112.1 Principles
- Funding will only be allocated when schemes have been subject to the Asset Management Plan process, including a full financial appraisal.
Releasing Funding
112.2 Borrowing
The move to a single capital pot allows the Council to utilise supported borrowing on any scheme or schemes it wishes. However as is evident from the breakdown provided by Central Government, the supported borrowing has been based on the needs assessed jointly by the Government and the Council.
The Council is phasing in a mechanism for prioritising capital bids, over a five year period to 2008/9. This will include a full appraisal process in order to potentially allocate some/all supported borrowing, in line with local rather than central priorities.
The Prudential Code allows Local Authorities to enter into unsupported borrowing providing that it is affordable, prudent and sustainable. The Section 151 Officer is responsible for setting the Prudential Indicators. Council must approve the Prudential Indicators as part of the budget setting process.
Under this new arrangement schemes will need to meet agreed criteria including:
- Robust business case
- They do not compromise the Prudential Indicators approved by Council
- Schemes are subject to meeting a series of Financial Health Checks
- There is no net cost to the Council Taxpayer/Housing tenant
- Any unplanned net cost of the scheme will be a first call on the sponsoring service budget
- Schemes must satisfy the Head of Resources requirements as the Section 151 Officer is responsible for the Management and Reporting of Prudential Indicators approved by Cabinet
- Ongoing impact upon the Medium Term Financial Plan.
This Framework also allows services to retain 25% of receipts for re-investment. Thus the borrowing approvals can be supplemented by any actual receipts, as envisaged by the Government in their borrowing approvals scheme.
112.3 Corporate Resources
- Revenue budget provision must be made to maintain the value and suitability for purpose of an asset once any backlog has been cleared;
- Services repay non-specific capital resources over the life of the asset.
112.4 Specific Resources
- Where the appropriate processes have been completed regarding grant bids, business cases and/or feasibility studies, any resources that are scheme specific will be automatically used to give approval for the scheme to be included in the Capital Programme.
112.5 Capital Programme
- The Prudential Code requires the development of a 3-Year Capital Programme.
- Each capital proposal should be supported by a robust business case.
- Capital funding is allocated by Cabinet, in consultation with the Scrutiny and Review Panels, following evaluation of schemes by the Asset Management Group.
- Capital proposals should be endorsed by the Head of Resources and submitted to the Asset Management Group for review and evaluation.
112.6 Procedure
- There is a two-stage procedure for evaluating capital funding bids.
- Stage 1 considers the justification for a scheme; its links with the Council’s priorities and ensures that the proposed scheme is in accordance with its strategic and Service Plans.
- Stage 2 looks at the financial implications for the Council if it proceeds with the scheme.
- Requests for feasibility funding, allocated by the Asset Management Group, need only complete stage 1, but stage 2 must accompany requests for funding for detailed design/implementation of the proposed scheme.
- At stage 1 a capital programme application will need to be completed. Click here for the Capital Programme Application Form.
- Once completed, the form should be endorsed by the Head of Resources and submitted to the Asset Management Group for review and evaluation.
- This evaluation will include allocating a score for each proposal considered.
- Capital proposals will be compiled into two lists:
- The first will show schemes where funding has already been identified or previously approved by the Council.
- The second list will detail part or un-funded schemes and will be ranked in order of the scores allocated under the evaluation procedure.
- Decisions regarding the 3-Year Capital Programme will then be made by Cabinet:
- Endorsing the inclusion of the funded schemes within the 3-Year Capital Programme.
- Rank the remaining part or un-funded schemes in priority order and allocate available capital funding.
- Members will be able to change the ranking of any scheme.
- The Capital Programme will be subject to periodic review.
112.7 Document
The Council’s Capital Strategy for the current year forms part of an integrated Asset Management Plan. Click here to view the Capital Strategy & Corporate Asset Management Plan.
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