Meeting:	Executive
Meeting date:	25 January 2024
Report of:	Debbie Mitchell, Chief Finance Officer
Portfolio of:	Councillor Katie Lomas, Executive Member for Finance, Performance, Major Projects, Human Rights, Equality & Inclusion

Decision Report: Capital Budget 2024/25 to 2028/29

Subject of Report

1.           This report sets out the capital programme for 2024/25 to 2028/29, and in particular sets out proposals to continue the Council’s approach to prioritise investment in the economy, housing, transport and to invest to save including energy efficiency.

 

Benefits and Challenges

2.           Schemes funded by borrowing have an associated revenue impact. In order to minimise the additional growth required in future years, and mindful of the Council’s current financial position in light of both the ongoing pressures in social care and the current economic uncertainty, it is proposed that any new borrowing is minimised as much as possible by reprioritising elements of the existing approved programme.

 

3.           The costs of supporting the capital programme have increased over the years as the Bank of England increased base rates from 0.25% in February 2022 to 5.25% in August 2023 and ongoing. This has resulted in increases to the cost of borrowing. Given the challenges outlined in the Financial Strategy report elsewhere in the agenda, only essential new investment is recommended at this time.

 

 

4.           The council has been successful in identifying external funding for much of its schemes. The 5 year capital programme currently stands at £458m (as reported in Monitor 3) of which £190m (42%) is funded from external grants, £156m (34%) from general fund borrowing and £112m (24%) from HRA funding. There are further opportunities in the creation of the York and North Yorkshire Mayoral Combined Authority to further increase external funding for investment in the city and seeking external funding is key in delivering investment in the city.

 

5.           The Prudential Code requires Local Authorities to only undertake borrowing that is affordable within available resources. This report therefore needs to considered in line with the other budget papers on this Agenda.

 

Policy Basis for Decisions

6.           The capital programme budget covers the period 2024/25 to 2028/29 and sets out revised investment in the capital programme over the next 5 years.

 

7.           The level of capital investment and levels of borrowing are a key element of the overall finances of the council and key part of the Medium Term Financial Plan.

 

Financial Strategy Implications

8.           This report outlines the five year programme for capital investment and needs to be considered alongside the other key financial reports on the agenda. The report recommends an increase in the council’s borrowing of £28m (primarily in 2028/29).

 

Recommendations and Reasons

9.   The Executive is requested to recommend that Council:

 

·               Agree to the revised capital programme of £395.186m that reflects a net overall increase of £56.409m (as set out in table 2 and in Annex A). Key elements of this include:

i.          New schemes funded by prudential borrowing totalling £3.353m as set out in table 3;

ii.         Extension of prudential borrowing funded Rolling Programme schemes totalling £25.025m as set out in table 4;

iii.       Extension of externally funded Rolling Programme schemes totalling £6.030m as set out in table 5;

iv.       New schemes funded by external grants totalling £3.844m as set out in table 5;

v.        An increase in HRA funded schemes totalling £18.157m funded from a combination HRA balances/capital receipts as set out in table 6;

·               Note the total increase in Council borrowing as a result of new schemes being recommended for approval is £28.378m the details of which are considered within this report and the financial strategy report.

·               Approve the full restated programme as summarised in Annex B totalling £395.186m covering financial years 2024/25 to 2028/29 as set out in table 12 and Annex B

Background

	23/24 £m	24/25 £m	25/26 £m	26/27 £m	27/28 £m	Total £m
Gross Capital Programme	119.723	177.571	76.890	47.933	36.383	458.500
Funded by:
External Funding	56.431	66.995	41.170	18.868	6.495	189.959
Council Controlled     Resources	63.292	110.576	35.720	29.065	29.888	268.541
Total Funding	119.723	177.571	76.890	47.933	36.383	458.500

10.        The current 2023/24 – 2027/28 capital programme was approved by Council on 23 February 2023. Since then, a number of amendments have taken place as reported to the Executive up to and including the 2023/24 Capital Monitor 3 report also on this agenda. The changes made as a result of the above reports have resulted in a current approved capital programme for 2023/24 – 2027/28 of £458.500m, financed by £189.959m of external funding and Council controlled resources of £268.541m. Table 1 illustrates the current approved capital programme profile from 2023/24 – 2027/28 as of capital monitor 3 2023/24.

 

11.        The majority of external funding is comprised of Government Grants, including those from the Department for Transport and Department for Education and Skills. Council controlled resources comprise of Housing Revenue Account (HRA) funds, prudential borrowing and capital receipts.

 

Options

12.        This report sets out the new capital investment proposals for the 5 year period covering 2024/25 to 2028/29. Members can choose to approve or reject the recommendations made to Council as a result of the amendments contained in this report. It should be noted that it is a statutory requirement for the council to set a capital budget for the forthcoming year per Local Government Act 2003 (revised).

 

Summary of Proposed Capital Investment

13.        The capital budget process invited proposals from the departments asking to submit requests for the Councils main capital priorities. Of the 22 proposals going forward 16 are asking for direct council funding, this is comprised of 14 proposals for extensions to existing schemes and 2 proposals for new schemes.

 

14.        In total, proposals have been made that would increase the existing 2024/25 – 2028/29 Capital Programme by £56.409m. The proposals are comprised as follows:

·               General Fund schemes requiring financing by Council borrowing £28.378m

·               General Fund Schemes and HRA Schemes financed by external funds £9.874m

·               Housing Revenue Account schemes financed by HRA funds £18.157m

 

Key Scheme proposals

15.        The table below summarises the key proposals that result in an increase to the capital programme of £53.808m split by type. Further details of the individual schemes can be found later in the report at the following references:

 

 

Table 2 – Summary of New Proposals and Increase in Capital Programme

 

16.        Overall, this report proposes new capital schemes totalling £56.409m which result in a net increase to the Capital Programme of the same amount. Details of all schemes within the proposed capital programme can be seen in Annex B.

