Agenda item

Capital Strategy and Budget 2022/23 to 2024/25

Report of the Chief Executive and Deputy Chief Executive and City Treasurer attached

Minutes:

The Executive considered a report of the Deputy Chief Executive and City Treasurer, which presented the capital budget proposals before their submission to the Council.

The Capital Strategy had been developed to ensure that the Council could take capital expenditure and investment decisions in line with Council priorities and properly take account of stewardship, value for money, prudence, risk, sustainability and affordability.

The capital programme 2021/22 to 2025/26 comprised the continuation of the existing programme. For continuing schemes, the position was based on that set out in the report on Capital Programme Monitoring 2020/21, also being considered at this meeting.

Details on the projects within the programme were set out in the report and the full list of the proposed projects was appended to the report.

If agreed, then the proposals contained in the report would create a capital programme of £329m in 2021/22, £533.1.8m in 2022/23, £135.1 in 2023/24 and £36.3m in 2024/25, summarised as follows:-

Forecast Budgets	2021/22	2022/23	2023/24	2024/25	Total	Total 22/23-24/25
	£m	£m	£m	£m	£m	£m
Manchester City Council Programme
Highways	40.9	64.7	0.6		106.2	65.3
Neighbourhoods	35.7	62.7	15.5	0.9	114.8	79.1
The Factory and St John’s Public Realm	42.7	46.4			89.1	46.4
Growth	64.3	95.7	61.3	5.0	226.3	162.0
Town Hall Refurbishment	53.8	86.1	68.1	42.2	250.2	196.4
Housing – General Fund	17.1	27.4	37.0	2.7	84.2	67.1
Housing – HRA	24.7	39.4	31.9	14.6	110.6	85.9
Children’s Services (Schools)	31.1	37.1	1.0		69.2	38.1
ICT	6.4	6.8	1.0		14.2	7.8
Corporate Services	12.3	11.0	0.6	0.5	24.4	12.1
Total (exc. Contingent budgets)	329.0	477.3	217.0	65.9	1,089.2	760.2

Contingent Budgets	0.0	55.8	38.1		93.9	93.9
Total Programme	329.0	533.1	255.1	65.9	1,183.1	854.1

The proposed funding for the programme in 2022/23 was:-

Fund	Housing Programmes		Other Programmes	Total
	HRA	Non-HRA	Other Programmes	Total
	£m	£m	£m	£m
Borrowing	0.0	10.7	335.3	346.0
Capital Receipts	2.0	3.9	16.8	22.7
Contributions	0.0	0.4	30.8	31.2
Grant	0.0	10.6	72.9	83.5
Revenue Contribution to Capital Outlay	37.4	1.8	10.5	49.7
Grand Total	39.4	27.4	466.3	533.1

Based on the current forecasts for expenditure, prudential borrowing of up to £538.9m over the period would be needed to support the Council’s programme in line with the new schemes and previous planning and profile approval. A number of these schemes would be on an invest to save basis and would generate revenue savings.

The proposed funding for the programme across the forecast period was as follows:-

	2021/22 budget	2022/23 budget	2023/24 budget	2024/25 budget	Total
	£m	£m	£m	£m	£m
Grant	86.0	83.5	63.5	0.0	233.0
External Contribution	25.3	31.2	0.2	0.0	56.7
Capital Receipts	16.0	22.7	13.1	2.7	54.5
Revenue Contribution to Capital Outlay	32.4	49.7	33.5	15.1	130.7
Borrowing	169.3	346.0	144.8	48.1	708.2
Total	329.0	533.1	255.1	65.9	1,183.1

The proposed capital programme described within the report was affordable within the existing revenue budget based on the estimated capital financing costs associated with delivering the programme.

There were risks associated with the delivery of the capital strategy, specifically regarding delays to the programme or treasury management risks. Measures were in place to mitigate these risks through both the Strategic Capital Board and the treasury management strategy. Reports would be provided throughout the year to Council, Executive and other relevant committees providing updates on the progress of the capital programme and the risks associated with its delivery and funding.

Decisions

The Executive:-

(1) Approve and recommend the report to Council, including the projects for Executive approval in section 6, and note that the overall budget figures may change subject to decisions made on other agenda items.

(2) Note the capital strategy.

(3) Note that the profile of spend is provisional, and a further update will be provided in the outturn report for 2021/22.

(4) Delegate authority to the Deputy Chief Executive and City Treasurer in consultation with the Executive Leader to make alterations to the schedules for the capital programme 2021/22 to 2024/25 prior to their submission to Council for approval, subject to no changes being made to the overall estimated total cost of each individual project.

(5) Approve the proposed write off two long-term debtors, (EoN Reality £1.1m and Band on the Wall £0.2m) and delegate to the Deputy Chief Executive and City Treasurer to set out the terms and accounting treatment for the write offs.

Supporting documents: