The report of the Deputy Chief Executive and City Treasurer is enclosed.

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 - Hough End Masterplan. A capital budget increase of £11.905m was requested, funded by £4m Grant, £5.499m funded by borrowing on an invest to save basis funded by joint funds held by Manchester City Council and Sport England, £1.832m funded by borrowing on an invest to save basis and £0.574m borrowing for the erection of a two-storey extension to form sports field changing rooms, cafe facilities, flexible club/social/training rooms and gym space following the demolition of the existing building on site, formation of two 3G football turf pitches as well as associated floodlighting and fencing together with a reconfiguration of natural turf pitches, with associated 67 space car park and an additional 60 space overflow car park.

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:-

·                Children’s Services – Education Basic Need Grant. A capital budget increase of £4.056m in 2023/24 was requested, funded by Government Grant.  The grant was paid to local authorities to support the capital requirement for providing new pupil places by expanding existing maintained schools, free schools, or academies, and by establishing new schools. The grant was not time-bound so that the Council could make the best decisions for the city. The Council had received an allocation of £4.056m for 2023-25 and projects brought forward where a need was identified.

·                Children’s Services - Schools Capital Maintenance Programme. A capital budget increase of £4.264m in 2022/23 is requested, funded by Government Grant.  The Council received grant funding each year from the Department for Education for maintenance to the school estate.  Funding would be used to address condition needs identified in the Council’s estate of maintained schools which included community, voluntary controlled and foundation schools.

·                Children’s Services – High Needs Provision. A capital budget increase of £7.658m in 2022/23 and £8.769m in 2023/24 was requested, funded by Government Grant.  The Council received funding from the Department of Education to support the provision of new places and improve existing provision for children with special educational needs and disabilities or requiring alternative provision. The Council has received an allocation of £16.427m allocated over 2022-23 and 2023-24.

·                ICT – Registrars EPOS Solution.  A capital budget decrease of £0.141m in 2022/23 is requested and approval of a corresponding transfer of £0.141m to the revenue budget, funded by Capital Fund.  The scheme would replace the current unsupported electronic point of sale (EPOS) and stock control system with a fit for purpose solution to enable Registrars to continue taking payment and managing the certificate stock on a supported system.

·                Growth and Development – Public Sector Decarbonisation Scheme (PSDS) Phase 3. A capital budget increase of £4.648m in 2022/23 is requested, funded by Government Grant. A capital virement from approved budgets of £1.550m is also requested, funded by Borrowing via the Carbon Reduction Programme.  The Zero Carbon Estate Programme had secured grant funding from the Public Sector Decarbonisation Scheme Phase 3 to deliver a range of energy efficiency and generation measures in Council owned buildings across the City. This project was being delivered specifically to reduce energy consumption within the estate with each building includes measures to decarbonise heat through the installation of Air Source Heat Pumps as a minimum, where feasible additional energy efficiency and generation measures such as LED Lighting & Controls and Solar PV had also been included.   All works were required to be completed by the end of March 2023 to qualify for the PSDS Phase 3 grant funding and match funding was required.

·                ICT – SAP Review. A capital budget decrease of £0.147m in 2022/23 is requested and approval of a corresponding transfer of £0.147m to the revenue budget, funded by Capital Fund.  This proposal was to complete the discovery exercise to determine the correct technology mix to support the future strategic direction of both HR and Finance functions. The work would determine business requirements from a functional and non-functional perspective and underpin the pre-development work to follow.

·                Corporate Services - HR and Finance System Replacement Project. A capital budget increase of £0.525m in 2022/23 and £0.900m in 2023/24 was requested, funded by RCCO – Transformation Reserve.  The programme was a once in a generation opportunity to upgrade the Council’s core finance and HR systems to help drive change to the way it operated its services, managed and reported performance, and interacted with suppliers. The current system, implemented in 2006, would no longer be supported after 2027. The programme was therefore necessary to move Finance, Human Resources and Procurement (procure-to-pay) functions from the current SAP system. This capital scheme would fund and create new roles to support a dedicated programme working group to undertake pre-development work to prepare the organisation for the significant business change associated with replacing finance and HR systems as well as delivering the operational improvements and training associated with the Council’s Future Shape programme.  .

The report highlighted that there had been increases to the programme totalling £2.668m as a result of delegated approvals since the previous report to the Executive on 16 March 2022 and if the recommendations in the report were approved the General Fund capital budget would increase by £42.437m 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:-

·                £2.169m to be allocated for Schools Maintenance work, from Government Grant received, to be carried out in 2022/23;

·                £0.496m from the Asset Management Programme (AMP) for additional funding for the Manchester Equipment and Adaptations Partnership Relocation (Aids and adaptations) project;

·                £0.120m from Education Basic Need funding for the Manchester Secondary PRU (Pupil Referral Unit) to reduce the cost-of-service delivery and improve the quality of estate;

·                £0.093 from grant funding within the Schools Maintenance budget for Peel Hall Primary Emergency Heating Works

The report also provided an update on the Shared Ownership and Affordable Homes Programme (SOAHP) grant award. Since approval of the budget the Council's bid for funding had been approved, thereby, securing a contribution of £6.89m towards the cost of delivering the Councils element of the scheme which was intended to be used to displace the equivalent amount of the HRA funding which had been allocated to deliver the Scheme.

Councillor Leech sought clarity as to whether the £6.89m secured towards the cost of delivering the Councils Shared Ownership and Affordable Homes Programme (SOAHP) would mean that other schemes could be brought forward sooner.

The Executive Member for Housing and Development clarified that there was the potential to bring forward other schemes this as this funding would offset some of the HRA funding which could result in other schemes, such as Silk Street be brought forward

Decisions

The Executive:-

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

·                Neighbourhoods - Hough End Masterplan. A capital budget increase of £11.905m, funded by £4m Grant, £5.499m by borrowing on an invest to save basis funded by joint funds held by Manchester City Council and Sport England, £1.832m by borrowing on an invest to save basis and £0.574m borrowing.

(2)      Approve the following changes to the Council’s capital programme:

·                Children’s Services – Education Basic Need. A capital budget increase of £4.056m is requested, funded by Government Grant.

·                Children’s Services - Schools Capital Maintenance Programme. A capital budget increase of £4.264m is requested, funded by Government Grant.

·                Children’s Services – High Needs Provision. A capital budget increase of £16.427m is requested, funded by Government Grant.

·                ICT – Registrars EPOS (electronic point of sale) Solution. A capital budget decrease of £0.141m is requested and approval of a corresponding transfer of £0.141m to the revenue budget, funded by Capital Fund.

·                Growth and Development – Public Sector Decarbonisation Scheme Additional Funding. A capital budget increase of £4.648m is requested, funded by Government Grant. A capital virement of £1.550m is also requested, funded by Borrowing via the Carbon Reduction Programme.

·                ICT – SAP Review. A capital budget decrease of £0.147m is requested and approval of a corresponding transfer of £0.147m to the revenue budget, funded by Capital Fund.

·                Corporate Services - HR and Finance System Replacement Project. A capital budget increase of £1.425m is requested, funded by RCCO – Transformation Reserve.

(3)      Note the increases to the programme of £2.668m as a result of delegated approvals.

(4)      Note the virements in the programme of £2.878m as a result of virements from approved budgets.

(5)      Note the update on Shared Ownership and Affordable Homes Programme (SOAHP) grant award.