13(B) - 1

Item No. 13(B)

Capital Monitoring to 31 December 2007

To: Cabinet

28 February 2008

Main Portfolio Area: Corporate Services

Author of report: Sean Clark, Head of Financial and Property Services

Classification: Non-Exempt

Ward: All

______

Executive Summary

The 2007/08 projected outturn for capital expenditure, as forecast at 31 December, is £11.249 million. The actual expenditure to date was £7.412 million. The 2007/08 projected outturn for capital income, as forecast at 31 December 2007, was £5.039 million. The actual income to date was £0.608 million.

Members will note that there has been considerable slippage in the programme for a number of reasons and these are detailed in paragraphs 14-16 and appendix 1 (080228/CAB0011). The actions outlined in appendix 1 are required if the Council is to deliver its programme into the future. ______

Corporate Priorities

The report supports the priority of “Ensuring that we are well managed, proactive and deliver value for money services”. ______

Report Status

For information. ______

Route to Implementation/Timetable:

Not relevant ______

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Report of the Head of Financial and Property Services cont

Background/Introduction

1. The capital programme for the period 2007/08 to 2009/10 was approved by Cabinet on 8 February 2007 as part of the ‘2007/08 – 200910 Budget’ report. Details of the budget are given in Table A below.

Table A 2007/08 2008/09 2009/10 Estimate Estimate Estimate £’millions £’millions £’millions Capital Expenditure (net grants) 11.548 3.016 3.545 Capital Income 2.600 3.000 3.000

2. Since the budget was set, the figures have now been updated for the year end position. The report to Cabinet on 2 August 2007 'Capital Monitoring Position for the Year Ended 31 March 2007' gave the capital expenditure and income positions outturn figures. The report includes a list of those capital schemes that were not actually completed in 2006/07 and have now been deferred to 2007/08 and those schemes that actually spent more in 2006/07 than was originally forecast, so the remaining budget in 2007/08 is now less than expected.

Capital Expenditure

3. Table B below includes those deferred budgets referred to in paragraph 2 above for the current year. The Original budget has been revised from £11.548 million to £14.988m, an additional £3.440m. The table shows by asset type, details of the original budget, the forecast for the year (at quarter three) and actual expenditure to-date for the period ending 31 December 2007.

Table B 2007/08 2007/08 2007/08 2007/08 2007/08 2007/08 Apr Dec Jun Sep Dec Apr-Dec Original Revised Projected Projected Projected Actual Budget Budget Outturn Outturn Outturn Exp For year For year For year For year For year To Date £’millions £’millions £’millions £’millions £’millions £’millions Fixed Assets 8.944 11.978 11.909 9.790 9.352 6.656 Planned Maintenance 1.547 1.780 1.806 1.084 0.963 0.354 Renovation Grants (net) 0.660 0.702 0.702 0.702 0.604 0.299 Other Grants 0.397 0.528 0.528 0.444 0.330 0.103 Total 11.548 14.988 14.945 12.020 11.249 7.412

4. The budget has now been revised to include:

• a £3 million additional budget was approved by Cabinet on 10 May and Full Council on 23 May 2007 (070510/CAB006), to acquire a property for the Gateway concept. No other additional allocations have been approved this year; • a £604,000 contribution towards the £5 million Museum Redevelopment project. An initial Heritage Lottery Fund bid was unsuccessful but a revised bid is being considered and guidance is required from Members; and • a £150,000 Big Lottery fund capital grant for children’s play schemes at , Pembury and recreation grounds. This will be spent in 2008/09.

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Report of the Head of Financial and Property Services cont

5. The December forecast is £11.249m, £771,000 less than the forecast at quarter two (Cabinet 15 November 2007). Paragraph 8 details those schemes that have now been deferred from 2007/08 to 2008/09+. An additional £98,000 has been received from the government as subsidy towards disabled facility grants.

6. Appendix 1 gives a full reconciliation and explanation of the movement between the revised estimate of £14.988m and the projected outturn at quarter three of £11.249m. The appendix shows which schemes were deferred from 2006/07 to the 2007/08 programme and which schemes have now been deferred to 2008/09. The appendix also gives the progress to-date, recommends future action for certain schemes and shows the different resources that will be required to fund the programme, both from internal and external funding.

