens will be determined by the authority's place in a carbon league table.

4.5. To prepare for this new regime and to minimise the cost of the County Council's participation, a number of actions are proposed - these include introducing an automated meter system to all main fuel sources (smart meters), complying with the Carbon Trust standard, and implementing a Carbon Management Plan.

4.6. Proposals are being worked up at officer level with input from the Property/Built Estate Members' Panel and feasibility and start up costs are estimated at £187,000. In order to offset the initial development costs, it is proposed to vire £187,000 to revenue in 2009/10 from the capital repairs funding carried forward.

4.7. In the light of the reduced funding for capital repairs from 2009/10 it is proposed to carry forward a further £1m from 2008/09 both to provide further resources for key corporate projects and to allow some smoothing of the reduction to the capital repairs programme and it is proposed to utilise £200,000 of this carry forward to smooth the impact on the revenue account of the loss of fee income in 2009/10 by a virement of this amount.

4.8. Property Services is supporting Children's Services in bidding for early entry to the Building Schools for the Future (BSF) programme. Preparatory work of this nature is generally charged to the department's capital allocation for Advance Fees. Resource requirements for 2009/10 onwards will depend on whether the bid is successful and on what basis. Assuming Hampshire's preferred option is endorsed, Property Services costs for 2009/10 and 2010/11 are provisionally estimated at £1.7m with £637,000 falling in 2009/10. These costs would use up over 75% of the reduced Advance Fees allocation in 2009/10. Alternative funding options have been explored and PBRS may be able to partially offset these costs by diverting single capital pot NDS funding to replace revenue contributions to capital - a figure of £300,000 is proposed.

4.9. The Advantageous Land budget supports the purchase of land or premises needed to progress capital projects or other strategic objectives of the County Council. There have been relatively few calls on the budget in recent years and a carry forward of £1.5m is anticipated in 2008/09. In order to smooth the transition to the lower level of resources in the Advance Fees budget for feasibility work, it is proposed to transfer £200,000 to Advance Fees from Advantageous Land in 2009/10.

4.10. The capital programme includes an annual provision for coastal conservation, for funding schemes that will inform and deliver innovative solutions to the challenges facing the County Council's coastal landholdings and will increase understanding of the coastal environment and the factors that affect it. The programme for 2009/10 summarised in Appendix 2 gives particular priority to the development of strategies related to the outcomes of the County Council's Climate Change Commission of Inquiry and in particular to the adaptation of the County Council's coastal sites to future sea level rise.

5) Capital programme supported by Government allocations:

5.1. As the Government has previously announced details of its support for capital schemes in 2009/10 and 2010/11, the cash limit guidelines for the programme supported by Government borrowing allocations for those years remain unchanged as adjusted for the proposed use of £300,000 of the 2009/10 programme for BSF feasibility work. The guidelines continue to allow for not taking up Government supported borrowing in full based on the existing policy of limiting the increase in the capital financing requirement to 2.5% per annum, subject to the specific decisions taken in 2008/09 to support additional borrowing.

5.2. Details of Government support for projects in 2011/12 will not be known until after the Government's Spending Review expected in 2009, but Cabinet has agreed that programmes for 2011/12 can be planned provisionally, where this is appropriate, on the basis of the best information available on potential future levels of support after taking account of the policy of limiting the increase in the capital financing requirement. On this basis, the proposed programme for 2011/12 is based on the cash limit for schemes supported by Government borrowing allocations for 2010/11.

5.3. The cash limit guidelines for the capital programme supported by Government borrowing allocations are shown below and relate to Policy and Resources' share of the New Deal for Schools (NDS) programme. Further allocations are included in the Childrens' Services capital programme.

		£000
	2009/10	8,012
	2010/11	499
	2011/12	499

5.4. These guidelines are supplemented by capital grants expected from the Government, as follows.

		NDS	DSG capital repairs	Sure Start Capital repairs	Total capital grants
		£000	£000	£000	£000
	2009/10	0	12,461	453	11,914
	2010/11	5,912	11,748	477	18,137
	2011/12	5,912	11,748	477	18,137

5.5. The DSG funding includes an additional £1m agreed by the Schools Forum for the purchase and installation of carbon reduction commitment smart meters. This is funded by DSG supported revenue contributions to capital.

6) Proposed capital programme 2009/10 to 2011/12 - schemes supported by Government allocations:

6.1. The proposed programme, which is set out in detail in Appendix 1, aims to address the key priorities identified in the Corporate Risk Assessment. This includes major structural repairs to the fabric of buildings including SCOLA recladding and re-roofing. The programme also includes improvement projects such as new science laboratories, temporary classroom replacements and new school halls.

6.2. The Sure Start capital repairs grant is the Policy and Resources share of the allocation by the Department for Children, Schools and Families for repairs and improvements to the quality of accommodation in early years and childcare settings.

7) Capital programme summary:

7.1. On the basis of the position outlined above, the total value of the capital programmes submitted for consideration for the three years to 2011/12 are:

8) Revenue implications:

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

8.2. The total revenue implications for the three years of the starts programme, including capital charges, represent a real term increase of 2.7% over the 2008/09 original budget for Policy and Resources.

9) Conclusions:

9.1. The proposed capital programme for Policy and Resources as summarised in paragraph 7 is in line with the guidelines set by Cabinet and supplemented in 2009/10 by a transfer from 2008/09 for capital repairs. In addition, it plans to use the allocated Government grants in full. The main priority of the programme continues to be structural maintenance and improvement of the County's built estate which supports the delivery of services countywide and contributes to the corporate aims:

· Hampshire safer and more secure for all

· Enhancing our quality of place.

10) Recommendations:

10.1. Please see the Executive summary for the recommendations.

CORPORATE OR LEGAL INFORMATION:

COMPREHENSIVE RISK & IMPACT ASSESSMENT:

1. Equalities Impact Assessment:

a) Equality objectives are not considered to be adversely affected by the proposals of this report.

2. Impact on Crime and Disorder:

a) The County Council has a legal obligation under Section 17 of the Crime and Disorder Act 1998 to consider the impact of all decisions it makes on the prevention of crime. The proposals in this report have no adverse impact on the prevention of crime.

3. Climate Change:

a) How does what is being proposed impact on our carbon footprint / energy consumption?

· Part of the capital repairs programme will focus on the achievement of carbon reduction targets.

b) How does what is being proposed consider the need to adapt to climate change, and be resilient to its longer term impacts?

· The programme for 20009/10 summarised in Appendix 2 gives particular priority to the development of strategies related to the outcomes of the County Council's Climate Change Commission of Inquiry and in particular to the adaptation of the County Council's coastal sites to future sea level rise.

Appendix 1

Policy and Resources proposed capital programme 2009/10 - 2011/12

Details follow overleaf.

Appendix 2

Policy and Resources detailed proposals for coastal conservation within the 2009/10 capital programme

£'000

Coastal Defence 42

Works at Royal Victoria Country Park and

emergency works at other coastal sites

Access and Environmental improvements 10

Contribution towards a temporary classroom to

increase educational use of Lepe Country Park

Joint studies and projects 35

Coastal adaptation strategy production, Marine

Spatial Planning, Solent European Marine Sites (SEMS),

coastal biodiversity projects, Solent Eelgrass project

and support for the Hamble Estuary Management Plan

Fees 18

Total 105