BRIEFING PAPER: CAPITAL INVESTMENT
RESOURCES & PERFORMANCE (Corporate Services)
What are the capital priorities for the service? How has the corporate priority for low carbon/sustainability influenced the capital programme?
· Major scheme related to the relocation of Central Resources Library and Education Support Centre remains on hold pending the identification of the preferred bidder in connection with the procurement of the residual waste treatment facility.
· A much reduced Minor Capital Works programme is now being implemented in accordance with the agreed service property priorities reflecting the decision taken in 2008/9 to move to life cycle condition assessment and improved data on energy consumption arising from automated meter reading.
What is the reliance on capital receipts and grants within investment business cases? How are the inherent risks being addressed?
· The revised capital programme reflects a shift in reliance from borrowing to maximising the use of capital grant. The size of the award of capital grant much reduces the risk and reduces the reliance on borrowing and therefore the costs of capital financing are also reduced.
Is the programme achievable on budget and time? What are the risks of cost overrun or slippage?
· The overall capital programme was reviewed in July 2010 to minimise risk to delivery. Subsequent review in November / December has resulted in a smaller programme carrying lower risk. All schemes are supported by business cases.
Is there a backlog of maintenance and if so how is this being managed?
· Maintenance regimes for all mechanical and electric plant are closely monitored. There is a potential risk of an increasing demand on reactive maintenance services and a long term risk over 5 to 10 years of reduced life cycle. These risks are being managed through a move to condition and service based maintenance. Capital investment programmes are at no greater risk
· In the scope of the Resources and Performance portfolio the significant issue on backlog maintenance is the county hall site. The budget proposals include provisions to address current known problems.
COMMUNITY PROTECTION (Fire & Rescue, and Trading Standards)
What are the capital priorities for the service? How has the corporate priority for low carbon/sustainability influenced the programme?
What is the reliance on capital receipts and grants within investment business cases? How are the inherent risks being addressed?
Is the programme achievable on budget and time? What are the risks of cost overrun or slippage?
Is there a backlog of maintenance and if so how is this being managed?
Fire & Rescue
The capital priorities for HFRS are to enhance water rescue capability, replace essential operational uniform and equipment (including breathing apparatus and road traffic collision equipment) and maintain/ replace building stock. The current programme will be difficult to achieve with the intended 50% reduction to the minor capital works budget (previously annual provisions). Although a relatively small amount (£125k), this budget is carefully prioritised in terms of upgrading and replacing ICT equipment at the Command and Control Centre, and vital life saving equipment such as Thermal Imaging Camera’s and cutting equipment for use at Road Traffic Collisions. Reducing the HFRS budget by £125,000 would lead to a reduction in both the quantity and quality of equipment replaced and would be detrimental in terms of:
· public safety – effective and efficient speed of response with the right equipment
· firefighter safety – equipment and systems that support safe systems of work
· environmental protection – ensuring that environmental damage is minimised
In terms of property, Stevenage Fire Station is the most pressing concern and will become a real issue in 2013. £250k has been allocated to survey and develop plans for a new fire station in Stevenage, and the estimated cost of the new fire station is £5million. Much Hadham retained station is also in a poor state of repair and a lack of investment is likely to lead to further deteriation. There is a backlog of maintenance at many service locations and this is being managed by Property Department prioritising work, and the use of the Services handypersons.
Community Safety Unit
The CSU capital budget is part of the Area Based Grant allocation and is therefore potentially at risk. The capital pays for equipment for the Home Safety Service (approx £30k).
Trading Standards
The capital budget is traditionally very low (£25k) and has been reduced to £13k from 2010/11 (current financial year) onwards. This budget maintains the replacement of animal health vehicles and essential TS equipment (weighing machines and Information Technology) for service delivery. Planned vehicle replacement takes low carbon / sustainability issues into account. The capital programme is achievable within budget and time. Property costs have previously been high in comparison to other Services, hence the move of offices which released savings in excess of £200k.
Emergency Planning
There are no capital projects for resilience.
CHILDREN, SCHOOLS & FAMILIES: EDUCATION & EARLY INTERVENTION
What are the capital priorities for the service? How has the corporate priority for low carbon/sustainability influenced the capital programme?
The service has four capital programme priorities:
Delivery of the three BSF schools in Stevenage where funding has been agreed by Government (Capital value £72m)
Delivery of the Francis Coombe and Bushey Hall Academies rebuilding projects
Securing the delivery of a school expansions programme to secure adequate provision of primary school places by September 2012, to meet rising demand, and additional secondary school places thereafter
Securing the delivery of and enhanced level of repairs and maintenance for schools at the same time as managing the withdrawal of HCC from funding and delivering such a programme
The service is seeking progressively to increase its role as an enabler of provision rather than a direct provider, for example through the promotion of Free Schools as a means of providing wholly new schools.
The Stevenage BSF schools will include major photovoltaic installations at no cost to HCC, generating income via the Feed In Tariff regime (FITS). The service is seeking to develop a model of FIOTS-funded investment to roll out across the schools estate with no direct cost to HCC.
What is the reliance on capital receipts and grants within investment business cases? How are the inherent risks being addressed?
The service is seeking to move towards a position where all capital costs are met by external funding. This is largely the case already, but a major priority is to seek to fund the costs of the primary expansion programme largely or completely from external sources.
Is the programme achievable on budget and time? What are the risks of cost overrun or slippage?
Plans and contracts are in place or due to be signed which should deliver the largest programmes (BSF and Academies) on time, on budget. Further work is required to make sure that the ambitious programme of primary school expansion can be delivered to a very tight timescale. New arrangements for Business Case sign-off should ensure that there is much less scope than in the past for cost and programme over-runs.
Is there a backlog of maintenance and if so how is this being managed?
