To recommend to Council for approval the revised capital investment budget for 2023/24 onwards.

Cabinet Members considered a report setting out the revised budget for 2023/24 to recommend to Council. 

The Cabinet member for Finance and Corporate Services introduced the report and highlighted:

Investments in the market towns, rural areas, deterioration and condition of the roads.

It will continue to deliver on the ambition of the Council to achieve net zero by 2030 and investment of over £20m in active travel and renewables to support this in the 2024/25 budget.

Delivery of the current Capital Programme 2023/24 is progressing well.  The demonstration centre at Hillside is due to be completed this year and the program of property investment and maintenance of schools are all on target to complete during 2023 and 2024.

Six schools have benefited from installation of solar PV and retrofitting of fuel C households is ongoing.  EV infrastructure is being rolled out and continued investment in wetlands.

A number of changes are proposed due to no funds being assigned to them, these are:

The passenger transport plan, Masters House phase two and the Herefordshire retrofit hub. Confirmed that should appropriate grants be made available then these projects will be reviewed. 

A review took place of existing projects to free up funding these were;

-         Removal of £2m funding for super hubs based on officer’s advice that community hubs are being reviewed and investment at this time would be not be appropriate. 

-         Removal of the development partnership activities budget which frees up £10.2m of corporate borrowing and reserves. 

-          The ‘my account’ budget of £0.4m was underspent in phase one and no projects have come forward for phase two, the budget will be re-allocated. 

-         The BT Fastershire project is coming to an end and will release £5m of corporate borrowing.  It will be replaced by project ‘gigabit’ which is fully funded and run by PD UK.

£17.6m of funding has been made available and can be re-allocated. Combined with £14.2m of unallocated capital receipts, which has been unallocated for 4 years, allows £31.8m to be made available.

New projects were proposed to be added to the capital programme review;

-         The Southern Link Road (SLR) for £12.3m to address congestion of A49. 

-         £3m for the proposal to relocate the library to the Shirehall to fund improvement works to enable the historic building to be opened. 

-         £0.1m to conduct the necessary works to create a care leavers base in the Shirehall annex.

-         £10m to improve the road network to resurface the Highways network. This is in addition to the £2.558m pothole fund and £4.85 highway investment.

-         The Cabinet member set out that they will improve the economy of Herefordshire by working with local partners and businesses.  Confirmed these projects will have no effect on the capital or revenue budgets.

-         Employment land and incubation space. Made up using £7.2m of existing funding and an additional £4.8m from the capital receipt balance.

The local government financial settlement allowed local authorities to use capital receipts to fund transformational expenditure, this permits authorities to use the proceeds from asset sales to fund the revenue cost of projects.  Proposed to use this flexibly to fund up to £1.6m of qualifying transformation expenditure in 2023/24 to generate efficiencies, ongoing savings and reduction in the cost of the service delivery.

Cabinet Members had no questions regarding the report.

Group leaders gave the views of their groups. Concerns were expressed regarding previous overspend in handling of capital projects.  It was expressed the need for funding through appropriate channels, detailed full costings for projects and expectation of scrutiny throughout.  View that the changes to the Capital Programme are being brought in too quickly and business cases are required, which should be published to support transparency.  It was noted that business cases and funding are required before being added to the Capital Programme. 

Some concerns were raised regarding the funding proposed for the Shirehall in the Capital Programme Review due to the outstanding business case. Some views expressed support in light of the potential opportunities for that area of town and the Shirehall.  It was also raised that other options should be considered alongside the SLR and more funding was needed to improve the county’s roads. 

Recommendations were put forward of:

1.             The £2m for Superhub funding be reinstated

2.             No funding to the SLR until a full business case was developed

3.             Publish the decision making process, the survey, prioritisation list and enable input from Parish Councils regarding the road re-surfacing budget

4.             Fund Retrofit hub through capital receipts. 

In response to points made it was noted that:

• It was important that money is put forward for the SLR to enable us to see how it can develop.
• The Cabinet have full faith in officers in advising Cabinet.
• Members of the public have requested more investment in the road infrastructure and the funding allocated will be a positive investment.
• The Shirehall is an asset for Herefordshire. 
• The £2m removal from the Superhub budget was a decision following a review of the talk community hubs.  Prior to the view, expressions of interest were requested by organisations if they wished to become a Superhub.  However, that was just the first step and a full process would have been carried out before moving forward with the applications.  The Superhub project is not dismissed and will be looked at again once a better understanding is obtained as to what is being delivered and what the residents need.
• Noted that the majority of the Capital Programme remains unchanged, it still includes £5m of expenditure on biodiversity, investment in solar PV installation and the retrofitting project.  These projects continue from the previous administration and are positive points which should not to be overlooked. 
• The South Wye Link Road was cancelled by the last administration and a proper bypass is needed.  The SLR is a necessary part of dealing with infrastructure and the traffic coming into Hereford.  Therefore money is required in the Capital Programme to enable this to be developed. 
• Noted that more houses will be built in Herefordshire and therefore the necessary infrastructure is required to support that housing. 

It was unanimously resolved that:

a)     To approve the revised capital programme for 2023/24 attached at appendix C;

b)     The Chief Finance Officer be authorised, following consultation with the Cabinet Member Finance and Corporate Services to make in year amendments to the final value included for the investment project from Wye Valley Trust (WVT). Also the investment project from Hereford and Worcester Group Training Association (HWGTA), based on the final approved business case;

c)     Approve the Flexible Use of Capital Receipts of up to £1.6m in 23/24, to support transformation to generate ongoing revenue savings and reduce service delivery costs in future years; and

d)     The Chief Finance Officer be authorised, following consultation with the Cabinet Member Finance and Corporate Services to make in year amendments to the final value included for the relocation of the library to the Shirehall (if this is the chosen option) based on the final approved business case and utilise the grant award from Stronger Towns Board.