Agenda item

Capital Budget Monitoring - Round 2 2022/23

This report presents the results of the second round of the Council’s capital budget monitoring process for 2022/23.




The Committee considered a report presenting the results of the second round of the Council’s capital budget monitoring process for 2022/23.

The following issues were discussed:


·            Withdrawal of Section 106 developer contributions – Clarification was sought on the process and it was advised that, to limit the risk to the Council, the commencement of schemes was generally only approved once Section 106 contributions had been received. The exception to this was education schemes where the Council has a statutory requirement to deliver places but there would be transparency about any changes to the funding arrangements.


·            In terms of planning, where the developer subsequently sought to reduce their S106 financial contribution, clarification of the implications for the planning consent would be sought from the Head of Planning.


·            Decision making process for the Members’ priorities fund – Officers would provide a briefing note.


·            Capital funding for schools – Clarification was sought on the source of funding; how much was covered by the basic needs grant and how much was borrowing. Officers advised that in recent years there had not been a basic needs grant and so there had been a reliance on Section 106 contributions. In some cases, there had been borrowing in lieu of those contributions. A £17million basic needs grant had been received this year as a one-off grant in recognition of the need to provide extra school places.


·            Proposed Cornwallis School – Asked for details of the funding, officers explained that the Council’s contribution would be in the region of £500,000 with most of the funding being provided by the Department for Education.


·            Aut Even property – Asked for an update on the use of the building, officers undertook to consult with colleagues in Children and Adults Services and provide an update.


·            Maintenance of the English coastal path now that it was completed – Officers would seek clarification and respond outside of the meeting.


·            HIF programme funding – In response to a range of issues raised, the Chief Finance Officer said that the HIF grant was based on a bid which contained certain specific aspirations. Any alterations would require the agreement of Homes England and any slippage of the timetable would be reported to Cabinet.


·            Innovation Park Medway (IPM) – Clarification was sought on whether the anticipated levelling up funding would be sufficient to cover the proposed building at IPM. The Chief Finance Officer said that, like all schemes, it was backed by a viability assessment and consideration would need to be given to what was deliverable should the level of funding be less than anticipated. Any changes would go through the usual governance process.


·            Medway Development Company (MDC) – With regard to the withdrawal of Section 106 contributions, the Chief Finance Officer said that close communications were maintained with MDC and they were committed to push forward with schemes in Medway that would not otherwise happen. Any reduction in schemes would be subject to the formal governance process. Regular conversations were held with MDC to ensure that business cases were robust.


·            In response to a question on the loan to MDC, the Chief Finance Officer explained that this was not a large up-front loan but a series of cash flow loans. There were no concerns regarding MDC’s ability to meet their liabilities to the Council.


·            Regeneration underspend – It was asked why the £24,000 underspend did not include Splashes redevelopment scheme. Officers explained that this was a timing issue, and it would be included in the Round 3 revenue monitoring report.




The Committee noted the results of the second round of capital budget monitoring for 2022/23, and the management actions to resolve the projected overspend in Children’s and Adults which would be the subject of a future report to both Cabinet and Council.

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