Agenda item

To set out the Capital Strategy for 2026/27 to 2030/31 and thereby the proposed 2026/27 capital programme, including identified capital investment priorities, together with the indicative capital programme for 2027/28 to 2030/31, having regard to the resources available over the life of the programme.

Cabinet Member for Finance, Corporate Services and Sustainability to report.

The Cabinet considered a report of the Director of Finance which set out the Capital Strategy for 2026/27 to 2030/31 and thereby the proposed 2026/27 capital programme, including identified capital investment priorities, together with the indicative capital programme for 2027/28 to 2030/31, having regard to the resources available over the life of the programme.

The Council’s Capital Strategy and capital programme awee set over a five-year timeframe. The proposed Capital Strategy and programme for 2026/27 to 2030/31 took the essential elements of the 2025/26 to 2029/30 and previous years’ strategies and programmes and moved them forward in the context of the financial and political environment for 2026/27. The Strategy did however include a longer-term vision, a forward look at those projects that were likely to run beyond the five-year strategy and programme period or be initiated subsequently. This covered a timeframe for the 10 years from 2031/32 to 2040/41.

The format of the Capital Strategy reflected the requirements of the Prudential and Treasury Management Codes issued by the Chartered Institute of Public Finance and Accountancy (CIPFA). The Capital Strategy was presented at Appendix 1, to the report. Annex C of Appendix 1, to the report, established the proposed capital expenditure and financing for the period covered by the Capital Strategy, 2026/27 to 2030/31. The Council had set out its capital programme for the period 2026/27 to 2030/31 based on the principles of the Capital Strategy.

The Capital Programme and Capital Strategy were influenced by the level of resources available. The level of prudential borrowing included reflected the financing available in the revenue budget, capital receipts align with forecasts, and grant funding and other contributions are based on already notified allocations or best estimates.

The capital programme for the period 2026/27 to 2030/31 included additional Transport schemes funded by Grant (£16.630m), additional Disabled Facilities Grant (£2.908m), additional Council funded investment in Transport specifically for Potholes (£2.000m) and additional resource for Emerging Priorities (£1.592m), both funded by Prudential Borrowing and an increase in The Use of Flexible Capital Receipts of £2.600m until its expiry of the direction in 2030, financed from Capital Receipts. The revised capital programme includes proposed expenditure for 2026/27 of £102.464m, of which the largest category is £72.953m of expenditure on regeneration, schools, transport and infrastructure projects within the Place Directorate. Total expenditure decreases to £49.047m, £14.923m, £ 5.972m and £1.592m in 2027/28, 2028/29, 2029/30 and 2030/31 respectively. The Strategy also advised that the Council was proposing to continue the use the flexibility provided by the Government to use capital receipts to fund the revenue cost of transformation.

In terms of the Capital Programme, the 2025/26-month 9 capital monitoring position presented alongside this report included expenditure projections that were a key determinant of the 2026/27 programme. The projected outturn spending position for 2025/26 was £70.200m being financed by: Grants and Other Contributions of £41.193m, Prudential Borrowing £23.983m, Capital Receipts of £4.714m and a slight revenue contribution of £0.310m. The actual expenditure to 31^st December 2025 was £40.189m (57.25%) of the forecast outturn. The position will be kept under review and budgets would continue to be managed in accordance with forecasts.

In preparing the submitted report, there had been consultation with the members of the Capital Investment Programme Board, the Council’s Leadership and Senior Management team on the proposed Capital Strategy and Capital Programme for 2026/27 to 2030/31, which was also presented to and considered by the Governance, Strategy and Resources Scrutiny Board at its meeting on 28^th January 2026, which in itself represented a key element of the consultation process. The Scrutiny Board were content to commend the report to Cabinet. Any comments from Cabinet will be incorporated into the report presented to the Council on 4^th March 2026.

Options/Alternatives considered:

Option one (preferred Option) – to accept the proposed recommendations of Capital Strategy and Capital Programme for 2026/27 to 2030/31, Flexible Use of Capital Receipts Policy, Treasury Management Indicators, and MRP policy, as detailed in the submitted report.

Option two – to suggest an alternative approach to capital investment for 2026/27 to 2030/31, including the revision of capital priority areas.

Resolved:

1.    That the Capital Strategy for 2026/27 to 2030/31, detailed at Appendix 1 of the submitted report, be endorsed and commended to the Council on 4^th March 2026. 

2.    That the Capital Programme for 2026/27 and indicative programmes for 2027/28 to 2029/30 at Annex C of Appendix 1 and summarised at sections 2.2 to 2.5 of the submitted report, be endorsed and commended to the Council on 4^th March 2026. 

3.    That the Flexible Use of Capital Receipts Strategy as presented at Annex D of Appendix 1, to the submitted report, be endorsed and commended to the Council on 4^th March 2026. 

4.    That the Minimum Revenue Provision (MRP) Policy Statement 2026/27 and method of calculation and Prudential Indicators, detailed in Appendix 2 to the submitted report, be endorsed and commended to the Council on 4^th March 2026.