 

 

Detailed Consideration of Proposed Investment

New Schemes – Prudential Borrowing

17.        As part of this year’s capital budget process a number of proposals have been received that require discretionary prudential borrowing. These are set out in table 3 below.

 

Scheme Type / Description	Total Value	Financial Year
	£m
Mansion House Urgent Repairs	1.273	2024/25
Castle Mills Lock	0.300	2025/26
Askham Bar EV Charging (Levi Match Funding)	0.800	2024/25 -25/26
West Offices Data Centre	0.380	2024/25
Garden Bin Replacement	0.600	2024/25 to 2027/28
New Proposals Requiring Prudential Borrowing	3.353

Table 3 – Summary of New Proposals Requiring Prudential Borrowing Funding

18.        An overview of each new scheme being proposed is set out in the following paragraphs.

 

19.        Mansion House Urgent Repairs (£1,273k in 2024/25) - As the council are the custodians of the Mansion House on behalf of the residents, the proposed scheme of works ensures the council meets its statutory and legal obligations it has towards the Mansion House as well as fulfilling the grant conditions of the National Heritage Lottery Fund (NHLF) investment. The scheme also implements the conservation management plan (CMP) and issues identified as part of the fabric condition survey (FCS) carried out in March 2023.  The outcome of the scheme will ensure the grade 1 listed building is maintained to industry standards, continues to be publicly accessible, income generating, whilst ensuring it remains the symbol of civic pride in York. The scheme will consist of the following key areas:

·               Repair the vaulting in the passageway under the Mansion House leading to the Guildhall;

·               Install a new fire rated passenger lift;

·               External restoration and repair of the windows and exterior façade;

·               Internal restoration including the failing plaster work in the main hall staircase and drawing room;

·               Re-roof and address the rot in the roof structure of the slated areas;

·               Address issues with the hot water system;

·               Compliance with Health and safety and equality legislation.

 

20.        The CMP/FCS sets out detailed and specific time scales for key works to be undertaken with other works being reactive to the developing condition of the building. Even if this CRAM bid is successful the planned scheme the works (as per the CMP and emerging conditional needs) will not be commenced until late 2024/2025, which means the building will undergo another winter (maybe two) of further degradation in those areas.   Failure to act now will not only result in further damage to the building heritage but also likely increase costs and scope of the restoration works required.

 

21.        Castle Mills Lock (£300k in 2025/26) - When our canals and rivers were built there was no standard template for lock gates. They were constructed using a variety of techniques and designed to navigate the local landscapes. As a result, our lock gates are bespoke so when we’re building new lock gates, each one hasto be sized up and built to the exact specifications for each lock. An average lock gate lasts for about 25 years. Castle Mills Lock were last renewed in 1986 making them 35 years old and 10 years exceedance of their expected serviceable life. Further to the work on the lock gates, work is also needed to the access bridge to the site which is nearing the end of its serviceable life.

 

22.        Additional funding is required to deliver the scheme as a direct result of increases in the cost of materials, labour, design, and project management fees. This is over and above the original budget of £800k which has been approved. The additional funding required is in the region of £300k.

 

23.        Askham Bar EV Charging (£400k in 2024/25 and £400k in 2025/26 Total £800k) - Askham Bar Hyper Hub will provide Ultra-rapid, Rapid and Standard EV charging infrastructure at Askham Bar Park and Ride, servicing the southern side of the city. The facility will be accessible to all users of electric vehicles under 3.5 tonnes, driving the uptake of EVs which in turn supports the council's climate change objectives by reducing carbon emissions and improving air quality. The Hyper Hub will include 4 x 175kW chargers, 4 x 50 kW chargers and 56 x 7kW charge points. Solar PV panels, mounted on canopies over the chargers, provide up to 100kW renewable electricity, which can be used directly to charge vehicles, or stored in a 500kW battery for later use.

 

24.        The council has been awarded a grant of £1,243k which Executive approved in principle in July 2023 “LEVI Pilot Funding for Askham Bar Hyper Hub” and as part of the bid £669k was required as match funding to the project. A further £131k has been included to cover other internal fees to deliver the project. It is proposed that officers continue to seek alternative funding streams for the match funding and a decision to commence the scheme will be subject to a further report to Executive.

 

25.        West Offices Data Centre (£380k in 2024/25) - West Offices Data Centre (DC) was installed and commissioned in 2012. The environmental conditions (temperature and humidity) need to be stable to enable the ICT Servers and supporting equipment to operate efficiently and continuously 24/7/365. The current system consists of four cooling units within the DC that push the cool air into the floor plenum which is released via the floor grilles into the server racks. The hot air from the servers is collated, then cooled and the cycle continues. The cooling units are supported by a series of condensers installed in the energy centre located against the City Walls.

 

26.        The purpose of this funding is to upgrade the system prior to a major failure of the DC that could cause significant disruption to council services and protect the significant revenue stream (c.£2m pa once anticipated lease deals complete). The proposal is to install 1 additional cooling system and replace the currently installed 4 x cooling systems resulting in 5 new systems in the DC.

 

27.        The DC requires a specific operating environment to enable ICT equipment to function correctly. This is achieved by the installation of air conditioning and humidity control equipment. Currently, 4no air conditioning units provide cooling to the server racks. This involves cool air being blown over the servers which removes the heat from the server, the warmer air is ejected at the rear and is returned the air conditioning system for cooling and the process continues.

 

28.        This proposal will address the risks of losing the cooling capacity and provide future resilience to the DC. Works are required due to some system components approaching end of life (10-12 years) and others becoming obsolete.

 

29.        Garden Bin Replacement £150k per annum 2024/25 to 2026/27 Total £600k) - The council introduced a Garden Waste Service in 2005/06 and as part of the scheme all Households on a garden waste round were provided with a green wheeled bin. The bins are now 18+ years old and a large number are failing due to constant wear and tear.

 

30.        It is proposed that, If the council is to introduce a chargeable waste service, should subscribers request a new bin due to damage they would receive one free replacement. Any further replacements would be a chargeable service to the resident.

 

31.        The funding is based on 15,000 replacement bins would be required over the period.

 

Rolling Programme Schemes – Prudential Borrowing

32.        The 2023/24 – 2027/28 capital programme contained a number of rolling programme schemes that require funding on an ongoing basis. This report extends the rolling capital programme to 2028/29 and also incorporates proposals which increase the level of currently approved rolling programme schemes by adding additional years across the financial years. These schemes are set out in the table below: 

 

Scheme Type / Description	Total Value	Financial Year
	£m
Structures (Special Bridge Maintenance)	3.234	2024/25 - 2028/29
Drainage	0.900	2028/29
Highways	5.070	2028/29
City Walls Maintenance	1.515	2026/27 - 2028/29
Fleet Replacement	8.510	2028/29
Cycle Access Barrier Refresh	1.000	2024/25 - 2028/29
Asset Maintenance	0.325	2024/25 & 28/29
Disabled Facilities Grant	0.475	2028/29
Disability Support Budget	0.300	2028/29
Major Items of Disability Equipment	0.167	2028/29
Telecare Equipment	0.309	2028/29
ICT Rolling Programme	2.820	2028/29
Project Support Fund	0.200	2028/29
Contingency	0.200	2024/25
Total Rolling Programme Schemes	25.025

Table 4 – Summary of Rolling Programme Proposals Requiring Prudential Borrowing Funding

33.        All of the £25.025m of rolling programme scheme will require revenue growth to fund (to support the prudential borrowing), the revenue implications are contained in the Financial Strategy 2024/25 – 2028/29 report also on this agenda.

 

34.        An overview of each scheme being proposed is set out in the following paragraphs.

 

35.        Structures (Special Bridge Maintenance) (£775k 2024/25, £615k 2025/26, £622k 2026/27, £617k 2027/28, £605k 2028/29 Total £3.234m) – The scheme encompasses all required work to ensure that the Council's highway structures are inspected and maintained in accordance with the Code of Practice for Well-Managed Highways Infrastructure. All highway bridges and other highway structures are fundamental to the transport infrastructure. They are relied upon to remain in service year after year and are carrying ever increasing traffic flows. The Highways Act places a statutory obligation on highway authorities to maintain the public highway. Costs for an inspection and assessment regime are included within this funding, routine principal and general inspections and bridge assessments help identify whether the structures are safe for use and fit for purpose.

 

36.        Other work will include bridge minor maintenance works identified from general and principal bridge inspections. This is for various bridges in the Council's bridge stock and will incorporate low, medium and high priority works on a case-by-case basis. The funding covers future major maintenance of bridges which will include bridge waterproofing and joint replacements, painting works, small bridge replacements and strengthening works.

 

37.        Drainage (£900k 2028/29) – Funding through the capital programme has enabled the team to repair and remedy persistent highway flooding problems, many of which also affected properties. Investigations in many parts of the city have all located unrecorded drainage infrastructure affected by blockages from silt, tree roots and damage by utilities.

 

38.        The Flood Risk Management team has developed a Surface Water Management Plan for the Council’s area which has been approved by Executive. Based on findings from the investigations and modelling it concludes that significant investment is required to restore the highway drainage infrastructure to a satisfactory standard to enable future flood risk to be managed effectively.

 

39.        This budget includes works that have been identified following drainage investigations.

 

40.         Highways Schemes (£5,070k in 2028/29) – The total annual rolling budget requirement for an optimum structural maintenance regime is circa £10m representing current costing. Outputs from the Council’s highway inspection and deterioration data (Gaist) will be used to target additional highways R&R funding to address emerging highway asset defects, proactive works will slow the deterioration of the city’s highway network across footways and carriageways. The current rate of highway depreciation is greater than the funding the service is receiving annually, the highways asset management team are therefore requesting capital funding required to slow the rate of depreciation across the network. The purpose of this funding is to indicate the need for capital investment to meet with the rate of depreciation recognising the work which is carried out annually to highlight the rate of decline.

 

41.        City Walls (£505k a year 2026/27 to 2028/29 Total £1,515k) – The scheme encompasses all required work to ensure that the City Walls are inspected and maintained in accordance with the adopted Conservation Management Plan. The City Walls are an Ancient Monument with the highest level of heritage significance, a key draw for tourism and of singular importance to the residents of York. As the owners of the schedule monument, we have obligations of care under the Monuments and Archaeological Areas Act 1979, The National Planning Policy Framework and The Planning (Listed Buildings and Conservation Areas) Act 1990.

 

42.        Costs for an inspection and monitoring regime are included within this bid, regular monitoring and general inspections identify how the monument is degrading, where intervention is warranted and keeps the structure safe and accessible. The bid includes provision for all routine conservation and maintenance works, as well as larger scale interventions for the area of the Monument that have been identified as of High at risk of damage.

 

43.        Furthermore, within the scope of planned conservation are intentions to improved access to and interpretation of the monument to meet our obligations under the Equalities act, as well as efforts to attract direct donations towards the cost of future maintenance, along with building on partnership working arrangements so that we can tap into funding currently unavailable to the local authority.

 

44.        Fleet Replacement (Total £8,510k in 2028/29) - A vehicle replacement policy has been developed and agreed by members to manage the replacement of vehicle and plant assets. The main purpose of this policy is to deliver electric vehicles to council’s light commercial fleet and a select few HGV fleet assets with the aim to be carbon neutral by 2030 and to ensure that the investment made into the fleet (electric and fossil fuelled) and the charging infrastructure achieves an environmentally friendly fleet that is utilised and applied in the most effective way. Identify and meet the fleet needs of the Council, for operational and support functions. Maintain cost-effective and timely processes for repair and maintenance, commissioning, decommissioning and disposal of fleet assets and to ensure statutory requirements are adhered to. To maintain safe, efficient and effective vehicles/plant & equipment, ensuring these fleet assets are replaced by following optimum replacement cycles in line with the Asset Management Strategy also to develop an electric charging infrastructure at the Hazel Court depot and satellite sites to ensure full charging capacity of all vehicles at all times can be met, there is significant investment required for this infrastructure but offset against fuel savings this cost can be recovered over time.

 

45.        The purpose of this funding is to highlight the need for renewal of the expired CYC fleet within all services areas ensuring that all services have vehicles that maximises value for money and remains environmentally and energy efficient using electric vehicles where possible with the end goal to have a full electrified fleet and be carbon neutral by 2030 that will maintain service delivery for the council. This bid will allow the fleet replacements become part of the overall council’s capital programme and ensure a continuous cycle of vehicles fit for purpose.

 

46.        Cycle Access Barrier Refresh (£200k a year 2024/25 to 2028/29 Total £1,000k) - Officers recently commissioned a review of Access Control Barrier measures across the York area. The twin aims of this review were to:

i.          Identify the volume and variability of designs currently in use across the city and assess which of these comply with current legislation and design guidance;

ii.         To propose a policy on the use and design of barriers which can subsequently be adopted by the appropriate council body as council policy. 

 

47.        A report will shortly be brought forward seeking adoption of the proposed policy. This policy will help council departments and other external agencies address their duties under the Equality Act to improve accessibility for many groups with protected characteristics or specific access needs. An advisory panel is currently being assembled to undertake the next phase which will be to prioritise the list of non-compliant barriers in order that they can be addressed in a logical order.  This funding will tackle the prioritised list of barriers. Works will primarily comprise removal or redesign of the non-compliant barriers. Of the 1000+ sites identified at least 500 are non-compliant therefore a large amount of work will be needed to tackle these sites on a rolling programme basis.  Additional resource will be needed at the design and delivery stages to accommodate the additional work included within this funding.

48.        Asset Maintenance (£50k in 2024/25 and £275k 2028/29 total £325k)–There is currently a rolling programme capital scheme for health and safety repairs of £250k per annum with 4 years left to run.  The previous year’s allocations have been spent and the Council has a number of properties which have been identified as being retained for service delivery and/or delivering Council objectives, either directly or indirectly, through the Corporate and Community Asset Strategies and also individual service reviews.

 

49.        A significant number of these properties have urgent health and safety repairs which will need to be carried out in the coming years to make them sustainable for future service delivery.  The budget will also be used to cover the council's responsibility for closed churchyards.

 

50.        There will also need to be substantial other work required to a proportion of these properties to refurbish or improve them to meet the service requirements, but these works will be the subject of separate business cases as and when necessary. This funding therefore is to extend the approved annual rolling programme for a further year to help fund these critical repairs to the retained buildings. The additional funding in 2024/25 will be used to address urgent repairs at the Tractor sheds near the Knavesmire.

 

51.        Disabled Facilities Grant (£475k 2028/29) – This funding is to continue to allow the payment of mandatory disabled facilities grants (DFG’s) in line with statutory requirements (The Housing Grants, Regeneration and Construction Act 1996) and the Council’s policies last reviewed in July 2017. The DFG rolling programme enables older and disabled persons to remain safely in their own home and maximise their independence. The funding also ensures the delivery of the falls prevention service aimed at providing early intervention in the residents home looking to reduce the risk of falling by assessing the home, the environment and the person. Both programmes directly contribute towards the Better Care Fund objectives by preventing, reducing and delaying the need for NHS and Adult Social Care Services.

52.        Disability Support budget (£300k 2028/29) – This extension to funding is to continue to provide assistance for disabled vulnerable customers who need financial help. The help comes through the form of grants and top up loans to help disabled vulnerable adults and parents with disabled children to provide cost effective adaptations in their homes to ensure that they continue to live and maintain their independence. The help covers the shortfall between the cost of the eligible work and the mandatory disabled facilities grant, or to purchase a more suitable home where it is more cost effective than to adapt the current home and the relocation expenses. Given the increasing number of older people and the increasing life expectancy of children with complex needs there is a need to increase funding year on year.

 

53.        There is a direct link with the disabled facilities grant programme. The funding directly contributes to the priorities of the Better Care Fund and Council by preventing, reducing, and delaying the need for NHS and Adult Social Care Services.

 

54.        Major Items of Disability Equipment (£167k 2028/29) – This funding is to extend the current scheme whereby equipment is provided to vulnerable individuals which enables them to remain in their own homes and live in the community. Timely supply of equipment is an essential component of prevention and enabling people to continue to live safely in their own homes. It also contributes to successful community re-ablement and is a key component of hospital discharge packages.

 

55.        Keeping people at home, in their communities is crucial for the individual's long-term wellbeing but also the financial sustainability of the authority as long term formal care is significantly more expensive than the one-off investment in equipment.

 

56.        Telecare equipment (£309k 2028/29) – This scheme is to extend the current scheme funding Telecare equipment into 2028/29. Keeping people at home, in their communities is crucial for the individual's long-term wellbeing but also the financial sustainability of the authority as long term formal care is significantly more expensive than the one-off investment in equipment.

 

57.        Under this scheme sensors will continue to be installed in vulnerable customers' homes to deal with specific assessed risks. The sensors will be linked to our Community Alarm system and trigger alerts automatically given a programmed set of circumstances, ensuring speedy response from the warden service.  These pieces of equipment provide customers with peace of mind and 24 hour monitoring of their circumstances. In some cases, the provision of telecare equipment can prevent a move to residential care and can provide monitoring so that smaller care packages can be commissioned. Telecare allows more people to be looked after at a lower cost and several studies have shown its cost effectiveness.

 

58.        ICT Rolling Programme (£2,820k 2028/29) - This extension funds the design, development, procurement and deployment of evolving digital customer centric technologies to help improve and personalise the customer experience by supporting the delivery of the organisational transformation, the evolving Digital Service Programme and CYC's continual improvement programme. The scheme also supports the customer strategy and enables the delivery of accessible and effective council services for its residents, businesses, and the city. 

 

59.        It also funds the maintenance, development and compliancy requirements of the key corporate enabling and supporting ICT infrastructure and application estate that is required to underpin the delivery, sustainability and security of these programmes supporting technologies whilst also maintaining the organisation’s business as usual critical ICT services to staff and citizens.

