Committee Report: Capital Project Appraisal Cycle for 2007/08 Capital Programme
Report to: |
Cabinet |
|---|---|
Date: |
16th November 2006 |
Subject: |
Capital Project Appraisal Cycle for 2007/08 Capital Programme |
Report of: |
Director of Finance & IT and Assistant Chief Executive |
Contact officer: |
Andrew Taylor – 01942 827243 |
Purpose / summary: |
To update members on the capital appraisal cycle and recommend projects for inclusion in the capital programme 2007/08 onwards |
Alternative options considered and reason for selecting the one recommended: |
Not to approve projects would delay important investment in our services. |
Recommendation / decision: |
To accept into the capital programme those projects listed in Table 1. To commission further feasibility / funding investigation on those projects in Table 2. To accept the reserve list of projects in Table 3 Cabinet’s views are requested with regards to projects set out in Table 4. |
Implications: |
|
Financial: |
Capital Expenditure plans as set out in the report. Each project has been separately appraised and revenue effects are within current budgeted levels. |
Staffing: |
Set out in individual project appraisals |
Policy: |
Pursuance of all of the Council’s strategic objectives |
Equal Opportunities - Has a Diversity Impact Assessment been conducted? |
|
Wards affected: |
All |
Special Interest Members – Which have been consulted |
|
Tracking/Process:
|
Consultation |
Ward Members |
Partners |
|---|---|---|---|
|
Capital Strategy Management Group SMT 27th October 2006 |
- |
- |
Panel |
Overview & Scrutiny |
Cabinet |
Council |
- |
- |
6th November 2006 |
- |
There are no Background Papers to this Report within the meaning of Section 100D of the Local Government Act 1972.
Proper Officer |
David Smith |
|---|---|
Date |
6th November 2006 |
Background
Further to the Council’s Capital Strategy adopted by Council on 7th September 2005 the 2007/08 capital project appraisal process has been carried out. Chief Officers have prepared appraisals for projects which they would like to see come to fruition and be included in future capital programmes.
The contextual setting of the decisions members are asked to make from this report is that in the medium term the Capital Programme has a £2.0 million structural deficit in funding. This clearly reduces the scope for including Capital Projects which do not bring with them sufficient resource cover for their completion. The deficit has been arrived at after taking the following assumptions into account on Capital Receipts.
|
2007/08 (£000’s) |
2008/09 (£000’s) |
|---|---|---|
General Receipts |
2,500 |
2,500 |
Right to Buy Receipts (Usable Proportion) |
2,650 |
2,650 |
Earmarked / Ring fenced |
16,451 |
1,800 |
Total |
21,601 |
6,950 |
Capital Project Management
The scale of investment in Capital Projects is large and a few of the proposals in this report are in the region of £20million. Clearly such projects will be the subject of further detailed reports to members as they progress from inception, through procurement and on to delivery. It is critical that sufficient arrangements are made to ensure adequate management of these projects to ensure delivery on time and on budget.
Prioritisation of Projects
It is a key test of prospective capital projects that they are in line with the achievement of the Council’s strategic objectives. All of the project appraisals which were received in this round of appraisals demonstrated that projects would indeed contribute towards Council objectives. The Capital Strategy Management Group has assessed the appraisals against corporate priorities, and a recommended order of prioritisation against the criteria set out within the Capital Strategy, has been compiled. It has previously been indicated that given the overall position of the capital programme the most likely new programmes and projects will either be government supported or invest to save.
A summary of the projects and recommendations in the following categories is as follows:-
Project |
Project Capital Costs (£000s) |
|---|---|
Adult Services |
|
Integrated Children’s Systems (delivered via Adult Services Dept) |
334.0 |
Mental Health SCE(R) 2005/06 (uncommitted Resources C/F) |
185.5 |
Mental Health SCE(R) 2006/07 (uncommitted Resources C/F) |
144.0 |
Preventative Technology |
511.0 |
Replacement Information Systems |
611.0 |
Children’s and Young Peoples Services |
|
BSF Pathfinder – New Secondary School |
18,500.0 |
Single Site Lamberhead J & I |
1,500.0 |
EBSD Review |
12,793.3 |
Landgate School – Additional Accommodation |
350.0 |
Marsh Green School |
1,025.0 |
Oakfield New School |
5,200.0 |
Sure Start Phase 2 |
4,744.4 |
Housing General Fund |
|
Private Sector Housing – Adaptations (Grant funding) |
780.0 |
Private Sector Housing – Renewal |
4,400.0 |
Bickershaw Travellers Site (A grant of 75% is potentially available from government, this must be confirmed. Balance of funding from existing resources) |
287.0 |
Ince Central Contaminated Land Remediation Phase 3 (Funding support now agreed by DEFRA) |
1,002.0 |
Legal and Property Services |
|
Trencherfield Mill Steam Generating Boiler Replacement (Prudential Borrowing for the Project Approved By Cabinet 06/02/06 Decision on other boiler delayed under scheme funding on retained area) |
177.8 |
Wigan Markets Improvements Plan 2006/07 Phase 1 Project approved by Cabinet 15/12/05 |
466.3 |
Wigan Markets Improvements Plan 2006/07 Phase 2 Further Works made possible by larger than expected capital receipt. |
277.6 |
Planning And Regeneration |
|
Bickershaw Colliery Reclamation |
19,300.0 |
WALH |
|
Completion of ALMO Improvement Programme 2007/09 |
47,100.0 |
Environmental Services |
|
A573 / A58 Platt Bridge |
200.0 |
Birket Bank |
520.0 |
EDZ Dropped Crossing And Tactile Paving |
110.0 |
EDZ Parsons Meadow |
250.0 |
Hindley Town Centre |
475.0 |
Leigh Bus Station |
150.0 |
Leigh To Bolton Phase 4 |
110.0 |
Newton Road / Kenyon Lane |
250.0 |
Ormskirk Road / Fleet Street |
300.0 |
Orrell Post |
250.0 |
Robin Park / Scot Lane |
150.0 |
Shakerley Area Traffic Calming |
125.0 |
St Paul’s Ave |
140.0 |
Standish Town Centre |
215.0 |
Wallgate Pedestrian Improvements |
200.0 |
Whelley Loop Off-Road Cycleway |
370.0 |
Wigan To Ashton A49 |
100.0 |
Cultural Services |
|
Mesnes Park (Commitment to meet shortfall of £500k already approved by Cabinet 24th August 2006) |
2,316.0 |
Pennington Park Visitors Centre (Funded from British Coal compensation) |
230.0 |
Project |
Project Capital Costs (£000s) |
Comment |
Amount Sought from Council Resources (£000s) |
|---|---|---|---|
Goose Green to Westwood Park Link Road |
19,769.0 |
Dependencies around Chinamex proposal. This project forms part of Access Wigan (A5225) Highway proposal |
0.0 |
Ince Central Contaminated Land Remediation Phase 4 -9 |
4,736.0 |
Project will attract support from Defra – later phases presently not approved (Balance from HRA Capital Programme) |
318.0 |
Libraries |
2,000.0 |
Proposed match funding of lottery bid. |
1,000.0 |
The Grange Community Centre at Hope |
1,594.7 |
Further discussions taking place 1st November 2006. |
165.0 |
Grass Pitches – Hesketh Meadows |
160.0 |
£80k funding included in existing Capital Programme but can only be drawn down to match grant bid. |
80.0 |
Grass Pitches Ph2 |
400.0 |
50% Football Foundation grant other external funding to be investigated |
200.0 |
2006/07 Project :- Trencherfield Mill Performance Venue |
7,741.0 |
Further options appraisal being conducted. |
|
2006/07 Project :- Learning & Physical Disability Accommodation Support Unit |
700.0 |
Project scope being reviewed with the intention of re-submitting a revised bid next year |
|
2006/07 Project :- History Shop improvements to Access |
400.0 |
Was £1m but bid now reduced to £400k and expected to be submitted to HLF prior to end of year there is a six to nine month turnaround at the HLF |
|
Project |
Project Capital Costs (£000s) |
Comment |
|---|---|---|
Haigh Roads Improvements |
750.0 |
Currently there is no funding for the scheme |
Heritage Store |
500.0 |
Currently there is no funding for the scheme |
Parks Strategy |
2,500.0 |
Currently there is no funding for the scheme |
2006/07 Reserve Projects :- |
