Agenda item

Capital Contingency

Minutes:

Councillor Williamson, Deputy Leader and the Executive Member for Financial Sustainability, submitted a report on a recommendation to Council that an additional general capital contingency be established.  He referred to the main points detailed in the report, and said that this measure would assist the completion of capital schemes which could otherwise be delayed for reasons which could not have been anticipated, and in particular as a result of the impact of Covid 19.  The Council’s four year capital programme was over £122 million, and the capital contingency amount proposed was £2.5 million. 

 

Councillor Pope said this sum, representing 2% of the capital programme, was a prudent provision.  He asked whether there might be a need to make further provisions in future. 

 

Councillor Williamson said a contingency of 2% seemed reasonable, considering this amount would apply across the whole capital programme.  If any further contingency were needed, a report would be brought to Council.

 

Councillor Redfern said the report referred not only to the impact of Covid 19 on costs, but also to Brexit.  There was risk of increased construction costs for Old River Lane and other projects as a result of Brexit.  She asked whether a risk assessment on the impact on projects of increased costs due to Brexit should be carried out.

 

Councillor Williamson said the aim of this recommendation was to cover risks affecting the projects which were already underway, such as Old River Lane and the Grange Paddocks Leisure Centre. 

 

Councillor Redfern questioned whether approval for spending could be a matter for the Executive as a whole, and not only the Chief Executive. 

 

Councillor Williamson said it was necessary to avoid delays leading to works stopping on a project in order to seek approval at a meeting for use of the capital contingency. 

 

Councillor Redfern said it was better that the decisions were taken by the Executive as a group, rather than by an individual. 

 

The Leader said there was a need to react quickly, so the delegation provided for the expenditure to be authorised by the Chief Executive in consultation with the Executive Member.  She asked the Section 151 Officer to give assurance on the validity of these arrangements. 

 

The Interim Head of Strategic Finance and Property Services, as Section 151 Officer, confirmed that the control process was appropriate.  He said expenditure would be reported back to the Executive. 

 

Councillor Goldspink said she supported the establishing of this contingency fund.  She asked that Members be informed immediately, perhaps via the Members’ Information Bulletin, of any expenditure authorised under these arrangements.

 

The Leader thanked Councillor Goldspink for her suggestion, and agreed that the information on such expenditure under delegation would be provided in this way.

 

Councillor Williamson proposed and Councillor Rutland-Barsby seconded, a motion to support the recommendations in the report.  The motion being put to the meeting, and a vote taken, it was declared CARRIED. 

 

RESOLVED – to recommend that (A) Council approve a capital supplementary estimate of £2.5 million is established as a general capital contingency; and

 

(B) the use of the capital contingency be delegated to the Chief Executive in consultation with the Executive Member for Financial Sustainability and that use of the contingency be reported to the next meeting of the Executive.

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