The full Agenda report and appendices associated with this recommendation were circulated to all Members with the agenda for the meeting of Corporate Management Committee and are available on the website.
The Committee considered a report on a proposed Capital Strategy and General Fund Capital Programme 2022/23 to 2025/26.
The CIPFA Prudential Code together with other guidance and legislation, required the Council to produce a comprehensive capital strategy. The purpose of the capital strategy was to describe how the investment of capital resources would contribute to the achievement of the Council’s key objectives and priorities, and to describe the long-term context in which capital expenditure and investment decisions were made. The Prudential Code required all local authorities to look at capital expenditure and investment plans in light of the overall organisational strategy and resources and make sure that decisions were being made with sufficient regard to the long term financial implications and potential risks to the authority. At Runnymede this was done through the Capital Strategy, Treasury Management Strategy and Medium Term Financial Strategy (MTFS).
Although major changes to the strategy resulting from the new Prudential Code were not envisaged, the Council was still awaiting the guidance associated with the Code. The Committee agreed to recommend the Capital Strategy 2022/23 to 2025/26 at Appendix ‘F’ to the agenda which had not changed significantly from the Strategy approved in February 2021. The Strategy aimed to balance the resources available to the Council and leave options open as to future funding over the life of the MTFS whilst remaining affordable, financially prudent and sustainable.
The Committee agreed to recommend the updated Capital Programme set out at Appendix ‘G’ to the agenda and noted a summary of the costs and financing of the Programme set out at Appendix ‘H’ to the agenda. It was noted that the Council’s Capital Programme expenditure on the A320 road improvement scheme was limited to a maximum of £2 million in 2023/24. There was very little change to the Programme and the main changes related to phasing adjustments due to delays caused by the pandemic.
The Capital Programme was funded in a number of ways. In the Housing Revenue Account, (HRA) tenants’ rents funded the works to the Council’s housing stock. In the General Fund, revenue contributions funded some assets with a short life, and capital receipts were used from the sale of assets to fund much of the remainder. Some schemes were funded, or part funded, by third party grants and contributions such as section 106 contributions or Government grants.
The Council’s usable capital receipts were declining as predicted. Most short life assets were funded from capital receipts with some being funded from the revenue budget. The Council’s financial strategy aimed to fund all short life assets from revenue when the resources became available. However, with an ongoing revenue reductions target, this aim currently remained an aspiration.
All capital receipts generated from sales of Council dwellings were subject to special rules. A proportion of these receipts were set aside for repayment of the HRA debt, some was set aside for purchasing further HRA properties, with the remainder paid over to central Government according to a set of complex criteria. The current forecast for capital receipts, both general and set aside for housing purposes, was noted. This was based on existing plans for the sale of flats in the Council’s redevelopment schemes. It was noted that the letting by the Council of student accommodation in Egham was progressing well.
The Capital Strategy and Capital Programme met all the relevant legislative and statutory guidance and ensured that the Council’s assets were used to support the delivery of its priorities. Should the requirements of the new Prudential and Treasury Management Codes dictate any material changes, these would be incorporated into the Strategy and brought back to Members for approval.
Recommend to Full Council on 10 February 2022 that –
the Capital Strategy and the Capital Programme, as reported, be approved.
Council considered a recommendation from Corporate Management Committee which had met on 20 January 2022 on the proposed Capital Strategy and General Fund Capital Programme 2022/23 to 2025/26.
RESOLVED that –
the Capital Strategy and the Capital Programme, as reported, be approved;