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Council finances 2: what does the money get spent on? Part 1: capital

by Prue Bray on 13 November, 2018

Welcome to the second in this series that tries to explain the finances of Wokingham Borough Council!  So this time I am going to have a stab at starting to tell you about what the council spends its money on.  This is only about the spending – trying to deal with where it gets the money from as well would make this post waaaaay too long.

There are two sorts of spend  – revenue, which is all the stuff that recurs year after year, to keep services running – and capital – which is basically big projects and one-off spend.   If this was your own finances, buying a second hand car would be capital spend but the petrol to keep it running would be revenue.  This financial year – which runs 1st April 2018 to 31st March 2019 – Wokingham Borough Council budgeted for the following

  • £117,127,751  of revenue spending
  • £179,977,000 of capital spending

It also budgeted to spend £16,112,000 on its council houses, and £89,424,000 on its schools (that does not cover the academies or free schools in the area – their money goes straight to them).  The budgets for schools and council houses are separated out from the rest of the council spending and have separate income, so I am not going to deal with them now. It’s complicated enough without them!

All these figures come from something called the Medium Term Financial Plan, which is the document which is agreed by the council at the budget meeting each February.  You can see the current year’s MTFP on the council website at http://www.wokingham.gov.uk/council-and-meetings/open-data/plans-policies-and-strategies/?categoryesctl91f252ff-550d-4cfa-a838-92ef2cb5f83c=7742

Let’s start with the capital spending this time.

First, the £179.997 million – call it £180 million – is the total cost of all the capital projects for the year.  It doesn’t necessarily include all the things that were already happening for which the money had been itemised in previous years.  It also is very unlikely all to get delivered in the year.  Large chunks of it tend not to happen.  Some because projects are rescheduled, some because they overrun, some because they get delayed by external factors, some because they are multi-year projects and the profiling isn’t right, and so on.  The list of capital schemes in the MTFP has all the projects the council intends to deliver but the timing can vary and none of it is set in stone.  Some projects are multi-year, with the spend spread across up to 10 years.

Here is a sample of what this year’s list includes (I pass no comment on the desirability of the spending, or the appropriateness of the size of the budget):

  • affordable housing schemes
  • investment in the country parks
  • bridge strengthening
  • highways drainage
  • new IT systems for social care
  • the rebuild of Bulmershe leisure centre
  • parts of several new roads around Wokingham town
  • traffic signal upgrades
  • extensions to several primary schools
  • buying commercial property
  • various bits of Wokingham town centre regeneration

The smallest items on the list cost £19,000 each – buying IT equipment for children in care, strengthening the approach embankment for bridges (this is just a tiny fraction of the total cost, which falls into later years), and structural testing of street lighting columns.  The biggest item on the list comes in at £45 million – buying commercial property – followed by Wokingham town centre (£29.8 million this year) and then the new roads at £16.5 million.  In all 3 cases, this is only a fraction of the total cost.

You can see this covers a multitude of things, some of which you cannot get away without doing, like primary school extensions so that children have a school place, some of which are necessary infrastructure, like the new roads to try to relieve some of the traffic congestion that would otherwise ensue from all the housebuilding, and some of which are discretionary, like the country parks, which are nice to have for our residents and bring in an income.  And some are undoubtedly questionable, such as the eye watering sums being spent on Wokingham town centre.

For all the good it will do you, you can find out how they are getting on with this year’s capital programme by reading the Q2 capital monitoring report on October’s Executive agenda here https://wokingham.moderngov.co.uk/ieListDocuments.aspx?CId=129&MId=2840&Ver=4

It says  “The current approved Capital Budget for the year 1 is £134,011k.  It is now estimated that £135,502k will be spent this financial year. The remaining budget of £86,722k will be carried forward into 2019/20.”   If you can work out how any of those figures relate to the MTFP £179.977 million, or how the remaining budget relates to the approved budget you are better at this than I am.

To be quite frank, the way the capital programme is presented is incomprehensible.  You can see the new projects that are planned at the beginning of the year but not track their progress during the year.  Even if you could track the money, telling you 100% of it had been spent wouldn’t tell you whether you got 100% of whatever it was supposed to deliver…..

I am sure there are officers in the council who know how this is put together and I am also sure that if I ask to look at an individual project (except the town centre) I could track the money ok. Overspends and underspends will occur, but there is nothing nefarious going on.  However, put the whole lot together and it is an impenetratable mess.  I have 18 years of experience looking at it and I have been complaining about the lack of transparency for almost all that time.  I can’t quite decide whether it’s deliberate…

If you are interested in finding out exactly what is in the capital programme for this year and up to the next 10 years, have a look at the MTFP which is the first link I have given you.  The schemes are all laid out starting on page 68 (which is page 70 of the PDF).  Good luck – and if you have any questions, please ask!  And if you are a glutton for punishment, come back to find out about the revenue budget next time.

 

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