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ITEM EX13

EXECUTIVE – 13 MAY 2003

CAPITAL PROGRAMME 2002/03 TO 2004/05

Report by Head of Finance and Head of Property

Introduction

  1. This report presents the updated financial position of the Capital Programme including the City Schools Reorganisation project. A detailed Capital Programme booklet is circulated with the Agenda. (tables - download as .xls file)

    2. Approved Capital Programme 2002/03 to 2004/05

  2. An overall summary of the gross value of schemes within the approved capital programme is shown below:

    3.  

    2002/03

    £m

    2003/04

    £m

    After 2003/04

    £m

    Total

    £m

    Learning & Culture (Education)

    City Schools Reorganisation

    Social & Health Care

    Environment, Roads and Transport

    Community Safety

    Learning & Culture (Culture)

    Corporate Governance

    38.1

    21.3

    0.9

    33.8

    0.2

    1.3

    6.8

    32.7

    13.1

    4.3

    32.5

    0.1

    0.6

    3.3

    4.4

    2.1

    2.6

    9.3

    0

    0

    0

    75.2

    36.5

    7.8

    75.6

    0.3

    1.9

    10.1

    Total

    102.4

    86.6

    18.4

    207.4

    Financial Position

  3. The financial summary for the main Capital Programme shows an overall funding shortfall in 2002/03 of £6.9m, a surplus of £6.5m in 2003/04 and a further surplus of £21.6m after 2003/04.

  4. The City Schools Capital Programme now shows a surplus of £0.2m in 2002/03. Originally it was estimated that the City Schools Programme would be in deficit by £6.4m at the end of 2002/03. However this has been offset due to a higher than anticipated capital receipt (an additional £4.5m) in respect of Milham Ford School and improved cashflow on grant funding.

  5. The overall financial position for each service block for schemes already within the Capital Programme is analysed below:

    6.  

    2002/03

    £m

    2003/04

    £m

    Net Position

    £m

    After 2003/04

    £m

    TOTAL

    £m

    Education

    Transport

    Social Services

    Environmental, Protective and Cultural Services (EPCS)

    -4.9

    0

    -1.8

    -2.3

    6.1

    -1.8

    2.8

    -2.1

    1.2

    -1.8

    1.0

    -4.4

    12.3

    1.2

    7.8

    0.3

    13.5

    -0.6

    8.8

    -4.1

    Sub Total

    Capitalisation of Revenue

    Discretionary BCA

    Other Adjustments

    -9.0

    1.0

    1.3

    -0.2

    5.0

    0.5

    1.0

    -4.0

    1.5

    2.3

    -0.2

    21.6

     

    17.6

    1.5

    2.3

    -0.2

    Surplus/Deficit (-)

    -6.9

    6.5

    -0.4

    21.6

    21.2

    City Schools Programme Surplus/Deficit (-)

    0.2

    -0.1

    0.1

    -0.1

    0

  6. It was anticipated at the time of the last report in January 2003 that the main capital programme would show a slight deficit of £0.4m in 2002/03. However the capital programme has fallen further into deficit in 2002/03 as a result of slippage in obtaining 3 capital receipts, one of which was deferred in anticipation of a retendering exercise generating a higher receipt, and a delayed developer contribution.

  7. Funds of £7 million had been identified to cover the anticipated cashflow shortfall on the City Schools Capital Programme (Insurance Fund £2.5m, Developer Contributions £2.4m and City Schools Deposits £2.1m). It is now proposed to temporarily use these sums to fund the cashflow shortfall on the main Capital Programme.

  8. The position for each programme area is considered below.

    9. Learning & Culture (Education)

  9. The Education element of Learning & Culture has a deficit of £4.9m in 2002/03, returning to an overall surplus of £1.2m by the end of 2003/04. At its meeting on 28 January 2003, the Executive agreed that Education should be allowed to bring forward new schemes totalling £1.2m in 2003/04, together with schemes totalling £14.5m in 2004/5 and 2005/6. This sum for future years has now reduced to £13.5m due to additional pressures on existing schemes.

    10. City Schools Review

  10. The City Schools Review is now anticipated to be broadly balanced for the remainder of the project. As stated in paragraph 4 above, an additional £4.5m capital receipt was received in respect of Milham Ford. The Council agreed at the outset of the City Schools project that any surplus funding arising from the project should be ring-fenced within Oxford City. Once all the capital receipts have been realised consideration will be given as to the allocation of any surplus funds.

    11. Environment, Roads and Transport

  11. At its meeting on 18 March 2003, the Executive agreed the allocation of £19.927m Transport ACG within programme areas and this is included within the figures. There is likely to be an overall deficit of £1.8m by the end of 2003/04. This is in respect of fees which cannot be funded from the ACG.

