Agenda item

Agenda item

Capital Budget Monitoring 2020/21

The report of the Deputy Chief Executive and City Treasurer was to follow and is now enclosed.

Minutes:

The Deputy Chief Executive and City Treasurer's report informed us of the revised capital budget 2020/21 to 2023/24 taking account of agreed and proposed additions to the programme, profiling changes, and the latest estimates of forecast spend and resources for the 2020/21 capital programme. The report explained the major variations to forecast spend, and any impact that variations had on the five-year Capital Programme.

 

The forecast of expenditure for 2020/21 for the Manchester City Council capital programme was £471.4m, compared to a proposed revised budget of £471.5m. Spend as of 2 July 2020 was £140.2m, which included financial support of £106.5m provided to the Manchester Airport Group, which had been agreed by the Deputy Leader of the Council in April 2020.

 

Appended to the report was a schedule of projects within the overall capital programme where the allocations needed to be revised and funding allocations vired between projects. The appendix showed the virement needed for each scheme and each project. We agreed to approve all the proposed virements, including those over £500,000.

 

The report also proposed changes to some of the capital expenditure, financing and borrowing prudential indicators. These changes were agreed.

 

Indicator

Original

Revised

Forecast Capital Expenditure (Non-HRA)

£339.6m

£453.7m

Forecast Capital Financing Requirement (Non-HRA)

£1,543.1m

£1,637.1m

Maturity Structure of Borrowing - Upper Limit for 10 years and above

40%

20%

 

A means of assigning relative priority to capital projects within the overall programme was put forward in the report so as to incorporate role that capital investment would play in the recovery plan for the City and the number of strategic priorities the Council was committed to. It was proposed that priority be given to projects that would:

·         be catalytic for growth;

·         support job creation;

·         reduce of carbon emissions

·         encourage housing development

·         bring about place-based transformation of health, economic and social outcomes

 

These addition factors would also be taken into account:

·         creating or supporting the delivery of revenue savings;

·         avoiding additional revenue cost; or

·         increasing revenue income through, for example, increasing the council tax or business rates tax base.

 

That proposal was supported.

 

Decisions

 

1.         To approve, under the emergency provision of the Council Decisions on 25th March 2020 - “Constitutional Amendments and Other Matters for Council Business Continuity - Part 7”, the virements over £0.5m between capital schemes as set out in the appendix to these minutes.

 

2.         To approve the revised prudential indicators as shown above.

 

3.         To approve virements under £0.5m within the capital programme as set out in the appendix to these minutes.

 

4.         To support the prioritisation process proposed in the report and to approve that these projects should proceed accordingly:

·         Piccadilly Gardens phase 1

·         Hammerstone Road depot redevelopment - subject to a full review of the requirements of what the Council needs from the depot and the scale of the office space to be reconsidered.

·         Medieval Quarter investment

·         Abraham Moss rebuild - it is estimated that there is an inflationary cost increase of £2.7m following the deferral and due to the impact of COVID-19. This is one of the proposals in the update report elsewhere on the agenda

·         Gorton Hub - subject to contract review to include provisions for COVID, and potential rescoping of the scale of the project with partners

·         West Gorton Park

·         Manchester Aquatic Centre - agree to progress to RIBA Stage 4, subject to review of potential maintenance costs if start date for works is deferred

·         National Cycling Centre - agree to progress to RIBA Stage 4

 

6.         To note that approvals of movements and transfers to the capital programme, will reflect a revised budget total of £471.5m and a latest full year forecast of £471.4m. Expenditure to the end of June 2020 was £30.7m. Expenditure as at 2nd July 2020 was £140.2m which includes the support for Manchester Airport Group.

 

7.         To note the prudential indicators at Appendix C of the report.

 

 

Supporting documents: