Agenda item

Consider report by Director, Finance and Corporate Governance. (Copy attached.)

            There had been circulated copies of a report by the Director, Finance and Corporate Governance which provided a statement comparing the final capital outturn for 2021/22 with the final budget for the year and identified the main reasons for any significant variations.  The final capital outturn statement for 2021/22 was included at Appendix 1 to the report and included the reasons identified by the Project Managers and Budget Holders for the variances to the final approved budget. This identified an outturn expenditure of £59.634m which was £7.134m below the final revised budget of £66.766m including timing movement in the final quarter of £7.474m.  A number of macro-economic factors affected the Capital Plan during 2021/22. Construction materials supply chain had been subject to unprecedented disruption in recent months. A surge in demand coupled with constraints on supply had led to price increases, shortages and longer lead times. Any financial implications from those market conditions were reported within the final outturn report with the final financial position for 2021/22. The outturn position provided the basis to inform the Capital Plan requirements in 2022/23, with any longer term impacts reflected in the financial planning process for future years.  In recognition of the market conditions experienced in 2021/22 and continuing into 2022/23, the approach to slippage of block allocations within the Capital Plan had been reconsidered. From the 2021/22 outturn, the elements of projects which were legally committed would transfer budget into the next financial year to fund those commitments. All other underspend in block allocations would be carried forward on a pooled basis to benefit the wider Capital Plan. This carry forward from 2021/22 into 2022/23 of £1.253m would be used to establish an inflation contingency in light of the market condition concerns highlighted in the report. In response to a question regarding the potential for any further increases to the costs related to the repair of the Union Chain Bridge, the Director, Infrastructure and Environment, Mr John Curry, explained that work was ongoing with the project partners to manage and mitigate risks, but that material costs continued to increase. Regarding electric vehicles, the Director explained that work was ongoing with fleet management regarding the servicing of the vehicles, and that work was required to assess the impact of disposal costs of the car batteries once they had reached the end of their usage. The Director added that the management and disposal of the batteries would be part of the revenue budget rather than capital.

DECISION

(a)       AGREED:-

(i)        the final outturn statement in Appendix 1 to the report;

(ii)     the allocation of the remaining budget of £0.660m from Emergency & Unplanned to Union Chain Bridge as reflected in Appendix 1 to the report; and

(iii)      the block allocations detailed in Appendix 3 of the report.

(b)    NOTED:-

(i)        the adjustments to funding in Appendix 1 to the report;

(ii)       the final block allocations in Appendix 2 to the report

(iii)      the whole project costs detailed in Appendix 4 to the report.