Decision details

RESOLVED:

That the Cabinet recommend to Full Council that the Capital Strategy 2024/25 be approved, including the adoption of the MRP statement.

KEY DECISION:

No

PORTFOLIO:

Finance & Corporate

ALTERNATIVE OPTIONS CONSIDERED/REJECTED:

As set out in the report.

DECLARATIONS OF INTEREST:

None.

DISCUSSION:

The Portfolio Holder for Finance and Corporate introduced the Capital Strategy 2024/25 report. The report detailed the proposals for the strategy and outlined how the strategy would be delivered and funded.

The Strategic Director Corporate Resources and Transformation / S151 Officer explained that the report brings together the General Fund programme, and HRA programme and confirms the overall programme financing, and relationship that financing has with the projected cash balances, and cost of financing to both the general fund and HRA.

It was explained that the Council had a fairly large programme, with around £128 million forecast to be spent over the next 3 years.

Up to the current year, the Council had supported the financing of the capital programme through internal cash balances, a process known as internal borrowing, and had been repaying this internal borrowing through a charge through the revenue accounts known as Minimum Revenue Provision. The report also outlined the continuation of the MRP statement and approach into 2024/25, which is required under CIPFFA rules.

External borrowing was required to finance the programme. This was always anticipated when the Council adopted its commercial and residential strategies, and the 2018 housing delivery strategy, with an expectation of spending of over £100m by 2026, with around 50% to be financed through external borrowing.

It was heard that the current and forecast levels of debt fall well within the debt boundaries as set in the report, and the financing costs remain affordable over the medium term.

A non-executive member questioned whether the £1.8m Government grant would reduce the CFR figure. The Strategic Director Corporate Resources and Transformation / S151 Officer explained that the grant will reduce the CFR figure however this was a high-level strategy with £128m expenditure over three years and although the £1.8m grant was a substantial figure, it was minor in the context of the entire strategy’s funding.