Agenda item

To approve that the Capital Programme for Borough Economy is increased by £3,146,520 for 2022/23 to fund the programme of work needed to stabilise the condition of highway infrastructure.

Agreed:-

(1)     that the Capital Programme for Borough Economy is increased by £3,146,520 for 2022/23 to fully fund the programme of work needed to stabilise the condition of highway infrastructure and mitigate the effects of the next severe winter taking into account inflation in 2022/23;

(2)     that a surplus of £1,000,000 of capital funding currently allocated to Friar Park from the Regeneration and Growth Capital Project Support Reserve be transferred to Borough Economy to offset the capital requirement recommended in 1.1;

(3)     that the residual capital requirement for 2022/23, after the use of Friar Park Capital, of £2,146,520 is funded from Corporate Main Programme resources with any prudential borrowing finance charges addressed within the Medium Term Financial Plan;

(4)     that the Capital Programme for Borough Economy is increased by £5,435,880 for 2023/24 to stabilise the red risk condition of highway infrastructure, taking into account inflation and to mitigate the effects of the next severe winter in accordance with the Highway Infrastructure Asset Management Policy, Strategy and Plan;

(5)     that the capital requirement for 2023/24 of £5,435,880 is funded from Corporate Main Programme resources with any prudential borrowing finance charges addressed within the Medium Term Financial Plan;

(6)     that a further report to update Cabinet is submitted in September 2023 after the Highway Infrastructure condition is reviewed in summer 2023 to identify future budget requirements from 2024/25 onwards for the risk assessed replacement of red risk Highway Infrastructure when the inflation outlook has stabilised and when the effects of the 2022/23 winter have been determined.

Approval was sought to increase the Capital Programme for Borough Economy to fully fund the programme of work needed to stabilise the condition of highway infrastructure and mitigate the effects of the next severe winter whilst also taking into account inflation.

The Vice-Chair of the Economy, Skills, Transport and Environment Scrutiny Board sought clarification from the Cabinet Member of Environment for the reasons for the increase in construction prices.

It was noted that Economic commentators report that inflation was influenced by international trends in energy prices, oil prices, fuel prices, supply chain problems and a strong labour market. These were a consequence of post pandemic supply and demand imbalances made significantly worse by the war in Ukraine.

Reasons for recommendations

Capital requirement of £3,146,520 in 2022/23 is required to fully fund the programme of work needed to stabilise the condition of highway infrastructure and mitigate the effects of the next severe winter taking into account inflation in 2022/23.

Alternative options considered

Provide no Council Capital to close the funding gap from 2022/23. An alternative would be to limit the repair of high-risk infrastructure to a value that matches the £4.741m CRSTS maintenance block grant. There would consequently be no Council capital provision available to fund the gap in the cost of replacement of high-risk life expired highway

infrastructure. The programme of urgent work for 2022/23 would not be completed and a similar urgent programme for 2023/24 would only 40% completed. This is not recommended because the red risk backlog is escalating.

Agreed:-

(1)          that the Capital Programme for Borough Economy is increased by £3,146,520 for 2022/23 to fully fund the programme of work needed to stabilise the condition of highway infrastructure and mitigate the effects of the next severe winter taking into account inflation in 2022/23;

(2)          that a surplus of £1,000,000 of capital funding currently allocated to Friar Park from the Regeneration and Growth Capital Project Support Reserve be transferred to Borough Economy to offset the capital requirement as set out in Resolution (1) above;

(3)          that the residual capital requirement for 2022/23, after the use of Friar Park Capital, of £2,146,520 is funded from Corporate Main Programme resources with any prudential borrowing finance charges addressed within the Medium Term Financial Plan;

(4)          that the Capital Programme for Borough Economy is increased by £5,435,880 for 2023/24 to stabilise the red risk condition of highway infrastructure, taking into account inflation and to mitigate the effects of the next severe winter in accordance with the Highway Infrastructure Asset Management Policy, Strategy and Plan;

(5)          that the capital requirement for 2023/24 of £5,435,880 is funded from Corporate Main Programme resources with any prudential borrowing finance charges addressed within the Medium Term Financial Plan;

(6)          that a further report to update Cabinet is submitted in September 2023 after the Highway Infrastructure condition is reviewed in summer 2023 to identify future budget requirements from 2024/25 onwards for the risk assessed replacement of red risk Highway Infrastructure when the inflation outlook has stabilised and when the effects of the 2022/23 winter have been determined.