Agenda item

1.            Mr Oakford introduced the report and advised that the impact of inflation on a range of services was being assessed. The increase in the price of building materials would increase the price of planned work, possibly more than once in the duration of a project, as well as the time taken to complete the work. He advised that the County Council was unable to borrow to cover these increased costs so needed to build in measures to manage the impact. Disposal of assets could raise some funds to offset costs but assets could only be sold once. Mr Oakford responded to comments and questions from the committee, including the following:-

a)    the clarity and content of the report were welcomed;

b)    asked if the delegation set out in the third recommendation in the report would include the Deputy Leader and Cabinet Member for Finance, Corporate and Traded Services, as well as the directors listed, Mr Oakford confirmed that it would and suggested that the wording be changed to include this, as has been done in the past with similar decisions. This change was welcomed.  Mr Oakford confirmed that the proposed decision did not constitute any change to the normal way of working;

c)    asked about the possibility of re-phasing or delaying some works, and if this would help manage costs, Mr Oakford advised that, for some projects, for example, school building, re-phasing was not a an option  as the Council had a duty to provide sufficient school places for every child in time for the next school year, and temporary classroom accommodation as a short-term solution was not popular;

d)    concern was expressed that school projects should not involve any more expense than was necessary to provide the requisite school places; and

e)    asked how Members would be kept informed of which highways schemes might be delayed as a result of inflationary impact, and if Members would have the opportunity to call them in before final decisions were made, Mr Oakford advised that no change to the usual key decision-making process, including the call-in process, would be made. Some decisions previously taken, relating to projects and works which were yet to start, may have to be reviewed as their costs would inevitably increase, and some decisions previously falling below the threshold for a key decision would now increase in value and require a key decision to be taken.  A report of all decisions affected in this way, including those falling just below the threshold, would be presented to a future meeting of the committee. 

2.            It was RESOLVED that the decision proposed to be taken by the Deputy Leader and Cabinet Member for Finance, Corporate and Traded Services, to:-

a)    note the £28.8 million estimated impact on capital budget spend in the Medium-Term Financial Plan of £339.3 million across the capital programme for 2022-23. Schemes already approved via a key decision, or covered by appropriate delegated authority, would be funded from the options identified in paragraph 5.9 of the report;

b)    consider the use of Fluctuation clauses, when deemed necessary, to control costs to the County Council and alleviate adverse effects to the main contractor supplier of the rise in material costs; and

c)    delegate authority to the Director of Infrastructure, or, for Highway Schemes, the Corporate Director of Growth, Environment and Transport, in consultation with the Deputy Leader and Cabinet Member for Finance, Corporate and Traded Services and the Corporate Director of Finance, to take the necessary actions, including, but not limited to, entering into contracts and other necessary documentation to enable the delivery of the capital programme, taking into account construction and inflation, where existing Record of Decisions levels needed to be adjusted,

be endorsed; and

d)      a report of all decisions previously falling below the threshold for a key decision, which would now increase in value and require a key decision, be presented to a future meeting of the committee.