 

60.        Project Support Fund (£200k 2028/29) – To extend the existing funding into 2027/28 to allow the continuation of the capacity to provide professional advice (primarily legal but also including finance and asset management) to support the Capital programme, and in particular major complex regeneration/building schemes including York Central, Castle Gateway, York Outer Ring Road to support the successful delivery of bringing new assets into operation.

 

61.        Contingency Funds (£200k 2024/25) – Included within the capital programme is a contingency which is available to reallocate to other capital schemes if there are unexpected cost increases which cannot be managed within the programme. At Monitor 3 the Contingency stands at £1,176k. Given the scale of the capital programme it is proposed to increase by £200k. The use of the contingency will need to be approved by Executive.

 

 

Rolling programme - Externally Funded + HRA Funded

62.        In additional to part funded rolling programme schemes, Schemes that are fully externally funded are proposed as part of this budget process. This table shows the level of external funding that is increasing existing schemes and which year the change takes effect in:

Scheme Type / Description	External Funding	Financial Year
	£m
Existing General Fund Schemes New External Funding
Highways schemes	2.835	2028/29
Integrated Transport	1.570	2028/29
Disabled Facilities Grant	1.625	2028/29
Total	6.030
New General Fund Schemes – New External Funding
Renewable Heating Upgrade - Alex Lyon House	1.051	2024/25
Honeysuckle House – heat pump communal heating upgrade	0.844	2024/25
Street Lighting LED Conversion	0.352	2024/25
Commercial Buildings LED Lighting Renewal	0.354	2024/25
Askham Bar EV Charging	1.243	2024/25 and 2025/26
New General Fund Schemes – New External Funding TOTAL	3.844
Total – New External Funding	9.874

Table 5 – Summary of New External Funding

63.        The funding for the schemes set out above for the rolling programmes have been updated to reflect the indicative funding settlements in 2028/29.

64.        The council was successful in being awarded £2.601m grant funding from the Mayoral Combined Authority from the Net Zero Fund. The funding will improve the energy efficiency of public buildings and street lighting and installing renewable heating solutions at 2 council housing blocks. There are match funding commitments from schemes already in the capital programme for street lighting improvements and the introduction of LED lighting at West Offices / Hazel Court.

65.        The table also includes the LEVI funding identified for the Askham Bar EV charging scheme totalling £1.243m which was referenced in paragraph 23 and 24.

66.        The Housing Revenue Account (HRA) generates funds within the account to deliver capital repairs and investment in its properties.

67.        Table 6 shows the overall movement (growth) against the existing approved expenditure plans.

Table 6 – Summary of HRA investment

68.        Major Repairs & Modernisation of LA Homes (£11,400k growth 2028/29) – This is the second year of delivering the Housing Investment and Energy Retrofit Plan 2023-2028 to allow achievement of key objective that all homes will meet and retain the government’s Decent Homes Standard (DHS).  DHS is the minimum standard and all homes will retain this standard within the planned programmes ensuring that failing components are updated ahead of their failure date.  Works will ensure that homes reach the “City of York Standard”, focusing upon matters of interest for tenants such as:

 

·               Improving the energy efficiency of homes, seeking to bring the Energy Performance rating of homes up from D to C.

·               Working to complete the upgrading of older uPVC windows, installing high performance and thermal efficient new windows.

·               Continuing the programme of work to provide effective protection in walls and floors to prevent damp penetration and measures to manage or eradicate water below suspended floors, where problems have been identified.

·               When we modernise homes, ensure that there are extractor fans in both the kitchen and bathroom which are humidistat controlled, helping to control the moisture which can give rise to mould.

·               Installing secure, ideally composite, external doors, replacing soft-wood doors as a priority.

The major repairs and modernisation budget for 2024/25 is £11,919k which includes £1,580k carried forward from 2023/24. A preliminary breakdown of the type and value of works are provided below:

 

Table 7 – Breakdown of Major Repairs & Modernisation of LA Homes 2024/25 Budget

 

69.        The intention of these projects are to ensure the Council invest in and plan for the future, ensuring we support safe, sustainable, affordable and good quality homes. 

 

70.        Assistance to Older and Disabled People (£680k 2028/29) – This will see continued investment in undertaking adaptations to properties following needs assessment of tenants and their dependants who have some sort of disability, ensuring they can remain in their property and lead as near normal life as possible.

 

71.        Housing Environmental Improvement Programme (£170k 2028/29) - The Housing Environment Improvement Programme gives the opportunity to link with other funding streams to deliver schemes which have an impact for all residents and realise economies of scale. Improvements include providing solutions for car parking, secure external storage facilities for tenants of flats, improving security by providing fencing and /or gates with keypads, improving external environments through landscaping. Whilst there is a review of how this funding can maximised the benefits to the HRA estates and council stock, it is proposed that the funding continues to be set aside.

 

72.        A decision was taking by Executive in July 2022 to resolve major health and safety concerns at both Bell Farm and Glen Lodge and decant residents from these properties to prepare the buildings for a programme of major refurbishment. Since the approval, all residents have been successfully relocated to alternative accommodation and the buildings are now vacant. The paragraphs below detail the investment required at the two sites.

 

73.        Glen Lodge (£2,444k new funding 2024/25) - Glen Lodge is an Independent Living Community, originally built in the 1970s with an additional wing added to the building in 2017. There are a total of 57 apartments and 12 bungalows, with 25 apartments in the newer wing and 32 in the original building. No major work was carried out to the existing building during the work to build the newer wing.

 

74.        The refurbishment of the original part of this building was primarily aimed at dealing with the replacement of the domestic hot and cold water systems which had repeatedly become contaminated with legionella and was being managed through chemical dosing. Following approval to progress the project in July 2022 a number of intrusive surveys were undertaken to better understand the condition of the building. These surveys have identified a number of critical issues which, following consultation with internal and external subject experts, have resulted in the inclusion of additional works to be incorporated into the scope of the project.