Yes. The new arrangements being developed with schools are intended to improve the efficiency of use of resources, and to encourage the use of more Devolved Formula Capital for maintenance purposes. However, the level of DFC available over the next 4 years will be substantially determined by the outcome of the James Review into the schools capital programme. Responsibility for the planning and management of their buildings is being placed more clearly with schools, but the reprocurement of the current Property Partnership arrangements are intended to provide a set of framework suppliers which schools can use to support them in discharging these responsibilities.
CHILDREN, SCHOOLS & FAMILIES: CHILDREN’S SAFEGUARDING & SPECIALIST SERVICES
What are the capital priorities for the service? How has the corporate priority for low carbon/sustainability influenced the capital programme?
What is the reliance on capital receipts and grants within investment business cases? How are the inherent risks being addressed?
Is the programme achievable on budget and time? What are the risks of cost overrun or slippage?
Is there a backlog of maintenance and if so how is this being managed?
The service has no new Capital schemes to be considered for the 2011/12 to 2014/15 Capital Programme.
HEALTH & COMMUNITY SERVICES (including Adult Care Services & Libraries)
What are the capital priorities for the service? How has the corporate priority for low carbon/sustainability influenced the programme?
Adult Care Services has a modest capital programme. In recent years, all re-provisions of supported living and respite units have been achieved through self-financing schemes in partnership with housing associations. They have won capital grants available to housing providers and have paid this back through increased rent and service charges funded by housing benefit. Two such schemes are within the current HCC capital programme (Manor House, Little Bushey Lane and Scarborough House) in case a land swap is required to allow the build to take place before moving the tenants across and disposing of the old site.
The Day Service Modernisation Programme has been in existence for four years and is self-financing from the £4.7M capital receipt it generated through the disposal of the Balmoral Day Centre in Watford. Phase 1 is now completed and Phase 2A and Phases 2B are progressing now.
The relocation of the Central Library Service is a corporate capital project. A central location in the county is essential to maintain the present good carbon footprint of this service. The service carries considerable risk linked to the time management of the relocation liked to the planned move from the New Barnfield site.
What is the reliance on capital receipts and grants within investment business cases? How are the inherent risks being addressed?
Other than the existing Day Service Modernisation (DSM) Programme which is in its final phases – no reliance is being placed on capital receipts.
Is the programme achievable on budget and time? What are the risks of cost overrun or slippage?
There has been some slippage of capital due to reduction in land values and inability to agree on land disposals within original timescales for DSM. Phase 1 projects are now completed with contracts signed. Phase 2A and 2B projects are now proceeding.
Is there a backlog of maintenance and if so how is this being managed?
The 2010/11 annual provisions budget of £168,000 for the portfolio of 47 libraries was not sufficient to deal with the significant backlog of repairs and may lead to service disruption, as has already been experienced at several libraries during the recent severe weather.
ENVIRONMENT & COMMERCIAL SERVICES: WASTE MANAGEMENT, ENVIRONMENT & PLANNING AND STRATEGY, COMMUNICATIONS, & ECONOMIC DEVELOPMENT
What are the capital priorities for the service? How has the corporate priority for low carbon/sustainability influenced the capital programme?
What is the reliance on capital receipts and grants within investment business cases? How are the inherent risks being addressed?
Is the programme achievable on budget and time? What are the risks of cost overrun or slippage?
Is there a backlog of maintenance and if so how is this being managed?
The Waste Management and Rights of Way services reply upon capital budgets to make major improvements. In addition, the waste procurement programme has successfully secured from central Government PFI credits to help fund new long term waste treatments facilities.
Waste management priorities are set out in the annual service property strategy which ranks the existing portfolio according to condition, suitability, capacity etc. and discusses future new requirements. Priorities for the service include:-
A replacement for the Cole Green HWRC.
A replacement for the Letchworth HWRC combined with waste transfer.
A waste transfer facility in east Hertfordshire.
Rights of Way capital priorities include improved surfacing and the upgrading of major items such as bridges and drainage schemes. Additionally, LTP capital funds via the Rights of Way Improvement Plan have been used in the recent past to improve specific parts of the network above the statutory minimum to make access available to more people, including those with mobility difficulties. At its meeting on 4th January, the Environment & Planning Cabinet Panel requested that an additional £50,000 capital be provided for the management of the Rights of Way network, in order to ensure the delivery of the proposed 25% saving from the revenue budget could be achieved. This would need to be found from within the overall capital budget allocated for Integrated Transport and will be considered by the Director before drawing up the draft Integrated Works Programme for 2011/12.
The achievability of the basic Rights of Way programme is straightforward: there is estimated to be a backlog of work amounting to about £2m, and each year, funds are directed at safety schemes and structural repairs on an asset management basis. The LTP-funded programme is based upon a series of area plans, each including a cluster of settlements, with improvements identified in the Rights of Way Improvement Plan in consultation with local communities.
The waste management capital programme is a rolling one over 3 year periods and is, for the most part, dependent upon the availability of land and associated planning and permitting regimes. For this reason, monies are sometimes carried over to future years. The timing of the capital programme associated with waste procurement will become clearer in late 2010/early 2011 when the location of the treatment facility is settled.
Small scale improvements to the HWRC network e.g. purchase of compactors, the rural estate e.g. replacement agricultural storage and recreation sites e.g. car-park resurfacing are funded by annual provisions in the capital programme.
ENVIRONMENT & COMMERCIAL SERVICES: HIGHWAYS & TRANSPORT
What are the capital priorities for the service? How has the corporate priority for low carbon/sustainability influenced the programme? What is the reliance on capital receipts and grants within investment business cases? How are the inherent risks being addressed? Is the programme achievable on budget and time? What are the risks of cost overrun or slippage? Is there a backlog of maintenance and if so how is this being managed?