7. Schemes identified in the quarter two report as being deferred from 2007/08 to 2008/09+ include:

Fixed Assets • £590,000 Museum Redevelopment Project • £300,000 Goudhurst Play Pitches • £208,000 Play Pitch Improvements - at five recreation grounds • £200,000 Transport Strategy • £180,000 Restructure of Property Portfolio • £178,000 Town Hall Reception Area • £174,000 Various ICT projects • £115,000 Parks Paths – Grosvenor/Hilbert • £110,000 Cinderhill Gypsy Site Improvements • £105,000 Parks Paths Improvements • £104,000 Colebrook Recreation Ground Parking • £102,000 Financial Management IT System (FMS) • £78,000 Play Areas – Hawkenbury and Southview Road, • £70,000 Rusthall Play Area • £44,000 Conservation Area Enhancements

Planned Maintenance • £389,000 Public Conveniences (x7) • £190,000 Cinderhill Gypsy Site Improvements (to be vired to the amount shown above) • £80,000 Hawkenbury Recreation Ground • £43,000 9/10 Calverley Terrace

Grants • £50,000 Play Areas for Parish/Town Council & Voluntary Organisations

8. Further schemes now being deferred to 2008/09+ include:

Fixed Assets • £300,000 Gateway, 8 Grosvenor Road Expected to be open from October 2008 • £74,000 CCTV Knights Park Area • £65,000 Transport Strategy

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Report of the Head of Financial and Property Services cont

Planned Maintenance • £50,000 Putlands Sports Centre • £36,000 St Johns Recreation Ground • £31,000 Café • £25,000 Crematorium Chapel • £8,000 Camden Centre • £4,000 Hilbert Changing Rooms

Grants • £114,000 Community Investment Fund

9. Total net expenditure as at 31 December was £7.412 million. This figure is net of £561,000 in grant funding already received, but where further expenditure will arise in the remainder of the year. The main items of expenditure to-date include:

Fixed Assets • £3,344,000 North Farm Depot • £2,501,000 Gateway • £396,000 TN2 Community Centre, Sherwood • £170,000 St Johns Recreation Ground Play Area • £112,000 Parks Paths - The • £75,000 IEG Strategy 2007-20111

Planned Maintenance • £83,000 Town Hall • £68,000 Tunbridge Wells Sports Centre

Grants • £200,000 Disabled Facility Grants (net) • £99,000 Home Improvement/Empty Property Grants • £59,000 Community Investment Fund (see para 11)

10. The large schemes in the 2007/08 programme, where expenditure is expected to occur in the remainder of the year are:

Fixed Assets • £1,109 North farm Depot Construction • £440,000 IT (IEG, ADS and PAI) • £384,000 Financial Management System • £199,000 Gateway • £118,000 Conservation Area Enhancements (Goudhurst, Benenden, Iden Green) • £106,000 Parks Paths Improvements (Grove,Nevill,St Johns Rec) • £50,000 Replacement Recycling Vehicle • £48,000 Assembly Hall Box Office IT System • £46,000 Recycling Sites Refurbishment • £37,000 Musuem & Art Gallery

Planned Maintenance • £192,000 St Johns Sports Centre • £94,000 Town Hall • £87,000 Crematorium Cremators • £37,000 Showfields

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Report of the Head of Financial and Property Services cont

Grants • £260,000 Disabled Facility Grants (net) • £143,000 Home Improvement/Empty Property Grants • £136,000 Community Investment Fund • £71,000 Heritage Grants

11. The Community Investment Fund totals £314,000 and is an amalgam of previous grants budgets to allow a prioritisation of awards against the total fund available. These criteria will be developed alongside the review of grant processes. To date £64,000 has been spent and a further £76,000 committed, a total of £140,000. £114,000 of the budget has now been deferred for use in 2008/09.

Paid • £42,339 Langton Green Village Hall • £9,796 Linden Park Cricket Club – new pavilion • £5,000 Pembury Athletic Youth Football Club – new pavilion • £4,000 Cranbrook Parish Council – Disabled Access Grant • £1,368 Sissinghurst Village Hall (St Georges Institute) – Disabled Access Grant • £1,292 Tunbridge Wells Commons Conservators – All Ability Paths

Committed • £30,204 Linden Park Cricket Club – new pavilion • £25,000 Pembury Bowls Club – new clubhouse • £11,000 Artificial Pitch at Mascalls School • £7,661 Langton Green Village Hall • £2,632 Sissinghurst Village Hall (St Georges Institute) – Disabled Access Grant

Capital Income

12. The forecast for the year, as at December 2007, is £5.039m, an additional £2.214m on the original estimate and £224,000 on the quarter two forecast. The increase is mainly to the £3.479m receipt from the sale of the Medway Depot site being deferred from 2006/07. However some receipts expected in 2007/08 have now been deferred to 2008/09. Table C gives a breakdown of the budget and actual receipts to-date.