 

75.        During the surveys it became apparent that services were contained within an asbestos containing service trench. Both the electrical services and heating pipework to the building were at the end of their useable life and likely to fail within the next 5 years and therefore the decision was made that whilst the building is vacant, these major disruptive works will be undertaken to reduce the ongoing maintenance requirement of the building and significantly reduce the risk of disruption to future residents.

 

76.        To date the project has received an initial £10,000 from Heat Network Efficiency Scheme to complete an optimisation study for the new heating network. Once this study is complete, the service will submit a further bid to seek match funding for the heating network which is likely to be in the region of £200,000 if successful.

 

77.        The scope of work now comprises of; replacement of hot and cold water pipework, replacement of the heat network including low surface temperature radiators, a full rewire, remodel of ground floor properties to enhance accessibility, essential fire strategy works, window replacement, kitchen and bathroom replacement, redecoration and new floor finishes to flats and communal spaces.

 

78.        Tenders were returned in October 2023 with 6 compliant bids received. The commercial and quality aspects of the tenders were analysed and Hobson & Porter have been named as the preferred bidder.

 

79.        The total cost of the scheme is estimated at £3.204m of which £2.6m relates to the main contract.

 

80.        There is no existing budget however there are a number of planned maintenance works that were not complete whilst major works to resolve the water hygiene issues were awaited therefore there is an contribution from the planned maintenance budget in order to complete these works as well as other.

 

 

          Table 8 – proposed funding for Glen Lodge HRA scheme

81.        The additional budget requirement for this project is therefore £2.444m. The project is anticipated to start on site in Spring 2024 and will take approximately 12months to complete. With the building providing care the reoccupation will be complex and work with colleagues in Adult Social Care will commence imminently to bring the original side of the building back into use as quickly as possible and minimise future void times.

 

82.        It is proposed that the additional value £2.444m is funded by using Housing Capital Receipts that have been generated from council house sales that are not set aside for right to buys and general sales.

 

83.        Bell Farm (£3,463k new funding 2024/25) - The Bell Farm project consists of 40 properties within the Bell Farm Estate which are in need of significant improvement works. The 40 apartments primarily sit along Bellfarm Avenue and Middleham Avenue. These properties were originally houses which were converted to 1 bedroom apartments approximately 40 years ago. At this point bathroom pod extensions were added to the existing buildings. These are constructed from asbestos containing materials which was common at the time. The pod structures have degraded, creating a health and safety risk if not tackled.

 

84.        The works proposed will include demolition and rebuild of the pod extensions, the new extensions will be built to a high level of thermal comfort with enhanced insulation. A full refurbishment and remodel of the homes will be undertaken including retrofit works to significantly improve the energy efficiency of the homes. These works include; replacing cavity wall insulation, external wall insulation to solid gable end walls, new UPVC windows, new composite doors, upgrading the DPC to prevent rising damp, replacement of kitchens and bathrooms. Where existing gas boilers are out of warranty and cannot be reused these will be replaced with Air Source Heat pumps, removing the properties from dependence on fossil fuels.

 

85.        The project has been successful in receiving Social Housing Decarbonisation Funding to part fund the works. As part of the project, the Council has also repurchased 2 leasehold properties to increase the overall supply of much needed 1 bedroom homes.

 

86.        Tenders were returned in October 2023 with 3 compliant bids received. The commercial and quality aspects of the tenders were analysed and Equans have been named as the preferred bidder.

 

87.        The total cost of the scheme is estimated at £4.790m of which £3.925m relates to the main contract.

 

88.        There is no existing budget however there are a number of planned maintenance works that were not complete whilst major works to resolve the water hygiene issues were awaited therefore there is an contribution from the planned maintenance budget in order to complete these works as well as other.

 

Table 9 – proposed funding for Bell Farm HRA scheme

 

89.        The additional budget requirement for this project is therefore £3.463m. It is proposed that this value is funded by using Housing Capital Receipts that have been generated from council house sales that are not set aside for right to buys and general sales. The project is anticipated to start on site in Spring 2024 with first occupations expected approximately 12 months later.

 

90.        Local Authority Homes (no proposed budget changes) - All 140 homes at the Lowfield Green site are now complete along with two areas of public open space for the enjoyment of new and existing residents. In total the site provides 56 affordable homes which are fully occupied and provide much needed accommodation for the city. There are final works ongoing to complete the highways prior to adoption in 2024.

 

91.        Construction continues to progress on the two certified Passivhaus sites, Duncombe Barracks and Burnholme led by contractor Caddick Construction. Duncombe Barracks commenced in 2022 and the construction of the superstructure is now significantly advanced. The site will deliver 34 new homes with first handovers anticipated in 2024. Burnholme will deliver 78 new homes. Both sites are 60% affordable housing supported by grant funding from Homes England.

 

92.        Following the commitment for all future council housing sites to be developed as 100% affordable, Ordnance Lane has undergone a process of evaluation and minor redesign in order to achieve this target. As a result the site density has increased slightly from 85 homes to around 100 homes to reflect housing need and a planning application will be resubmitted in January to formalise this change. The new homes on Ordnance Lane will be built to Passivhaus standards and utilise renewable technologies to ensure the homes are affordable for new residents. The project received OPE grant funding of £2.4m to carry out enabling works. A contractor has been procured for this work and will start on site in early 2024.

 

93.        Procurement is underway for a multidisciplinary team to lead the design of Willow House and wider South Walmgate masterplan. This project will aim to deliver 100% affordable housing in the heart of the city. Community engagement will commence in Spring 2024 to begin to develop plans for the site through a process of co-design with local residents, businesses and wider stakeholders. This project has also received grant funding through the York and North Yorkshire Devolution Brownfield Housing Fund to remove site abnormals and accelerate the delivery of much needed new homes.

