Agenda item

To receive the 2024/25 General Fund Capital Budget Monitoring Report for Quarter 1

The Service Director, Finance & Procurement, Nicola Hix, gave a report on the General Fund Budget Monitoring Report for the end of June 2024, Q1, Month 3 which included a forecast of the 2024/25 year-end spend (Outturn) against the Council’s approved Capital Programme Budget. The report also explained to Members the projected variations against individual projects and the Programme as a whole.

It was noted that the revised capital programme was approved by Members in February 2024 alongside the MTFP for 2024/25. The report detailed how the programme had changed since February 2024 and that it had been updated to include the carry forwards from 2023/24.

Items of note within the report were:

• The forecast outturn for 2024/25 as at the end of June was spend of £195.0m against an original budget of £268.7m, therefore giving a forecast outturn variance of £73.7m. The total budget incorporates the slippage from 2023/24 of £196.890 which has been reprofiled over the current and future years.
• As per the Capital Outturn Report from 2023/24, it has been suggested that a further review of the schemes included in this programme should be carried out during the year due to the significant slippage incurred, but also to ensure that the Council has the capacity to be able to deliver schemes agreed in prior years. This review may lead to the capital programme reducing and therefore forecast spend for the financial year reducing.
• Finance have been working closely with budget holders to review their capital schemes to try and forecast more accurately the spend this year and future years. The initial effect can be seen with the £73.7 reprofiling above. This will also allow the Treasury Management Team to forecast more accurately the borrowing requirement for the year.

The report also stated the following that there have been additions of £11.400m to the capital programme as follows:

• £6.092m of Department for Transport grant funding towards Highway capital improvements. This has been allocated from the DfT’s Network North reallocations.

• £2.797m of Department for Education grant funding from their High Needs Capital Allocations.
• £1.865m of Department for Education grant funding towards Homes for Children.
• £0.645m of Department for Education grant funding towards Schools DFCG projects.

It was noted that one virement (budget transfer) had been processed in the quarter which was £0.528m of grant approval from Highways Major Projects to Yeovil Refresh to aid in the delivery of walking and cycling initiatives.

The Committee were taken through the financing of the 2024/25 forecast and noted that 76% of the in-year capital spend was funded by grants and third-party contributions.

In the discussion which followed, the following comments were made:

• Borrowing is only done as and when needed, not in advance of the capital programme.
• Need to review whether the Council still has the resources to deliver on the schemes within the agreed timescales.
• The budget would need to be reviewed at the same time it is re-profiled and re-assessed to see if it needs to be downsized to fit in with the fewer resources available.
• The Council has to do a partial exemption calculation. As the Council receives some exempt income, we calculate to make sure we are not claiming back more VAT than we should. If we get this wrong it can be costly.
• Detail requested on the slippage of budget to future years for such things as road maintenance. There is a risk of reputational harm if these keep slipping, year after year.

At the conclusion of the discussion Members noted the report and the Chair summed up the discussions.