To review the proposed capital programme including proposed investment additions for 2018/19 onwards and determine recommendations to Council.

The cabinet member for finance, housing and corporate services presented the report and highlighted:

·         Appendix 1 shows the proposed capital programme

·         Appendix 2 shows the current approved capital programme

·         Appendix 3 provided an indication of the total programme, if approved. 

·         Each programme would need its own business case and appropriate approval before proceeding,

Following a request from the cabinet member for finance, housing and corporate services, the S151 officer agreed to amend appendix 3 to provide more clarity over the funding of schemes, bring forward of spend, any budget slippage and budget totals.    This was proposed as an additional recommendation as set out in (b) below.

Following questions from the leader of It’s Our County, it was confirmed:

Political support scores

The political point scores on page 27 represented an indicative score based on previous reports that have already received approval through the governance arrangements.  For example if the proposal follows a previous report on service delivery changes approved by Cabinet then it scores a higher political support score than if there are no previous report approvals already in place.

Development partnership activities

The detail behind the benefits and returns to the council from the £20m request for ‘Development Partnership activities’ in 2018/19 on page 29 will be provided as the individual decision approval to incur spend is secured. The £40m total investment mentioned on page 33 is funded through £10m capital receipts, £10m corporately funded prudential borrowing and the previously approved £20m prudential borrowing where the borrowing cost is funded from anticipated returns on the investment. Any additional returns over and above this would therefore be available to fund other costs.   With regard to whether this would represent poor value for a £40m, it was noted that the council would be looking for returns commensurate with good treasury management and there would also be some investments which will provide social value and long term economic value which would be difficult to measure at this stage.

Fastershire

The £7.248m on Fastershire broadband programme was in line with the Fastershire Broadband Strategy adopted by Cabinet in December 2015.

The total scheme budget of £32,603,000 represented the total current public contribution between 2013/14 and 2019/20 towards the delivery of the Fastershire Broadband Strategy. This figure includes just over £13m of Herefordshire Council funding.

The £7,248,000 budgeted for 2018/19 represented the contributions from both Herefordshire Council and external funding that will be spent on delivering 3 contracts; Lot 2/3c which covers south Herefordshire delivered by Gigaclear, Lot 4 the north of Herefordshire (also Gigaclear) and Lot 3b in the city delivered by BT.

The premises which will be enabled with this funding is available via Fastershire.com.  

The cabinet member for economy and communications stated that the contract with Gigaclear would provide coverage for 94% of the county.   The areas outside of this coverage were mainly rural.   

Following a statement from the group leader for the Herefordshire Independents, the cabinet member for economy and communications stated that the contracts had been well managed given the geography of the county.   BT had found it very difficult due to the rural nature of Herefordshire and that the move to Gigaclear would provide faster broadband as they would be putting in new technology but this would take time to install.

Capital receipts for 2018/19 showing as £12.495m and why receipts from the farm smallholdings sales are not shown in full anywhere in report or in the medium terms financial strategy

Appendix 3 shows the capital receipt funding to be used to fund capital spend, within the previous budget setting papers, the 2017/18 treasury management strategy included £33.6m of anticipated capital receipt funding to reduce our borrowing requirement, which is capital receipt funding earmarked for debt reduction.

Following a question from the group leader for the Green party, it was confirmed each scheme would have detailed risk management information included within the detailed business cases. 

That:

(a)   the proposed capital programme for 2018/19 attached at appendix 3 be recommended to Council for approval; and

(b)   authority be delegated to the chief finance officer, in consultation with the cabinet member finance and the leader to make technical amendments (grammatical, formatting, and consistency) as necessary to finalise the appendix 3 for publication for council.