 

94.        The Housing Delivery programme continue to deliver low-cost home ownership through two grant funded schemes; Homes England’s Second Hand Shared Ownership and YNY Devolution funded Second Hand Shared Ownership with retrofit. Combined these two schemes will deliver 40 new affordable homes and to date over 30 homes have been acquired. It is anticipated that all homes within these programmes will be purchased by Spring 2024. In November 2023, an additional £1.3m of grant funding was secured through the Local Authority Housing Fund to support the purchase of an additional 10 homes, 7 homes for Afghan resettlement households and a further 3 homes to contribute towards meeting wider temporary accommodation needs in the city. Work is underway to purchase these homes and is expected to be concluded by Spring 2024.

 

Funding Position – Council Prudential Borrowing

95.        The budget proposals requires additional prudential borrowing to existing rolling programme schemes of £25.025m and to new schemes totalling £3.353m. This results in a total increase in the level of debt (the underlying need to borrow for capital investment purposes only) of £28.378m over the 5 year programme. Table 9 shows the financial impact on a year by year basis and over the 5 year period.

 

	24/25 £000	25/26 £000	26/27 £000	27/28 £000	28/29 £000	Total   £000
Rolling Programme	1.225	0.815	1.327	1.322	20.336	25.025
New Schemes	2.203	0.850	0.150	0.150	-	3.353
Net Increase in PB	3.428	1.665	1.477	1.472	20.336	28.378

Table 10 – Net Funding Position of Prudential Borrowing Schemes

96.        The incremental revenue costs of the new schemes funded by prudential borrowing is estimated at £2.838m over the 5 year budget period, assuming borrowing of £28.378m. Actual borrowing may be taken during 2024/25, although the costs are not incurred in revenue until the year following any capital expenditure. The Financial strategy report elsewhere on the agenda includes revenue growth of £1.6m to cover additional capital investment.

Summary of Analysis

97.        This table summarises the additions and amendments made as part of this report (outside of re-profiling) split by rolling programme schemes and new schemes (by funding type) showing an overall increase in the capital programme of £56.409m of which £38.616m relates to the extension of the programme to future years.

 

 

	24/25 £m	25/26 £m	26/27 £m	27/28 £m	28/29 £m	Total £m
1) New CYC Schemes Funded by CYC PB (table 3)	2.203	0.850	0.150	0.150	-	3.353
2) Rolling Programme Schemes Funded by CYC PB (table 4)	1.225	0.815	1.327	1.322	20.336	25.025
3) Existing Schemes Funded by External Grant (table 5)	-	-	-	-	6.030	6.030
4) New General Fund and HRA schemes Funded by External Grant (table 5)	3.223	0.621	-	-	-	3.844
5) HRA Schemes Funded by HRA (table 6)	5.907	-	-	-	12.250	18.157
Total Net Increase to Capital Programme	12.558	2.286	1.477	1.472	38.616	56.409

Table 11 – Summary of new expenditure by funding type 2024/25 – 2028/29

98.        The outcome of the proposals outlined above if accepted are illustrated in the next table which sets out the proposed capital budget for each directorate over the next 5 years and in detail in Annex B.

 

Gross Capital Programme	2024/25 £m	2025/26 £m	2026/27 £m	2027/28 £m	2028/29 £m	Total £m
Children’s services	12.374	5.275	1.045	0	0	18.694
Adult Social Care	0.682	0.705	0.728	0.752	0.776	3.643
Housing & Community Safety	44.900	23.318	15.301	14.638	14.35	112.507
Transport, Highways and Environment	78.164	45.983	29.041	19.17	20.195	192.553
Property Services	45.932	0.275	0.275	0.275	0.275	47.032
ICT	2.509	3.170	2.82	2.82	2.82	14.139
Customer & Corporate Services	0.627	0.200	0.200	0.200	0.200	1.427
Communities & Culture	3.491	0	0	0	0	3.491
Climate Change	1.45	0.250	0	0	0	1.700
Total Capital Programme	190.129	79.176	49.410	37.855	38.616	395.186

Table 12 – Proposed Capital Programme 2024/25 – 2028/29

 

 

 

 

 

 

Other Major Capital Projects

99.        York Outer Ring Road Dualling - During 2023/24, the main focus of activity for the project team has been supporting the determination of the planning application for the scheme.  The magnitude and complexity of the project has meant that a number of challenges have been raised from statutory consultees e.g. National Highways and the Environment Agency.  These have been time consuming to address and as such responding to, and satisfying the issues raised from these and a range of other sources has impacted on the programme to achieve planning approval.  The previous programme was to get to a planning committee by spring 2023, this has now slipped to February/March 2024. 

 

100.    Meanwhile concurrent workstreams have continued in other areas.  Work continues to take place to attempt to purchase land for the scheme.  This is slow as many landowners appear to be waiting to see what happens with the planning application.  In parallel, documentation is being prepared for submission of a Compulsory Purchase Order and this is completed to an advanced stage.  Other concurrent work includes completion of the detailed design, preparations for the final business case and a cost review to understand the impacts of construction inflation on the scheme.  2024 will be a time therefore to secure planning approval and acquire as much land as possible by private agreement.  Later in the year the project team will turn attention to finalising the business case and commence procurement of a contractor for commencement of construction in spring 2025.

 

101.    York Station Gateway - In January 2022, a complex package of enabling works began involving the diversion of key statutory utilities from in and around Queen Street Bridge to enable its demolition. This package of work is valued at £1.8m (excluding risk, contingency, etc) and is expected to be complete by January 2024.

 

102.    In spring 2022, a procurement was carried out to identify a delivery contractor for the Package 2 (Highway Works) and Package 4 (Loop Road Works). Three tenders were received in June 2022 and John Sisk and Son was identified as the preferred contractor with a tender value that fell within the forecast budget for Packages 2 and 4. John Sisk and Son was subsequently appointed and pre-construction activities commenced in July 2023 and site works commenced for Package 2 (Highway Works) commenced in October 2023. Completion of Packages 2 and 4 are programmed for November 2024.

 

103.    Package 2 of the scheme requires the acquisition of two areas of land: an area of the station long stay car park owned by Network Rail; and an area of land to the front of George Stephenson House owned by Canada Life. Both parcels of land have been acquired at a total cost of £2.54m (excluding fees). A further parcel of land currently in the station car park is required for the delivery of Packages 3 and 4 of the scheme and negotiations are taking place for completion in Spring 2024.

