Report of the Deputy Chief Executive and City Treasurer attached

The Executive considered a report of the Deputy Chief Executive and City Treasurer, which informed Members of requests to increase the capital programme, sought approval for those schemes that could be approved under authority delegated to the Executive and asked the Executive to recommend to Council proposals that required specific Council approval.

The proposals which required Council approval were those which were funded by the use of reserves above a cumulative total of £2 million, where the use of borrowing was required or a virement exceeded £0.5m. These included the following proposed changes:-

·                Neighbourhoods – Manchester Aquatic Centre.  A capital budget virement of £0.996m in 2023/24, £1.934m in 2024/25, funded by borrowing via the Inflation Budget and a capital budget increase of £0.070m in 2025/, funded by borrowing, for the rephasing of refurbishment works following the successful application to host the World Para Swimming Championships in 2023.

·                Neighbourhoods – Indoor Leisure (Abraham Moss).  A capital budget virement of £0.980m in 2022/23 and £0.420m in 2023/24, funded by borrowing via the Inflation Budget to account for additional inflation costs in labour and materials incurred by the main contractor procuring the construction packages in line with the procurement programme following a delay in the project.

·                Growth and Development – Hammerstone Road Depot.  A capital budget virement of £2.267m in 2023/24 and £0.053m in 2024/25, funded by borrowing via the Inflation Budget and a capital budget increase of £4.280m in 2024/25, funded by borrowing for increased works required alongside inflationary pressures.

The proposals which did not require Council approval and only required Executive approval were those which were funded by the use of external resources, use of capital receipts, use of reserves below £10.0m, where the proposal could be funded from existing revenue budgets or where the use of borrowing on a spend to save basis is required.  The following proposals required Executive approval for changes to the City Council’s capital programme:-

·                Private Sector Housing – Housing Affordability Fund (HAF).  A capital budget increase of £9.111m, funded by £1.997m External Contribution – S106 and   £7.114m Capital Receipts to help continue to deliver further homes for families and individuals living in temporary accommodation.

·                Growth and Development - Essential Remediation Works at the City Art Gallery and Queens Park Conservation Studios.  A capital budget increase of £4.5m in 2022/23 funded by Capital Receipts and a capital budget virement of £1.950m funded from the Asset Management Programme (AMP) budget to  progress feasibility works and to develop a composite programme of works.

·                ICT - Resident and Business Digital Experience (RBDxP).  A capital budget decrease of £0.651m and corresponding transfer of £0.651m to the revenue budget, funded by Capital Fund to progress the RBDxP project which would  transform the way the Council interacted with residents, businesses, and partners whilst improving efficiency.

·                ICT - Legal Services Case Management Replacement.  A capital budget decrease of £0.450m and approval of a corresponding transfer of £0.450m to the revenue budget, funded by Capital Fund to progress the scheme.

·                Public Sector Housing – Silk Street.  A capital budget increase of £0.109m in 2022/23, £0.238m in 2023/24 and £0.153m in 2024/25, funded by HRA Reserve due to increased cost pressures to labour rates, mechanical and electrical works and superstructure work packages.

·                Growth and Development – House of Sport.  A capital budget reduction of £1.256m funded by borrowing on an invest to save basis. A funding switch of £0.183m External contribution, £0.533m Invest to Save (Waterfall Fund) and £1.990m Capital from a virement from Asset Management Programme (AMP) offsetting £2.706m of Borrowing on an invest to save basis due to changes to the scope changes of the project a consequence of the scheme being reduced in scale in response to the impact of the Covid-19 Pandemic on new ways of working.

The report highlighted that if the recommendations in the report were approved the General Fund capital budget would increase by £14.114m across financial years which would also result in an increase in the prudential indicator for Capital Expenditure in corresponding years.

Approval had also been given for the following capital budget virements:-

·                £0.526m to be allocated for SEND Expansions – Birches, Lancs & Rodney House from Unallocated Education Basic Need budget. This project would deliver 44 additional school places across the three locations.