    12. Social & Health Care

  12. By the end of 2003/04, the Social & Health Care block is expected to show a surplus of £1m. However this includes a cashflow deficit of £0.3m arising from the transfer of Homes for Older People. It is anticipated that by the end of 2004/05, the Homes for Older People project will have a surplus of £3.5m following sales of land and receipt of lease premiums. This sum will be set aside to defer the date at which the full cost of the HOPs transfer hits the revenue budget.

    13. Other Services (EPCS)

  13. The other services block shows an anticipated shortfall of £4.4m by the end of 2003/04. This shortfall has increased due to approved additions to the programme (additional costs of Broadband (£0.9m), Corporate ICT (£1.0m) and Oxford Castle Archaeological Works (0.3m)) and it reflects the lack of resources available to deal with any capital projects in this area.

    14. Overall Funding Position 2003/04

  14. Overall the main Capital Programme is showing a slight deficit by the end of 2003/04. However Education have been given permission to bring forward new schemes with expenditure totalling no more than £1.2m in 2003/04. This will lead to an overall shortfall of £1.6 million on the programme. This deficit can be covered either by natural slippage on the capital programme, which we normally plan for as £2m, or by additional capital receipts as mentioned in paragraph 15.

  15. The Capital Programme assumes gross receipts of £19.9m will be obtained in 2003/04, including receipts from sale of surplus sites from the City Schools Reorganisation. In addition a lease premium of £5 million in relation to the transfer of Homes for Older People will be received. There is the possibility of some additional capital receipts in 2003/04, which have not yet been taken into account. The receipt of these additional sums would generate some scope for adding new bids to the programme in 2003/04. Clearly 2003/04 will be a tight year and the position will need to be closely monitored. Members will be advised if additional resources become available.

    16. Allocation of Resources

  16. For a number of years the County Council has allocated its capital resources by allowing Learning & Culture (Education) and Social & Health Care to spend all the capital resources available to them. For Transport we have allocated all resources available to the service and additionally provided some funding for capital fees for developing projects in the preparation pool and for schemes funded by developer contributions where no funding was available for these fees. This leaves a fairly small amount available for the EPCS block to cover schemes for Culture, Community Safety and Corporate Governance.

  17. However there is pressure from the DfES for Education to implement a system of option appraisals for capital projects to identify the highest priority projects and the best option to provide for these projects. Also our current methodology does not take account of the relative priority of projects in the EPCS block, where only limited funding is available to deal with significant capital requirements. A new system of allocating capital resources will be considered by the Capital Programme and Asset Management Steering Group and recommendations made to the Executive in due course.

    18. Outstanding Bids

  18. A list of the outstanding capital bids totalling £5.4m for 2003/04 was presented to the Executive as part of the budget process. Included within this are bids for Minor Works within the programme of some £1.470m. Education and Transport both provide their own minor works programmes from within their annual capital guidelines. The Social & Health Care capital programme includes £0.1m for minor works, however there is currently no provision for minor works in 2003/04 for Community Safety, Corporate Governance or Culture.

  19. Additionally a further bid has been put forward by Social & Health Care which was reported to the Executive on 28 January 2003. The bid is £241,000 for IT pressures not included within the Corporate bid for ICT resources. There is a potential further commitment of £75,000 for a project at the Pegasus Theatre, which would be funded from Education resources. There is likely to be a Corporate bid in 2004/05 for Social Housing.

  20. During the 2003/04 budget process, a joint revenue/capital bid was proposed by the Trading Standards element of Community Safety in relation to vehicle overloading checks. £48,000 was added to the revenue budget for staff to undertake this duty, however the capital bid of £22,000 for the relevant weighing equipment required was inadvertently missed off. It is therefore recommended that this sum be added to the capital programme in 2003/04.

  21. The possibility of adding new bids to the capital programme, together with distribution of resources, will be considered by the Capital Programme and Asset Management Steering Group, who will make recommendations to the Executive in due course.

    22. Capital Strategy/Asset Management Plans

  22. The Government has just issued guidance on the Capital Strategy and Asset Management Plans that need to be submitted to the Government Office for the South East by 31 July. If the County Council achieves an above average rating, we will be exempt from having to submit these documents to GOSE again.

  23. An updated Capital Strategy and Asset Management Plan and a 4-year indicative capital programme will be brought to the Executive in June for approval. This will be based on the recommendations of the Capital Programme and Asset Management Steering Group.

    24. RECOMMENDATIONS

  24. The Executive is RECOMMENDED to:

          1. note the report;

          2. approve the temporary use of funds of £7 million originally identified to cover the anticipated cashflow shortfall on the Oxford City Schools Capital Programme to cover the cashflow shortfall on the main Capital Programme;

          3. approve the addition of £22,000 to the Community Safety capital programme in 2003/04 in respect of weighing equipment to undertake vehicle overloading checks;

          4. note that the current shortfall of £1.6m can be met by slippage on the capital programme or additional capital receipts.

CHRIS GRAY
Head of Finance

NEIL MONAGHAN
Head of Property

Background Papers: Nil

Contact Officer: Mike Petty Tel 01865 815622

May 2003

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