|
Title |
Quarter 2 (30 September 2024) Capital Monitoring report |
|
Purpose of the report |
To note |
|
Report Author |
Mahmud Rogers, Joint Financial Services Manager |
|
Ward(s) Affected |
All Wards
|
|
Exempt |
No |
|
Corporate Priority |
Community Addressing Housing Need Resilience Environment Services |
|
Recommendations
|
Committee is asked to: Note the Capital expenditure forecast overspend of £1.157m for 2024-25 as at 30th September 2024. |
|
Reason for Recommendation |
Not applicable |
1. Summary of the report
|
What is the situation |
Why we want to do something |
|
• Spelthorne Borough Council is expected to overspend its Capital budget position by £1.157m |
• Ensuring the financial stability of the Council |
|
This is what we want to do about it |
These are the next steps |
|
• Monitoring & review the forecast variances by service and area of expenditure |
• Note the report |
1.1 This report seeks to summarise the financial situation of Spelthorne Borough Council at the end of September 2024. Please see the detail in Appendix A.
2. Key issues
2.1 The Capital Monitoring report covers the cumulative forecast expenditure to complete the project as at 30th September 2024, against the cumulative Council approved Capital Programme budget.
2.2 The Eclipse Leisure Centre was opened in October 2024. It has been a major multi-year capital project. As well as being a beautiful design with all the latest facilities, the new Leisure Centre is also extremely energy efficient. The financing of its costs is of major significance to the resilience of the Council’s financial situation, and further details are laid out for members in the separate Eclipse Leisure Centre Financing report.
2.3 Although the projects may have a budget allocation in the Capital Programme, any changes to the approved project or increases in forecast to complete the project, over and above the approved budget will require prior approval by Corporate Policy and Resources Committee before drawing down against that budget.
2.4 A summary of the main variances at 30th September is in Table 1 below:
Table 1 – Summary of Capital Variances to Budget
|
Committee |
Cumulative Spend to date £’000s |
Revised Budget
£’000s |
Managers Projected Outturn £’000s |
Projected Variance
£’000s |
COMMENTS |
|
Community, Welbeing and
Housing |
14,322 |
14,667 |
14,822 |
155 |
The DFG Overspend to be funded by the earmarked reserve - 'DFG management fees’ and is caused by increased demand and more complex cases. The Budget and Spent includes Property Acquisition for families (LAHF). |
|
Corporate Policy and Resources |
47,125 |
51,509 |
52,753 |
1,244 |
CP&RC capital program includes Assets and ICT. Assets £2.6m Overspend on Spelthorne Leisure Centre Development: c. £1m interest, c. £0.5m project management, c. £0.7k Sunbury LC mechanical & Electrical plant replacement costs c. £0.5k increased demo costs for the old Spelthorne LC. Partially offset by reconsideration of 31 Hanworth Road -£1m and other projects £0.4m. |
|
Environment and Sustainability |
804 |
2,568 |
2,326 |
(242) |
Underspend on carried forward Replacement of Refuse Vehicle and Wheelie Bin budget, County Transit Site project not expected to incur spending this year. |
|
Total |
62,251 |
68,744 |
69,901 |
1,157 |
|
3. Financial Implications
3.1 Once a project is completed, any underspend on the approved Capital Programme enables the Council to invest the monies to gain additional treasury management investment income or to fund additional schemes. Overspends as currently forecast result in greater exposure to higher interest rate costs.
4. Risk Considerations
4.1 Since the Council is no longer undertaking direct development of construction schemes, the main risk is now that of further movement in project costs on the Eclipse Leisure Centre project, which is the largest item in the Capital Programme.
5. Procurement considerations
5.1 Where necessary, actions will be implemented to effectively manage any procurements that are in progress.
6. Other considerations
6.1 There are no further considerations.
7. Equality and Diversity
7.1 There are no specific areas to highlight. However, equality, diversity and inclusion (EDI) are central to everything that Council does and are woven throughout Council’s Corporate Plans.
8. Sustainability/Climate Change Implications
With the Eclipse Leisure Centre we now have an operational leisure centre which meets the Passivhaus energy standards and is approximately 60 to 70% more energy efficient that conventional leisure centres. This will make a significant reduction in our carbon footprint.
9. Timetable for implementation
9.1 The timetable for the Capital Programme budget is as per the Programme approved by Council 22nd February 2024
10. Contact
10.1 Mahmud Rogers m.rogers@spelthorne.gov.uk
Background papers: The Capital Programme approved by Council 22nd February 2025
Appendices:
Appendix A – Detailed Capital Monitoring Report by Committee as at 30 September 2024.
Background Papers
Council 6 February 2024, Agenda item 11 – Transformation Business Cases
Cabinet 26 May 2021, Agenda item 3 – Principles of Collaboration with Other Local Authorities