To consider the Capital Strategy, which will be presented to the City Executive Board on 12 February 2019. This report will be issued as a supplement to the agenda.

Aileen Carlisle, Senior Programme Manager, and Rocco Labellarte, Chief Technology and Information Officer, have also been invited to attend for this item, following a request from the Panel earlier in the year.

Bill Lewis, Financial Acccounting Manager, introduced the 2019/20 Capital Strategy. He explaind that the CIPFA 2017 Prudential Code introduced a requirement for Councils to prepare and approve a Capital Strategy, which includes consideration of non-Treasury investments such as investment properties and loans to other organisations. The Strategy had been reviewed to take account of this change.

The Council had a significant capital investment programme and had established a methodology for identifying, selecting and monitoring capital projects a few years ago. This methodology had recently been reviewed and was still being refined.

Aileen Carlisle, Senior Programme Manager, explained that from April 2019, all capital schemes and major projects would be assessed and filtered by a new Project Management Office (PMO) prior to being passed through to the Operational Delivery Group or the Development Board, and then through to Corporate Management Team. These projects included ICT schemes. The premise of introducing the PMO was to strengthen the feasibility and idea development stage of projects, to improve the later delivery of the schemes. A focus would also be placed on pricing and compliance in the early stage of project development. It was also explained that work was ongoing to strengthen the process around bids to Central Government.

The Panel noted that the PMO would include five new officer posts within the Council’s workforce, and that the scoring guidance for capital bids needed updating. The Senior Programme Manager said that changes were being considered to the scoring criteria, and these could be considered at the appropriate time by the Panel.

In response to questions from the Chair, Aileen Carlisle explained that at present, approximately 70% of spend on the capital programme was being achieved each year. However, with the advent of the new PMO, there would be a target of 80% delivery in 2019/20 and 90% in 2020/21. Councillors remarked that this was an area that was in need of improvement.

The Panel noted that approximately 85% of the Council’s property investments were in retail, and questioned the risks in light of recent high profile store closures nationally. Nigel Kennedy, Head of Financial Services, explained that measures would be taken in the near future to mitigate this risk. The Chair asked if time series data could be made available to the Panel on rent recovered from investment properties based on asset type (appendix 5 of the report).

In response to questions concerning ICT, Rocco Labellarte, Chief Technology and Information Officer, explained that ICT projects should be funded from capital. Accordingly, steps had been taken to improve accounting of project support as a capital, rather than revenue, commitment. Agency staff would be used more often to help with fluctuating project management demand in the Council’s ICT team. The Panel championed the notion of giving ICT staff the opportunity to innovate to see how else services could be supported through smarter ways of working. Rocco explained that £100k had been awarded to the Council through Central Government funding, as well as to 14 other local authorities, to fund research into new ways of working. A partner had recently been commissioned, and the Panel asked for more information on which organisation was awarded the contract.