To approve the proposed capital programme including proposed investment additions for 2018/19 onwards.

Council considered a report by the Leader of the Council setting out the proposed Capital Programme for 2018/19. The report was introduced by the Cabinet Member Finance, Housing and Corporate Services who moved the Capital Programme 2018/19 as set out in the papers and explained that the schedule in appendix 3 had been changed from earlier years to improve the presentation of the schemes. The Leader seconded the Capital Programme as contained in the papers.

Members made the following points in the debate that followed:

·         The change to the presentation of the figures was welcomed but it was felt that further detail was required to enable members to scrutinise the Capital Programme and propose alternative budgets. Greater detail regarding those schemes up to £500k was also requested. The Leader confirmed that he would work with the cabinet member and the Section 151 Officer to provide detail on the schemes as the year progressed.

·         Concern was expressed regarding development partnership activities and the amount of money that it was proposed would be provided to a preferred partner. The obligations of the council to the preferred partner were queried. The Leader confirmed that projects would go out to open tender to select a development partner but there was no obligation to contract those organisations involved in the early stages of working on proposals and producing plans.

·         A project from the current year had overspent significantly and a greater level of monitoring and scrutiny of spend on capital projects was urged in the forthcoming year.

·         The future of the street lighting scheme was queried. The Cabinet Member Finance, Housing and Corporate Services confirmed that all LED lights had now been installed and the scheme had concluded.

·         Detail regarding the stage reached in the development of the New Model Farm at Ross-on-Wye was requested. The Leader confirmed that the Council would be kept advised on progress with the New Model Farm scheme. The Cabinet Member Economy and Communications explained that a planning application for employment elements on the site would be brought forward in February 2018.

·         The investment in the A44 was welcomed and it was hoped this could be financed through money from the Challenge Fund. Greater flexibility between the revenue and capital budget was suggested to address the need for road maintenance.

·         There was reference to the gypsy and traveller pitch development contained in the proposed schemes but this did not include a temporary stopping site which had been recommended by the General Scrutiny Committee.

·         It was questioned whether the proposed expenditure on disabled and independent living facilities was to mitigate the closure of the Redhill centre and whether this formed part of the savings proposals. The Cabinet Member Health and Wellbeing confirmed that the disabled facilities grant would be means tested and it was likely that some individuals using the Redhill centre would be provided with facilities financed through the fund. The Redhill centre would continue to provide care services until it became vacant when it could then be considered for  ...  view the full minutes text for item 47

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  ...  view the full minutes text for item 78

To review the proposed capital programme including proposed investment additions for 2018/19 onwards and determine whether to make any recommendations to inform and support the cabinet in developing its recommendations to Council.

The Committee was invited to consider the proposed capital programme including proposed investment additions for 2018/19 onwards and determine whether to make any recommendations to inform and support cabinet in making its recommendations to council.

The Chief Finance Officer (CFO) invited questions.

In discussion the following principal points were made:

·        A member commented that £7m had already been spent on the Southern Link Road some 20% of the estimated cost.  Assurance was sought that the project was deliverable within budget.

The DECC commented that the budget represented the best estimate but this could not be confirmed until the market was tested and contracts were let  he considered that the appropriate budget had been set to take the project forward.

·        It appeared that there was considerable carry forward of proposals.  It was questioned what the implications of this for delivery of the economic strategy.

The DECC considered that progress was being made on key projects and the timetable for delivery was not having a negative impact on the ecconomy.

·        It was proposed that resources should be found to invest in the model farm development at Hildersley, Ross-on-Wye, a vital infrastructure project.

·        In response to questions the CFO commented that he could provide information on the scoring system used for capital projects and, with reference to paragraph 16 of the report, how various funding sources had been applied to projects.  In terms of borrowing there had been a very slight rise in the cost.  This was being monitored but it was not expected that the rate would rise significantly.

·        The DECC provided further clarification of the capitalisation of funding for the Hereford bypass and how this became a saving on the revenue budget as a result.

·        The stated position had been that the western relief road would be funded by developer contributions but none of these had so far been received.  It was asked what the implications of this were.

The DECC commented that to date contributions had been received from Highways England and Midlands Connect although the majority of funding had been provided by the council.  It had not been envisaged that the project would be fully funded by developer contributions.  It had been expected Central Government grant would support the majority of the funding and the council would need to make some local contribution.  A number of bidding opportunities for government funding were expected over the next 12 months and S106 agreements would be negotiated as the major housing developments for Hereford came forward.

RESOLVED:  That it be recommended that the council makes funding available to enable the model farm development at Hildersley, Ross-on-Wye to proceed.

To review the proposed capital programme including proposed investment additions for 2018/19 onwards and determine whether to make any recommendations to inform and support the cabinet in developing its recommendations to Council.