 

104.    Haxby Station - During 23/24 the Towthorpe Road site (owned by CYC) has been the single option being developed further by CYC and their delivery partners Network Rail, to outline design stage.  A revised business case was presented to the Department for Transport in March 2023, to request funding in full for the project – estimated full project cost £23m (with CYC contributing an agreed fixed £4.3m) and the remainder to be provided by DfT, via their Restoring Your Railway fund (awarding directly to Network Rail).  To date the project has received £1.5m in development funding from DfT. 

 

105.    In October 2023 the Prime Minister announced plans for ‘Network North’, which included Haxby Station as a named project to be funded to delivery.  Due to the delay in government decision, delivery of the station has now slipped beyond the 2024/25 year.

 

106.    As such, a planning application for the station is anticipated to be submitted, with potential determination by the summer. In the meantime, Network Rail will be undertaking detailed design and procurement exercises to take on a contractor to construct the station.  Expectations are now that site work will commence late in 2024, with full construction expected between January and Summer 2025.  Target date for entry into service and the station open for passengers is now December 2025.

 

107.      York Central  - The project is now in the delivery phase with Homes England responsible for the access infrastructure contract IP2 – and the appointment of a Master Developer.  The site will be opened up for development with the access infrastructure work scheduled for completion in summer 2026, and with construction of the first office development to happen in parallel. The council still has a significant role to play as the local planning / highway authority and as a funder with Enterprise Zone borrowing supported by increased revenues under the Devolution Deal.  Work by the National Railway Museum on their new Central Hall is also underway, as part of a £50m Vision 2025 investment.

 

108.    Castle Gateway - The delivery of the Castle Gateway project has been impacted by a number of factors – specifically construction cost inflation and delays to the announcement of potential Levelling up Funding by government.  In November 2023 Executive agreed the way forward and work will now commence to revise designs for the Castle / Eye of York and the delivery of Affordable Housing.  The strategic importance of St George’s Field as a parking location is acknowledged and proposals for improving parking provision here with coach drop off facilities are being progressed.

Consultation Analysis

 

109.    There has been widespread consultation over the budget process and this has been detailed within the Financial Strategy 2024/25 to 2028/29 report elsewhere on the agenda.

 

Organisational Impact and Implications

 

110.    The recommendations in the report potentially have implications across several areas.  However, at this stage:

 

·               Financial implications are contained throughout the main body of the report. 

·               Human Resources (HR), the capital programme supports a number of staff within the organisation who deliver capital schemes. The level of funding available will impact the number of staff who are required. It is not anticipated that the changes in the programme reported will have a significant impact on staffing levels.

·               Legal Local authorities are required under the capital finance regime set out in the Local Government Act 2003 to have regard to the Prudential Code when carrying out their duties. The key objectives of the Code are to ensure ‘… within a clear framework, that the capital expenditure plans of local authorities are affordable, prudent and sustainable, and that treasury management decisions are taken in accordance with good professional practice and in full understanding of the risks involved and how these risks will be managed to levels that are acceptable to the organisation.’       

Schemes within the capital programme will themselves be in receipt of legal advice where necessary throughout the year.

·               Procurement, Whilst there are no direct procurement implications relating to the report itself, procurement will be a main tool used to deliver some of the upcoming projects and will be a supporting tool for the capital programme. Should works and/or services become apparent, these must be procured via a compliant, open, transparent, and fair process in accordance with the council’s Contract Procedure Rules and where applicable, the Public Contract Regulations 2015. Creative and innovative ways of procuring will be explored to ensure York’s local supply chain can tender for any contracts to support and improve the local economy. Further advice regarding the procurement process and development of procurement strategies must be sought from the Commercial Procurement team. 

·               Health and Wellbeing, reductions in spend in some areas could impact on the health and wellbeing of both our staff and residents.  The impact of any reductions in spend will continue to be carefully monitored so that implications can be considered and mitigated where possible.

·               Environment and Climate action, there are no direct implications related to the recommendations, but each scheme will need to consider the Environment and Climate impacts as they progress through future decisions.

·               Affordability, Works to improve affordability of homes are included through the provision of a wide range energy efficiency improvements and affordable house building plans. The Rough Sleepers Accommodation Programme provides homes for those at risk of homelessness in the city, therefore this report has a positive impact on affordability of housing in the city.ll

·               Equalities and Human Rights, whilst there are no specific implications within this report, some of the individual schemes within the programme make due consideration of these implications as a matter of course.

·               Data Protection and Privacy, there are no implications related to the recommendations.

·               Communications, the information set out in this report necessitates both internal and external communications. 

·               Economy, the council’s capital programme does provide work for regional and national suppliers / contractors so will impact the wider economy.

Risks and Mitigations

 

111.    There are a number of risks inherent in the delivery of a large scale capital programme. To mitigate against these risks the capital programme is regularly monitored as part of the corporate monitoring process, and the project management framework. This is supplemented by internal and external audit reviews of major projects. In addition, the Major Projects all have regular monthly Board meetings to plan, monitor and review their capital schemes to ensure that all capital risks to the Council are monitored and where possible minimised.

112.    Additional risk exists in relation to existing schemes in the Capital programme whereby costs are incurred in developing a project, however no asset is achieved. Such costs may then need to be written off to the revenue account. The risks in relation to this are referred to separately in the Revenue Budget Report also on this Agenda.

 

Wards Impacted

 

113.    The schemes within the capital programme impact all wards across the council.

 

 

Contact details

 

For further information please contact the authors of this Decision Report.

 

Author

 

Name:	Patrick Looker
Job Title:	Head of Service Finance
Service Area:	Finance
Telephone:	Ext 1633
Report approved:	Yes
Date:	15 January 2024

Annexes

Annex A – Capital Budget Growth 2024/25 to 2028/29

Annex B – Restated Capital Budget 2024/25 to 2028/29