Agenda item

The report presented the year end position for the Authority’s capital programme including how this had been financed and the impact of slippage from the 2020/21 capital programme into the 2021/22 programme. 

At the March meeting the revised capital budget was approved at £2.0m following a re-assessment of potential slippage from the approved 2020/21 programme into the next financial year; reflecting forecast timing of spend.  It was noted that since then 2 areas of work had progressed further in 2020/21 than originally expected, these were:

·         The STC workshop building works - progress was valued on 31 March at £1.7m, £0.6m more than the earlier forecast had predicted – therefore £0.6m had been moved back from 2021/22 budget into 2020/21.  The overall contract sum remained the same, this was purely a timing issue which demonstrated the difficulties in accurately forecasting the phasing of large capital projects which spanned financial years;

·         £15k of reserve appliance equipment was received in March which had been anticipated in April 2021.

As a result of these £0.6m of the slippage had been reversed, increasing the 2020/21 capital programme with a corresponding reduction in the 2021/22 programme.  This change left the final capital programme for 2020/21 at £2.665m. Total capital expenditure for the year was £2.654m, reflecting £21k of slippage and an overspend of £10k, as set out in the report as now considered, and in appendix 1.

Prudential Indicators 2020/21

Under the prudential framework the Authority was required to identify various indicators to determine whether the capital programme was affordable, prudent and sustainable.

The revised indicators, after allowing for the various changes to the capital programme, were set out in the report alongside the actual outturn figures which confirmed that performance had been within approved limits.

The Impact of Slippage from the 2020/21 Capital Programme into the 2021/22 Programme

The original approved capital programme for 2021/22 was £11.3m. In addition to the timing adjustments for the STC workshop and reserve appliances the budget for North West Ambulance Service (NWAS) co-location works at Morecambe Fire station had been removed, following the mutual decision by NWAS and Lancashire Fire and Rescue Service not to proceed with the project.  As a result, the final proposed capital programme for 2021/22 was £10.5m, which was funded from capital grant, revenue contributions, and capital reserves. The revised programme and its funding were considered by Members as set out in appendix 2.  It was clear that due to the Covid-19 pandemic more slippage would occur during 2021/22 and the potential effect of this would be reviewed.  An updated position would be provided to Members at the next meeting.

The report set out revised prudential indicators for 2021/22-2023/24, showing that the revised programme remained affordable, prudent and sustainable.

Capital Reserves

The capital programme over the next 5 financial years would use all the capital reserves and receipts.

County Councillor Mirfin queried the life span, depreciation, and replacement planning for fire appliances.  In response, the Director of Corporate Services advised that the vehicle life span varied by vehicle and usage however the approved live for a service vehicle was 6 years, a fire appliance was 12 years, and an aerial ladder platform had a life of 15 years with depreciation written off over the approved life span.

Councillor Williams added that most appliances had a second-hand value.  The Director of Corporate Services confirmed that older vehicles were used at the Service Training Centre and that 2 main options for disposal were at auction or through Operation Florian (a UK Fire Service Humanitarian charity) which shipped vehicles abroad to other countries struggling for equipment.

County Councillor O’Toole commented that new vehicles went to stations where usage was high and older vehicles then moved to another station with not as much usage. The Assistant Chief Fire Officer added that there was slight variance in purchase year on year but broadly speaking circa a twelfth of the fleet was replaced every year.  He advised that 7 new appliances had arrived in last 6 months which had all been allocated to busier stations ie: to cities, Preston, Lancaster and the large urbanisations; the previous appliances at those stations (would be 3 – 4 years old) and these would move to smaller urbanisations and quieter stations.  The optimum for the Fleet Manager was for a vehicle to leave the fleet before it lost its reliability.  Vehicles did move to Service Training Centre as part of the training fleet where reliability was less critical. 

RESOLVED: - That the Committee: -

i)     Noted the capital outturn position, the financing of capital expenditure 2020/21 and the prudential indicators; and

ii)    Approved the revised 2021/22 capital programme, and the financing of this and the prudential indicators.