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Division(s): N/A

ITEM EX6

EXECUTIVE – 11 NOVEMBER 2003

CAPITAL PROGRAMME 2003/04 TO 2005/06

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 (download as .xls file). The Capital Programme has been updated to include those schemes approved by the Executive at the meeting on 2 September 2003 and further education projects as part of their available resources.

  2. The report also includes an update on the Review of Assets, options and priorities for capital resources from 2004/05 and an overview of the new Prudential Guidelines which will be implemented from 2004/05.

    3. Approved Capital Programme 2003/04 to 2005/06

  3. An overall summary of the gross value of schemes within the approved Capital Programme (see page 2 of the booklet) is shown below:

    4.  

    2003/04

    2004/05

    After 2004/05

    Total

     

    Learning & Culture (Education)

    City Schools Reorganisation

    Social & Health Care

    Environment, Roads & Transport

    Community Safety

    Learning & Culture (Culture)

    Corporate Governance

    £m

    41.9

    16.1

    6.2

    32.9

    0.2

    0.9

    4.8

    £m

    16.2

    2.5

    4.4

    20.3

    0

    0

    0.1

    £m

    4.1

    0

    0

    1.4

    0

    0

    0

    £m

    62.2

    18.6

    10.6

    54.6

    0.2

    0.9

    4.9

    Total

     

    103.0

    43.5

    5.5

    152.0

    Financial Position

  4. The overall financial position and that for each service block for schemes already in the Capital Programme is analysed below:

    5.  

    2003/04

    2004/05

    Net Position

    After 2004/05

    Total

     

    Education

    Transport

    Social Services

    Environmental, Protective & Cultural Service (EPCS)

    £m

    -0.1

    -1.3

    -1.4

    -3.1

    £m

    2.3

    -0.3

    4.8

    0.8

    £m

    2.2

    -1.6

    3.4

    -2.3

    £m

    7.0

    0.6

    5.9

    0.3

    £m

    9.2

    -1.0

    9.3

    -2.0

    Sub total

    Capitalisation of Revenue

    Discretionary BCA (allocated)

    Capital Reserve

    Other Adjustments

     

    -5.9

    0.5

    1.0

    0.3

    7.6

     

     

    1.7

    0.5

    1.0

    0.3

    13.8

    1.5

     

     

     

     

    -0.1

    15.5

    2.0

    1.0

    0.3

    -0.1

    Surplus/Deficit (-)

    -4.1

    7.6

    3.5

    15.2

    18.7

    City Schools Programme

    Surplus/Deficit (-)

     

     

     

    1.7

     

     

    -1.0

     

     

    0.7

     

     

    0.1

     

     

    0.8

    Overall surplus/Deficit(-)

    -2.4

    6.6

    4.2

    15.3

    19.5

    2003/04 Funding Position

  5. The overall funding position for the capital programme in 2003/04 shows a potential deficit of £2.4m. This allows for the repayment to the City Schools Capital Reserve of £4.9m utilised to fund the capital programme in 2002/03. Please note that the capital programme booklet excludes the repayment of the capital reserve and shows a surplus of £2.5m before allowing for the repayment.

  6. The programme then has a surplus of £6.6m in 2004/05, and a further £15.3m in 2005/06.

  7. The repayment to the City Schools Capital Reserve consists of two items, a £2.5m surplus from the Insurance Fund and £2.4m interest on reserves. In extremis we could defer repayment of the interest on reserves until 2004/05 to balance the programme or make use of variations discussed in paragraph 7 below. However the £2.5m surplus from the Insurance fund is required in the 2003/04 revenue budget.

  8. There are other potential variations to the Capital Programme funding position in 2003/04 as follows:

      Slippage of capital payments into 2004/05 could potentially improve the funding position in 2003/04 by around £2m.

      Slippage of capital receipts into 2004/05 could potentially worsen the funding position in 2003/04. We are working with W.S. Atkins to minimise the risks in the area, and are currently not anticipating a major problem. The Executive will be made aware of any changes to this position.