·                An allocation from Education Basic Need funding of £2.4m for Manchester Enterprise Academy – September 2022 Bulge Class. This project would create an additional 60 bulge class places at Manchester Enterprise Academy to meet demand for year 7 pupils in September 2022.

·                £0.109m for urgent repairs to the heating system at St. John’s Primary School funded from grant funding within the Schools Maintenance budget.

·                £0.214m from the unallocated Schools Maintenance budget has been approved for urgent repairs to the hall/dining room roof at Broad Oak Primary School.

The report also provided an update on the Levelling Up Fund bid as part of the wider strategic regeneration programme for Wythenshawe Town Centre, and update on the progress of Phase 1 development for This City at Rodney Street (Ancoats and Beswick Ward) and an update on the applicable interest rates now payable in relation to a number of historic mortgages, provided for specific regeneration schemes in the north of the city due to them having reached the end of the intended term

Councillor Leech sought clarification on the proposed length of time to recover the cost of the Hammerstone Road depot refurbishment through savings and was there any concerns about the potential of being able to meet all the costs over and above the grants that could become available in relation to the Levelling Up bid.

The Executive Member for Housing and Development explained that the proposed redevelopment for Wythenshawe was not solely dependent on the Levelling Up bid and that this would only help accelerate the wider master plan for Wythenshawe, which would be delivered with funding from a number of investors.  In addition the Deputy Chief Executive and City Treasurer, in her capacity as the Council’s Section 151 officer was confident that the that the Council had sufficient budget to deliver the scheme and that any costs over and above the grant funding could be met by the Council.  The Chief Executive added that if the bid was successful, a request for funding would be submitted to the Council’s capital approval process and would be reported to the Executive for approval.

Decisions

The Executive:-

(1)      Recommend that Council approve the following changes to Manchester City Council’s capital programme:

·                   Neighbourhoods – Manchester Aquatic Centre. A capital budget virement of £2.930m, funded by borrowing via the Inflation Budget and a further capital budget increase of £0.070m, funded by borrowing.

·                   Neighbourhoods – Indoor Leisure – Abraham Moss. A capital budget virement of £1.4m, funded by borrowing via the Inflation Budget

·                   Growth and Development – Hammerstone Road Depot. A capital budget virement of £2.320m, funded by borrowing via the Inflation Budget and a further capital budget increase of £4.280m, funded by borrowing.

(2)      Under powers delegated to the Executive, to approve the following changes to the Council’s capital programme:

·                   Private Sector Housing – Housing Affordability Fund (HAF). A capital budget increase of £9.111m, funded by £1.997 External Contribution – S106 and £7.114m Capital Receipts.

·                   Growth and Development - Essential Remediation Works at the City Art Gallery and Queens Park Conservation Studios. A capital budget increase of £4.5m, funded by Capital Receipts, and a capital budget virement of £1.950m funded from the Asset Management Programme (AMP) budget.

·                   ICT - Resident and Business Digital Experience (RBDxP). A capital budget decrease of £0.651m and approval of a corresponding transfer of £0.651m to the revenue budget, funded by Capital Fund.

·                   ICT – Legal Services Case Management Replacement. A capital budget decrease of £0.450m and approval of a corresponding transfer of £0.450m to the revenue budget, funded by Capital Fund.

·                   Public Sector Housing – Silk Street. A capital budget increase of £0.500m, funded by HRA Reserve.

·                   Growth and Development – House of Sport. A capital budget reduction of £1.256m funded by borrowing on an invest to save basis. A funding switch with £0.183m External contribution, £0.533m Invest to Save (Waterfall Fund) and £1.990m Capital receipts from a virement from Asset Management Programme (AMP) offsetting £2.706m of Borrowing on an invest to save basis.

(3)      Note the virements in the programme of £3.249m as a result of virements from approved budgets.

(4)      Note the assurances the Deputy Chief Executive and City Treasurer will be required to provide as part of the proposed Levelling Up Fund bid.

(5)      Note the update on This City, and the use of the existing revenue budget to continue to develop proposals for a second site

(6)      Note the change to the applicable mortgage rate.