Table C 2007/08 2007/08 2007/08 2007/08 2007/08 Apr Jun Sep Dec Apr-Dec Original Approved Projected Projected Actual Budget Budget Outturn Outturn Income For For year For year For year To date year £’millions £’millions £’millions £’millions £’million s Sale of Land & Property 2.600 6.079 4.468 4.526 0.104 Mortgage Repayments 0.025 0.025 0.025 0.025 0.019 DIYSO – Moat Housing 0.000 0.000 0.089 0.089 0.089 Renovation Grant Repayments 0.000 0.001 0.004 0.007 0.004 Total 2.625 6.105 4.586 4.647 0.216

Planning Contributions 0.200 0.200 0.229 0.392 0.392 Total 2.825 6.305 4.815 5.039 0.608

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Report of the Head of Financial and Property Services cont

13. Total receipts as at 31 December were £0.608m. Receipts received in the third quarter totalled £169,274 and included:

(i) Sales of Land and Property Nil

(ii) Mortgage Receipts Total £6,250

(iii) Planning contributions:

Youth & Adult • £31,798 Former Gas Works, Sandhurst Road • £26,736 Kentish Gardens, Broadwater Down • £21,708 Greyhound PH, 131 Upper Grosvenor Road • £15,075 Borderigg, Benhall Mill Road • £14,472 Land adj Laburnum Court, Sandhurst Road • £3,618 177 Forest Road

Children’s Play Area • £49,797 Former Gas Works, Sandhurst Road

Review of the Capital Programme

14. Cabinet have agreed to review the capital programme in light of the Council’s priorities. Members should be aware from Appendix 1 of the significant variances that are appearing within the capital programme and that any review needs to bring back a realistic timescale for the various projects.

15. Although it is recognised that some of these variances have occurred through poor planning and/or profiling, some have arisen through uncertainty. Current examples include direction relating to the Museum works since the failure of the lottery bid and the public conveniences that are not DDA compliant. Appendix 1 clearly indicates the need for direction on these and other matters.

16. A further area where variances occur is the inclusion of sums that will be met from external contributions if secured. The budget report to Council has recommended that these be delegated to the Head of Financial and Property Services, in consultation with the Portfolio Holder for Corporate Services and any other relevant Portfolio Holder, for inclusion once the funding has been achieved.

Cross Cutting Issues

Legal

17. Under Section 151 of the Local Government Act 1972 (LGA 1972), the s151 officer has statutory duties in relation to the financial administration and stewardship of the authority, including advising on the corporate financial position and providing financial information.

Finance and other resources, including ICT

18. The report updates on the Authority’s net capital cash flow for each quarter, details ICT expenditure and shows how the expenditure will be funded from internal and/or external sources.

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Report of the Head of Financial and Property Services cont

Staffing

19. None.

Value for money

20. The report sets out whether capital scheme expenditure was within the original budget allocation or required additional funding.

Risk Management

21. To ensure that the capital programme remains within the Council’s Medium Term Financial Strategy and resources available.

Equalities

22. The planned maintenance programme includes DDA works to seven public conveniences and recognises the need for improved access to the museum.

Safer & Stronger Communities

23. See projects included under the ‘Develop Safer & Stronger Communities’ priority.

Environment/Sustainability

24. See projects included under the ‘Care for our Environment’ priority.

Human Rights Act

25. None.

Communication and Consultation

26. Key projects have been discussed with Heads of Service and other relevant staff.

Conclusions

27. The report sets out the updated forecast positions for capital expenditure and income as at the quarter three position. Significant expenditure and income is still required in the final quarter of the year to meet these forecasts.

Recommendations -

(1) That Members acknowledge that significant expenditure is still required in the remainder of the year to achieve the revised budget position;

(2) That Members support the actions proposed in the Key Variances Appendix 1; and

(3) That officers report back on a revised programme, including greater detail on forecasting.

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Report of the Head of Financial and Property Services cont

Reasons for recommendation:

To help achieve the capital expenditure and income plans as set out in the original budget for the year.

Contact Officer: Ross Sutton, Acting Chief Accountant (ext 3375) ______

Sean Clark Head of Financial and Property Services

Appendices: Appendix 1 - Key Variances 2007/08 as at 31 December 2007

Backgound Papers: Budget Report 2007/08 – 2009/10 (070221/CAB003) Medium Term Financial Strategy Report (070221/CAB004)