In accordance with the CIPFA 2017 codes for Prudential and Treasury Management, the Council was required to have a Capital Strategy (CS).  It was noted that the codes were being updated and therefore it might be necessary to amend the CS.

The draft CS was attached at Appendix A to the report and gave a high-level overview of how capital expenditure, capital financing and treasury management activities contributed to the provision of local public services, along with an overview of how associated risk was managed and the implications for future financial sustainability. The CS was intended to be a longer-term view of investment and go beyond the detailed five-year Capital Programme (CP) and would need to be updated occasionally to reflect delivery of the CP’s objectives.

The Council’s CP at Appendix B to the report totalled £132m, although £80m was unsecured funding.  A significant part of the CP related to the Council’s approved Property Investment Strategy (PIS) and loan funding to the Council’s company Alliance Homes (Rother) Ltd.  To date, approximately £20.6m had been expended or committed on 11 PIS properties/sites.  Income of approximately £1.1m was included within 2022/23 Revenue Budget for PIS assets that had been acquired.

The updated CP continued to minimise the use of Revenue Reserves to fund capital expenditure. For 2022/23, some £1.0m was planned to be used, but this reduced thereafter. Largely this would be replaced by low cost borrowing where appropriate which, whilst having a revenue impact, was spread over a longer time period.  Appendix B to the report showed the investment in approved schemes over the next five years and, also where schemes were part or fully funded.  Environmental aspects would be considered in all projects.

The draft CP showed that the Council aimed to make a significant commitment to invest in the district to improve it economically and socially, to ensure it remained an outstanding place to work and live in.

RECOMMENDED: That:

1)     the Draft Capital Strategy 2022/23 to 2026/27 be approved and adopted; and

2)     the updated Capital Programme 2021/22 to 2026/27 be approved.