Agenda item

Agenda item

Capital Outturn Report

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 consultation and would be added into the programme at the point it was agreed and signed off.


It was reported that the Council was still expecting a positive economic return for The Factory, but it was acknowledged that there was a pressured budget for the project given the inflationary pressures the Council was facing.


In regard to Northwards Housing, some of the work the Council would be doing would be around the Capital Investment Programme for the estate.


The Deputy Chief Executive and City Treasurer shared the Committee’s concern on the impact to residents that the increase in inflation was having.  She commented that the Council was not able to mitigate against everything but would work hard to target its resources that it had in the most effective way possible.  It was reported that in relation to borrowing, whilst the financing for the current approved programme was affordable,  any future capital programme schemes and the ability to deliver some new projects may  be constrained by the level of funding available.


The Deputy City Treasure advised that each capital project had a 20% weighting of the tender in relation to delivering social value as part of the project.   It was often up to the contractor as to what form this would be delivered but there had been a focus on job creation, apprenticeships, skills training as well as local works and volunteering days.  In addition, there was a further 10% weighting around contributing to a low carbon city, both of which were monitored throughout the life of the project.


The Deputy City Treasurer provided an explanation of what was meant by maintaining structure of borrowing and also agreed to provide details on the virement at Newton Heath High Rise Block, but in essence this was due to a potential underspend on the work undertaken.  Furthermore, he clarified that the cost allocated to refitting the Peterloo Memorial was the total available funding available figure and would not necessarily cost the total value as stated in the report.




The Committee note the report.

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