URL: https://rother.moderngov.co.uk/ieDecisionDetails.aspx?ID=1848

Decision Maker: Cabinet

Outcome:

Is Key Decision?: No

Is Callable In?: Yes

Purpose: To provide Members with an update in respect of the Council’s Capital Programme and Corporate Development Team Project Update

Content: Members considered the Capital Programme (CP) and Corporate Development Team Update report, together with confidential Appendix A which detailed a summary of progress on the Development Programme.  The report provided Members with an update on the position of the CP, further detail on some of the more significant schemes, and helped to ensure a wider understanding of the financial challenges and pressures being faced in terms of delivering an affordable CP.   The Council had a significant CP of approximately £183m, with a balance of £115m to be spent over future financial years, as detailed in Appendix B (Minute Ref CB25/15 above).    The CP was reviewed in November 2024 and reduced by £80m.  Due to current economics and market forces, the impact of Local Government Reorganisation (LGR) and formation of a new Shadow Unitary Authority and Unitary Authority in April 2027 and 2028 respectively, several schemes had been paused as detailed in the report.  It was noted that at this time last year the CP was around £247m and had £195m to spend over future years, so the review had significantly reduced the size of the CP and some of the risks, particularly in relation to the borrowing exposure.   The capital financing cost within the Revenue Budget for 2024/25 was just under £1.1m (Minimum Revenue Provision [MRP] £0.5m, interest paid 0.6m), which resulted from the borrowing undertaken to support the Council’s former Property Investment Strategy.  The forecast for 2025/26 was £1.5m (MRP £1.0m, interest paid 0.5m) and reflected the ongoing financial cost of the CP, of which a significant proportion (39%) was financed through borrowing, an improved position down from 55% last year.  The CP was now being funded from grants and contributions (54%) and 39% coming from borrowing, with the balance made up from capital receipts, which had a positive impact on the revenue position.   There is a requirement to identify additional capital receipts, grants and contributions to help finance the CP to minimise borrowing costs and any negative impact on the Council’s Revenue Budget.   The report detailed how the CP could be funded through capital receipts; borrowing, grants and contributions; revenue funding; community infrastructure levy; and Section 106 receipts, and the impact the various ways could have on the Council’s wider finances and ability to deliver an affordable CP.   The position as at July 2025 was highlighted within the report regarding the following significant schemes:   ·           Blackfriars Housing Development – Infrastructure Only (£22m) ·           Barnhorn Green GP Surgery and Industrial Development (£12.5m) ·           King Offa Residential and Leisure Scheme (£3m) ·           Rother DC Housing Company Ltd Investment (Council Loans) (£40m – subject to approval ·           De La Warr Pavilion and Heart of Sidley Community Hub (£21.5m) ·           Camber Sands Welcome Centre (2.7m – subject to approval) ·           Housing – Temporary Accommodation Purchase Phases 1 and 2 (£24.5m) ·           Plan for Neighbourhoods – Formerly Long-Term Plan for Towns (£15m).   Additional detail on each of the above schemes was outlined in Confidential Appendix A, which contained commercially sensitive information.  Cabinet did not consider it necessary to go into confidential session to discuss the contents of Appendix A.  It was noted that there had been an unavoidable delay at the Camber Sands Welcome Centre due to Southern Water infrastructure, which was hoped to be resolved shortly.    As approved in July 2024, a Corporate Development Team (CDT) was established, and the current structure was detailed at Appendix B to the report.  Following two rounds of recruitment, several new roles were filled, through a mixture of internal and external appointments.  Unfortunately, not all roles were filled, with three current vacancies, and these responsibilities continued to be covered by interim support where required, with some roles remaining vacant.  Recruitment was running concurrently to find permanent staff; however, it was a difficult time to recruit into local government for these types of roles, which were in competition with the private sector.  The Council was in receipt of £48m external grant funding, some of which would be used to support these staffing resource costs.    Several governance improvements, specifically in relation to the CP and related reporting, were currently also being embedded by officers including the standardisation of project management documentation; financial appraisal tools and techniques to help assess financial viability; a CDT Project Management Handbook; a gateway process with all programme budgets aligned; project and budget monitoring; earlier engagement techniques; and regular project review meetings etc.  There would also be greater transparency and reporting of the CP to Members through the committee system, including increased scrutiny and challenge regarding proposals.  A recent CP audit recognised the improvements that had been made since the last audit in 2022/23 and since the CDT had been established.   Members were pleased to note the report.     RESOLVED: That the report be noted.   (Appendix 1 was considered exempt from publication by virtue of paragraph 3 of Schedule 12A of the Local Government Act 1972, as amended).   (Councillors Field and Timpe both declared an Other Registerable Interest as a Trustee of the De La Warr Pavilion Charitable Trust, and in accordance with the Members’ Code of Conduct remained in the meeting for the consideration thereof.)

Date of Decision: July 28, 2025