    We are anticipating a further improvement in the capital receipts obtained from the sale of surplus Oxford City School sites in 2003/04, this improvement will go some way to meeting any funding shortfall in 2003/04 to cover slippage in other receipts.

  1. Taking account of all the above factors we anticipate the Capital Programme being in balance at the end of 2003/04 after allowing for the full repayment to the City Schools Capital Reserve of £4.9m.

    2. 2004/05 Funding Position

  2. The overall funding position for 2004/05 shows a surplus of £6.6m. Of this surplus some £2.9m relates to a surplus on the capital transactions of the HOPs contract.

  3. Council policy is to put this surplus into a reserve, which will be used to defer the date that the full cost of the HOPs contract impacts on the revenue budget.

  4. After allowing for this there is a surplus remaining of £3.7m of which some £2.2m relates to Education. Under accepted practice Education would be able to bring forward projects to the value of £2.2m to balance their programme against the resources available. We will be reviewing this position with the introduction of Prudential Guidelines in 2004/05.

  5. The funding position for 2004/05 allows for a payment to the DfES in respect of surplus receipts arising from the City Schools Reorganisation. Discussions have taken place with the DfES recently and it may be possible to give an oral update at the meeting.

  6. The overall financing position on both the Capital Programme and revenue budget (as reported to the Executive on 28 October 2003) is considered in an overview report also on the agenda.

    7. Capital Programme Options and Priorities

  7. As part of the budget process for 2004/05, Directorates have identified a significant number of capital options and priorities covering the years 2004/05 to 2008/09. The options and priorities for 2004/05 total around £48m excluding Transport, and are attached at Annex 1 (download as .xls file) for information. These bids will be considered for inclusion in the Capital Programme for 2004/05 as we receive more information from the Government on the likely level of support for our Capital Programme.

  8. The capital options and priorities will be considered by the Capital Programme and Asset Management Steering Group and recommendations will be brought to the Executive in January.

  9. At this stage it is recommended that no new schemes be added to the Capital Programme until the Steering Group have made their recommendations.

  10. The introduction from April 2004 of the new Prudential Guidelines for capital will impact on the Capital Programme, as we will be able to undertake additional borrowing above the Government supported level to help fund the Capital Programme from 2004/05.

  11. A summary of some of the main implications arising from Prudential Guidelines is attached at Annex 2, full details will be brought to the Executive in January.

    12. Review of Assets

  12. The Review of Assets is progressing on programme. On 20 October a Workshop was held with members and potential partner organisations to consider how the Council’s property portfolio might be structured in the future, and in particular to look at how sharing between Directorates and with partner organisations might be achieved to provide better efficiency and local accessibility to services. The conclusions of the Workshop, together with all of the other work which is being done as part of the Review, will be used to prepare a report to the Executive on 27 January giving options for the rationalisation of the Council’s property assets.

  13. This should not been seen as a Review restricted to use of property. It is considering how the Council’s property assets should be used in the future in the best way to provide services. It is about how services are provided and how staff and members are enabled to undertake their duties in the most efficient way. Property cannot be treated in isolation from ICT, Customer Services and Information Management. All of those aspects are being incorporated into the Review.

  14. The Review is likely to involve important decisions on the way services are provided, the use of resources including potentially substantial investment, and working arrangements for staff. There will need to be full consideration of the options, implications of any preferred way forward, resourcing and managing the changes. The Forward Plan for the Executive meeting on 27 January 2004 also includes major reports on the Oxfordshire Plan and the Budget. It is therefore intended that the report on the Review of Assets will deal primarily with the strategic issues, and that the more detailed aspects initially be considered by the Corporate Governance Scrutiny Committee.

    15. RECOMMENDATIONS

  15. The Executive are RECOMMENDED to:

          1. note the report;

          2. ask the Capital Programme and Asset Management Steering Group to consider the capital options and priorities for 2004/05

CHRIS GRAY
Head of Finance

NEIL MONAGHAN
Head of Property

Background Papers: Nil

Contact Officer: Mike Petty Telephone: 01865 815622

November 2003


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