Report of the Deputy Chief Executive and City Treasurer attached

The Executive considered a report of the Deputy Chief Executive and City Treasurer, which outlined the capital outturn position for 2020/21 including total expenditure and funding, confirmed that funding sources had been managed to best utilise resources available to fund the capital programme; and presented a revised capital programme for the 2022/23 financial year after taking into account the final outturn position as reported.

The main changes to the programme since the report to Executive in June 2021 were as follows:-

·                £29m Highways – The Active Travel Fund and Northern Quarter Cycling scheme have reprofiled £5.1m and £3m respectively into futures years.  In addition, inclement weather and capacity issues with third parties had delayed the Highways Maintenance Programme with £4.5m slipping into 2022/23;

·                £16m Neighbourhoods – This included Beswick Hub Rugby Football League £2.6m reprofiling and £2.2m relating to Indoor Leisure - Abraham Moss. The Manchester Aquatic Centre would reprofile £4.5m into future years to reflect the fact the main contract was signed in April 2022, which had had an impact on the progress on site; 

·                £51m Growth and Development – £7.1m of the Housing Infrastructure Fund (HIF) funding for enabling works in Victoria North would move into 2022/23. There was also £9.3m reprofiling required for Hammerstone Road Depot, and £8.9m Carbon Reduction Programme/Public Sector Decarbonisation Fund With other major variances of £4.1m for House of Sport and £4.4m for Campfield Development;

·                £21m Our Town Hall – This would now be spent in 2022/23 in line with the current programme of works which was agreed and revised after the budget was set;

·                £17m Children’s Services - £11.6m of this related to the revised start on site date for the Co-op Academy in Belle Vue;

·                Expenditure was almost £36m lower than that forecast in the report to Executive in February 2022. The largest change related to the £8.2m reprofiling across the Public Sector Decarbonisation Scheme and the Carbon Reduction programme which had seen delays in designs and contract approvals linked to the supply chains.

Overall, the spend against the approved in year programme of £458.3m was £165m lower

It was reported that the programme had delivered over £293m of capital investment during the 2021/22 and whilst the outturn position was higher than the average spend over the past three years, it represented the continued significant investment in Manchester with over 220 live projects progressing during the year, a major achievement given the impact of the pandemic. 

It was noted that there was no sign of inflationary pressures abating, with companies continuing to issue warnings on future cost increases As such, in addition to a proportion of  the contingent budgets for each major capital project earmarked for inflationary pressures, a further £28m and had been profiled over a number of financial years to reflect the expected timing of any contract increases over the life of the programme.

Unlike the Revenue Budget the Capital Budget was subject to change as new schemes and /or external funding was received.  The budget was prepared in  ...  view the full minutes text for item 50

Report of the Deputy Chief Executive and City Treasurer attached

This report informs Members of the capital outturn position for 2021/22 including total expenditure and funding, confirms that funding sources have been managed to best utilise resources available to fund the capital programme and presents a revised capital programme for the 2022/23 financial year after taking into account the final outturn position.

The Committee considered the report of the Deputy Chief Executive and City Treasurer. The Committee had been invited to comment on the report prior to it being considered by the Executive.

Key themes in the report included:

·                The outturn of capital expenditure for 2021/22;

·                The financing of capital expenditure for 2021/22;

·                The major variances between the 2021/22 outturn and the previous Capital Programme monitoring report submitted in February 2022; and

·                The revised capital programme budget for 2022/23; and subsequent years as a result of the review of the programme following outturn.

Some of the key points that arose from the Committee’s discussions were: -

·                Was the inflation contingency of £28m over the next four years going to be enough given the increasing rate;

·                Would it be possible to have a report on how each capital project contributed to a net zero carbon city;

·                Could information be provided on the spending towards the new proposed residents parking zone in Ancoats;

·                Was the Council still expecting a positive return on investment in regard to The Factory

·                How would spending change on Northwards Housing now that it was back within the Council;

·                Concern was expressed around the economic volatility Manchester residents were facing and whether there would be an effect on Council borrowing if interest rates were to increase;

·                How was social value delivered within the projects;

·                Concern was expressed around the cost of inflation to the construction industry;

·                Why was there a proposed virement of £1.62m from the Newton Heath High Rise Block

·                Could an explanation of maintaining structure of borrowing be given; and

·                Clarification was sought as to the why the cost of refitting the Peterloo Memorial was greater than the total cost of the Emmeline Pankhurst memorial.

The Deputy Chief Executive and City Treasurer advised that it was difficult to accurately assess the level of contingency needed for inflation as the situation was very fast moving and the impact on the supply chain was profound as well.  All major schemes had been reviewed but it would be further in the year before there would be clearer picture of the impact of recent increases in inflation would have.  The Deputy City Treasurer also comment that most of the capital projects had contingency levels built in and it would be these contingencies that would be used in the first instance and the £28m was for anything that couldn’t be covered within the planned contingency levels within each project.

The Deputy Chief Executive and City Treasurer agreed to share with Committee Members the Council’ Low Carbon Build Standard report.  In addition, it was explained that each capital project went through a business case process, with a specific part centred around how the project would contribute towards low carbon and other climate mitigation measures.

In terms of the residents parking zone in Ancoats, the scheme would be included in the Council’s Capital Programme at the point it became fully approved and the funding in place.  At present, this scheme was currently going through  ...  view the full minutes text for item 23