Agenda item

The Cabinet Member for Corporate Services introduced the report and stated that the strategy was part of the budget process, and that there is a link between the capital and revenue budgets. It was highlighted that there were multiple variables in the Capital Programme due to inflation, the planning process and that the limit to borrowing costs was recommended to increase to £369 million during the programme. The recommendation to delegate authority to the Director of Finance, Resources and Business Improvement to approve the budget for the Biodiversity and Climate Change project relating to Maidstone House and the Link was emphasisedas improving the viability of the building for future tenants.

During the discussion, reference was made to the relationship between the capital and revenue budgets, and borrowing costs.

In response to questions raised:

The Director of Finance, Resources and Business Improvement stated that:

·  Utilising borrowing for the revenue budget would only be used if there was no alternative, as the Council would have to fund capital expenditure with borrowing in future.

·  The capital budget for Lockmeadow was intended for the refurbishment of units when tenancies expired and to attract new tenants. The vacant unit at the former Feathers Bar and Grill was highlighted as an example of a unit that required capital funding to incentivise future tenants. The Council had leases with tenants scheduled to expire in the 2030s and there was a sustainable income stream. It was emphasised that Lockmeadow was still a valuable asset to the Council attracting residents to the town centre.

·  The £195,000 allocated to Medway Street Car Park in the Capital Programme included combining an adjoining car park with the Council operated car park.

·  Capital Works at Maidstone House included a complete renovation of the ventilation system, exterior cladding and improvements set out by the Council’s biodiversity and climate change action plan. £800,000 was also allocated to the 4^th floor of the building which required maintenance to attract future tenants to the vacancy.

·  Public toilet refurbishment works could be funded either through revenue expenditure if it was for reinstating facilities, or capital expenditure if it was for enhancement of facilities. Any refurbishment of public toilets would form part of the Council’s asset management plan, but priority would be made for repairs and maintenance.

·  Several small scale schemes had been implemented as part of the Flood Action Plan, including collaborating with the Environment Agency.

·  It was recognised that development at Leeds Langley was not allocated in the proposed Local Plan, but the £1 million allocated in the Capital Programme for preliminary costs on the scheme was intended to fund amongst other things a development plan for the area.

·  The Council was committed to borrow £80 million over the next three years, which the Council was likely to spend, but that it was earning interest to the extent it had not been spent on capital projects.

The Cabinet Member for Corporate Services stated that:

·  Other borough authorities had utilised borrowing for revenue budgets but the Council was very cautious with its capital and would only use it sparingly.

·  The cost of borrowing estimated at £15 million in the five year period could change depending on various factors, including planning permission, investment appraisal and changing programmes.

·  Flood mitigation measures required partnerships with external stakeholders, including Kent County Council and drainage boards.

RESOLVED to RECOMMEND to CABINET: That it

1.  Agrees the capital strategy principles set out in paragraph 2.10 to this report;

2.  Agrees the capital funding projection set out in Appendix 2 to this report;

3.  Agrees the capital programme 2024/25 onwards as set out in Appendix 3 to this report;

4.  Note that in agreeing recommendations 2 and 3 above the Committee will set a prudential borrowing limit of £369.1 million over the period of the programme which will be recommended to Council as part of the Treasury Management Strategy 2024/25; and

5.  Gives delegated authority to the Director of Finance, Resources and Business Improvement, in consultation with the Leader of the Council, to review and give approval to the business case and related budget approval for the Biodiversity & Climate Change project related to the Maidstone House and Link as set out in paragraph 2.7 to this report.