Agenda item

Purpose: The capital financing performance report provided to Members reports on the under or over spends against the Council’s approved capital programme and associated capital financing implications.  This report presents the provisional outturn position for financial year 2023/24 as forecast at quarter one, and future borrowing requirement for financial year 2024/25 which is funded from the Council’s revenue budget.

Joseph Holmes (Executive Director – Resources) presented the Capital Financing Report for Financial Year 2023/24 Quarter One (Agenda Item 8).

The following points were raised in the debate:

·       Members asked how the Council’s borrowing to income ratio compared to those of other local authorities.

·       It was noted that the Officer for Local Government (Oflog) had this information on its website. West Berkshire was towards the top of the fourth quartile or bottom of the third quartile. Some of the local authorities towards the top of the list were those who had featured in the news in recent weeks.

·       Clarification was sought as to why the Council was ‘overborrowed’.

·       Officers indicated that the Council had not undertaken borrowing in the last four years apart for the Community Bond. This was because a number of schemes had been delayed. Also, during Covid, the Council had a strong cash balance, which prevented the need to borrow. Delaying long-term borrowing was beneficial, since current interest rates were higher than they had been recently.

·       A question was asked about the extent to which borrowing costs were exposed to shocks in the financial system.

·       It was confirmed that borrowing rates were fixed at low interest rates. The Council did undertake some short-term borrowing for cash flow purposes. In the longer term, interest rates were forecast to fall and the Council did not want to be tied into higher rates in the long-term. It was noted that some local authorities were overexposed to higher short-term rates.

·       It was noted that no reprofiling had been requested. Members asked if there was a cut-off date for requests in order not to lose the funding.

·       It was explained that the Council had moved to a 10 year capital strategy, which offered additional flexibility for the capital programme. Requests for reprofiling had to be made before year end. Requests were approved through the Executive and would come through the Scrutiny Commission.

·       Members asked about the London Road Industrial Estate (LRIE) scheme.

·       Officers indicated that some funding had been received for the LRIE scheme from the Local Enterprise Partnership and this would be used before the Council’s own funds. Securing external grants was a common reason for reprofiling spend.

·       A question was asked about why funds had been reprofiled for Brookfields School and whether this would have an impact on SEND children.

·       It was confirmed that the school was in a more positive position with respect to its own capital reserves, so there had been a discussion about who was going to pay for what elements. As a result, the Council’s spend had been pushed back.

·       Members noted that the SEND Strategy Infrastructure Delivery had been pushed back and asked why.

·       Officers indicated that options were being considered for this, including delivering better value through the government. However, the Council was committed to spend in this area.

·       Concern was expressed about deferring IT spend, and Members sought reassurance around security patching and ongoing support.

·       Officers confirmed that there support would be provided. It was highlighted that there had been significant investment in IT. In some cases, underspends were because projects had come in under-budget. It was stressed that IT security risks were near the top of the corporate risk register and the Executive Portfolio Holder for Finance and Corporate Services had regular briefings from the Acting Head of IT. Reassurance was provided that the Council would not jeopardise IT security by postponing capital spend.

·       It was noted that the spend on Theale Railway Station had been reprofiled, however, work at the station was progressing well and the scheme was forecast to be completed by the winter. Officers were asked to double check the need for funds to be reprofiled.

Action: Joseph Holmes to confirm Theale Station project timeline with Councillor Ross Mackinnon.

·       A question was asked about what resources were required to deliver the project listed in paragraph 7.1 of the report.

·       Officers indicated that this related to project resource – officers were currently acting up or had been promoted, leaving gaps. The Council was seeking to recruit to the vacant project posts.

RESOLVED to note the report.