1 THE ISSUE

1.1 This report informs the Council Executive of the current position of the 2002/2003 Capital Programme and available resources.

2 RECOMMENDATION

2.1 That the Executive:

a) notes the current position of the 2002/2003 capital programme;

b) approves the incorporation of additional funding to the 2002/2003 programme as detailed in paragraph 4.1;

c) notes the current position of available resources.

3 FINANCIAL IMPLICATIONS

3.1 Included in the report.

4 2002/2003 CAPITAL PROGRAMME

4.1 A revised capital programme of £31.02 million was approved by the Council Executive at the 4^th September meeting. Further revisions have now been incorporated into the programme giving a latest revised total of £32.5 million:

· Social Services - a Supplementary Credit Approval of £74,784 for mental health information technology has been approved. Also government grant of £91,000 has been allocated for Information Management.

· Education - Targeted Capital Funding of £4,624,236 has been awarded for the Radstock Schools Renaissance project. The funding is in the form of Supplementary Credit Approval, which is to be allocated over a period of three years. A preliminary allocation of £850,000 has been approved for 2002/03.

· Education - has been allocated a total of £433,000 additional Standards Fund Grant, made up of £221,000 to be devolved to schools, £52,000 for Nursery places, £125,000 additional NDS Condition grant and £35,000 for schools security. In addition the Supplementary Credit Approval for NDS Modernisation has been increased by £47,000 to a total of £509,000.

· Approval was given at the 4^th September meeting to include £20,000 for an investigation into structural problems at Pulteney weir, funded from the base capital contingency budget. The consultant's report has been received and the required funding for the remedial works will have to be considered within next year's financial planning process.

· Approval was given at the September 2001 Resources Co-ordination Committee meeting to fund Property Services acquisition of Asset Management computer software at a cost of £35,000. This will be funded from the base capital contingency budget.

4.2 Details of the current programme are given in Appendix 1.

4.3 Expenditure to 30th September totalled £9.34 million. This includes expenditure of £1.12 on the Stone Mines project and £309,000 on Norton Radstock SRB scheme, which will be grant funded. Excluding this, expenditure was £7.911million compared to a profile spend of £7.219million.

4.4 Expenditure on the capital programme does not occur evenly throughout the year. A profiled cashflow statement has therefore been produced. Details are given in Appendix 2.

4.5 The cost control procedures on the Bath Spa Project have identified the need for change orders which now forecasts exhausting the project contingency. The Project Financial Statement identifies an estimated draw down from the Council's Risk Management Reserve of £200k. Appendix 3 provides further detail. A full review of the risk analysis is currently being undertaken and the recommended draw down will be incorporated into the draft Financial Plan to be reported to the Executive and to Council in January.

5 RESOURCES

5.1 Details of revised resources are as follows:

5.2 The table shows overprogramming of £1.3million in the 2002/2003 programme. This is incorporated into the anticipated slippage to future years.

APPENDIX 1 2002/2003 CAPITAL PROGRAMME

* Economic Development - In addition to the above, £309,000 has been spent on Norton Radstock SRB, which is grant funded.

** Spa Scheme - expenditure currently shows £2.05m. This has been adjusted for cashflow purposes to £555,000 to take account of the Millennium Commission grant of £1.5m, which is anticipated shortly.

*** Stone Mines - In addition to the above Council funded budget, £1.12m has been spent which is grant funded.

APPENDIX 3 - BATH SPA PROJECT

Following the announcement by the Contractor of a further delay in their anticipated Practical Completion Date, the Project Team has been reviewing the potential additional costs resulting from the anticipated delay. Whilst there are still significant uncertainties surrounding these issues, it has been considered prudent to make a provision for the potential cost in the Project Financial Statement.

Currently there is a £2m contingency and £2m risk allowance.

To date the contingency has been used to budget for the `average' risks and the risk allowance for the `maximum' risk.

The current project expenditure estimate has been revised to account for the delays above, taking into account:

1. The cost of the anticipated loss and expense claim, based on the current extension of time, including any further substantiated extension of time claims, of which a risk remains, albeit small.

2. The additional project team and design team costs.

3. Other minor project related costs.

The Project Financial Statement currently estimates a required draw down from the Council's Risk Management Reserve of £200k to cover the current assessment of `average' risk.

Detailed high level discussions are ongoing with the contractor. A full review of the risk analysis is being undertaken on the basis of those discussions. The recommended draw down from the Council's Risk Management Reserve will be incorporated into the draft Financial Plan to be reported to the Executive and to Council in January.

There remains a risk that further draw down will be required from the risk allowance.

The cost estimate of the maximum risk is being assessed and will be reported to the Risk Scrutiny Panel.