Agenda item

Purpose: To outline the Capital Strategy covering financial years 2024/25 -2033/34 and the supporting funding framework, providing a high-level overview of how capital expenditure, capital financing and treasury management activity contribute to the provision of local public services along with an overview of how associated risk is managed and the implications for future financial sustainability.

Decisions made on capital and treasury management have financial consequences for the Council for many years into the future. Decisions are therefore subject to both a national regulatory framework and to local policy framework.

Councillor Iain Cottingham (Executive Portfolio Holder: Finance and Corporate Services) and Joseph Holmes (Executive Director – Resources) presented the Capital Strategy (Agenda Item 5).

The following points were raised in the debate:

·       Queries were raised in relation to Appendix C. It was confirmed that this set out the minimum revenue provision policy. This showed that the Council had historically set aside significant capital financing costs through the revenue budget for minimum revenue provision (MRP). Following an external review, the Council was looking to move in line with other local authorities’ MRP repayments. It was proposed to significantly reduce payments and move to a lower weighted average annuity basis. This delivered a saving in the short-term but created a higher pressure in the long-term. This was a technical accounting adjustment recommended by the external review. Repayments would be made at a future date when the value of the debt was much lower.

·       Members highlighted issues with readability due to the small font size used in tables.

·       Members welcomed the pie chart in section 4.2, which showed how spend was linked to the Council Strategy priorities, but it was suggested that this chart should include percentages.

Actions: Joseph Holmes to review the font size used in tables and to include percentages in the chart in 4.2.

·       Proposals for capital strategy investment in 5.3 were highlighted and Members queried why there was nil spend for CIL/S106. It was explained that there were restrictions around what this could be used for, so it was allocated to general fund items (e.g., Education, Highways, etc) rather than Capital Investment or Invest to Save.

·       Members queried comments about investments in the Vodafone Radio Access Network. It was confirmed that the Council was looking to work with Vodafone rather than invest in their network. Other local authorities had used technology to monitor adult social care users in their homes to help detect problems as they occurred, but connectivity was a challenge in rural areas. West Berkshire was exploring potential trials with Vodafone, which could help to transform the service and reduce unit costs in the longer-term.

·       It was noted that the report still referred to London Road Industrial Estate rather than Bond Riverside.

Action: Joseph Holmes to update LRIE references to Bond Riverside.

·       Members queried whether Bloomfield Hatch Solar Farm was mentioned in the report. This was listed under Renewable Energy Provision (Project No. 127).

·       A question was asked about the Council’s debt to capital investment ratio compared to those of other local authorities. Officers did not know.

·       It was noted that 6.7% of revenue was spent on debt finance and Members asked how that figure compared to other local authorities. It was confirmed that this information was available via Oflog. Only around 10 upper tier local authorities had a higher debt servicing cost to core spending ratio, including some that had substantial debt financing (e.g., Warrington). There would need to be a good business case for taking on further debt. Money could not be borrowed to increase reserves – it had to be for a capital project. An announcement was awaited from government around the flexible use of capital receipts to alleviate short-term pressures.

RESOLVED to note the report.