||
Tyldesley Library |
3,812.5 |
Funding gap of £3,562K |
Play Area Renewal |
2,750.0 |
Funding gap of £2,337K |
Turnpike Centre |
750.0 |
Funding gap of £500K |
The following items are presented separately as these are projects which rely upon the successful achievement of capital receipts targets each year in order to finance their expenditure. The Right to Buy capital receipts generated from the sale of Council Houses effectively support the £2.5m / annum disabled persons' aids and adaptations programme. However it is felt that Right to Buy receipts over the next few years are likely to decline. Likewise the Land Disposal Programme, which can often create difficult decisions for the Council, provides resources which enable the Capitalised Repairs programme to be delivered. Therefore, a decision not to sell a high value piece of land should be taken in the context that it would impact directly on the Council's Capital Programme. In the light of changing circumstances and competing demands for capital resources, Cabinet’s view is sought on the continuing support of these programmes.
Project |
Annual Capital Costs £000s |
Comment |
|---|---|---|
Disabled Persons Adaptations (per annum) |
2,500.0
|
This programme has traditionally been supported by Right to Buy capital receipts. The current programme contains provision for the years, 2007/08 to 2009/10. Against the Council’s agreed capital strategy prioritisation criteria this project is effectively dependent upon a decision from members as to its future. In making the decision Members’ attention is drawn to the overall deficit on the capital programme. It is recommended that beyond 2007/08 this provision is reviewed in the light of the circumstances which the Council is likely to face at the time. Therefore as part of the overall capital appraisal process the continuation of the programme at current levels will be assessed against competing demands. |
Capitalised repairs (per annum) |
2,300.0 |
This annual programme has no supporting resource. The current programme contains provision for the years, 2007/08 and 2009/10. Against the Council’s agreed capital strategy prioritisation criteria this project is effectively dependent upon a decision from members as to its future. In making the decision Members’ attention is drawn to the overall deficit on the capital programme. It is recommended that beyond 2007/08 this provision is reviewed in the light of the circumstances which the Council will face at the time. Therefore the continuation of the programme at current levels will be assessed against competing demands. |
Private Sector Housing – adaptations –Non grant funded proportion i.e. 40% |
520.0 |
This proportion of Private Sector DFG has been traditionally met from General Capital resources (Mainly Capital Receipts). The current programme contains provision for the years, 2007/08 to 2009/10. It may be possible to fund all or part of this complementary funding from mainstream PSHR grant which would of course reduce overall spend but also the deficit on the capital programme. It is recommended that beyond 2007/08 this provision is reviewed in the light of the circumstances which the Council will face at the time. Therefore the continuation of this contribution to this programme at current levels will be assessed against competing demands. |
Conclusions and Recommendations.
The Council’s Capital Strategy requires that potential projects and programmes are appraised alongside one another to ensure that members may consider the choices which are available regarding the make up of the capital programme. The Capital Programme’s medium term prospects are that of a £2.0 million structural deficit and this means that projects tend not to be included in the programme unless they bring with them sufficient resource cover to complete them.
The exceptions to that rule are those projects where an emergency situation has arisen and the 2 major annual programmes – aids and adaptations for disabled persons (both for Public & Private Sector Housing) and the programme of capitalised repairs.
Cabinet is asked to consider the proposals set out in tables 1 to 4 and :-
- accept the recommendations for tables 1, 2 and 3.
- In the case of table 4, the views of Cabinet are sought.