Capital and Investment Strategy 2022 to 2023

3.1
On 9th October 2019, HM Treasury increased Public Works Loan Board (PWLB) rates by 1% on the back of concerns that Local Authorities were borrowing from the PWLB in order to invest in commercial investments (retail, offices, industrial parks etc) purely for a yield on that investment.

3.2
The 1% increase was reversed on 26th November 2020 following the end of the HM Treasury consultation on PWLB, but with new restrictions on borrowing to ensure that councils are not buying investment assets (land or buildings) primarily for a yield. The Council should not have any proposals to invest primarily for yield in its Capital Programme over a 3-year period, nor can it finance such investments from other sources as an alternative to PWLB borrowing, otherwise the Council will have to pay back any PWLB borrowing taken out during the year and may be prevented from accessing PWLB in the future.

3.3
The key objectives of capital investment during this strategy period will be to:

• Support service delivery in line with the Council’s strategic objectives. The challenge of Covid has led to an acceleration in innovation and the improvement of customer service using digital channels. This will continue to be a key feature during the Better Buckinghamshire service reviews and the focus on continuous improvement following the reviews will enable best practice and new technologies to be adopted where appropriate.

• Support regeneration, economic development, housing delivery and the wider growth agenda, especially given the impact of the Covid pandemic on the local economy and residents of Buckinghamshire. The scale of ambition is best illustrated in the Recovery and Growth Deal for Buckinghamshire submission “Succeeding as a Place, Succeeding as a Country: A scalable Buckinghamshire proposition to accelerate UK recovery”, which was developed in conjunction with our public and private sector partners. Ensuring that there are sufficient school places to meet the demand created by substantial population growth and help to build on the excellent quality of education in Buckinghamshire is a key requirement. The regeneration of towns in Buckinghamshire and the delivery of affordable housing is also a key priority for the Council.

• Implementation of the Climate Change and Air Quality Strategy. The Council has a target to achieve its net zero-carbon target by 2050 at the latest. It will achieve this through various measures such as building rationalisation, building and streetlight energy efficiency, boiler replacements, using electric/low carbon vehicles (including refuse vehicles), solar car ports and tree planting.

• Supporting local communities. The condition of our highways and footpaths is consistently a priority for our residents and the ease of movement around Buckinghamshire is important for social connectivity and integration, outdoor leisure, such as walking and cycling, as well as the local economy. The Covid pandemic has brought into sharper focus the importance of leisure activities, especially in outdoor settings, with new users being introduced to our parks and public footpaths and as well as taking up cycling on our road network. There is an opportunity to help many of our residents to maintain their increased level of activity by making sure that accessible indoor leisure facilities are available as part of the post-Covid recovery. There will also be pent up demand for cultural activities that have been subject to heavy restrictions during the pandemic.

• Supporting healthy and independent lives. With an expected 40% increase in the 60+ population and a 147% increase in the 90+ population in Buckinghamshire by 2038, the Council is looking to deliver a portfolio of assets that is sufficient to meet current need and requirements for at least the next 10 years. Achieving this objective will also involve moving away from ‘building based’ provision and promoting independent living for longer amongst all client groups, resulting in more care in the community. The ongoing development of the strategy for the use of Disabled Facility Grants as part of the Improved Better Care Fund will be instrumental in this. At the same time the Council will promote the development of locally based provision and local choice to reduce the need for out of county placements.

• Facilitate the generation of income, be that from existing commercial assets held predominantly for their rental yield, service-based assets capable of generating income as a by-product or the repurposing of existing assets to deliver the Council’s strategic objectives and where an income stream is deliverable as a by-product of that investment.

• Enhance value for money by helping to reduce or avoid costs. The Council has a comprehensive Better Buckinghamshire Reset and Recovery programme, which is looking to review all service areas to ensure the new council has a strong customer and outcome focus. This will partly involve learning from the improvement lessons from the Covid-19 response, as well as utilising technology to help deliver those service improvements and process efficiencies.

3.4
As well as the key objectives set out in 3.3 above there will also be regard for the following:

• Meeting legislative requirements, such as school place planning requirements, or health and safety, and the Social Value Act 2013.
• Maximise community benefits, working in partnership with other agencies.
• Ensure that investments are affordable and sustainable.
• Safeguard the on-going integrity of existing assets (property, highways, ICT, etc.) ensuring they remain fit for purpose, including reducing the maintenance backlog.
• Be forward looking in terms of investing in future technologies and recognising societal behaviour patterns and not the ways of the past.
• Ensure that investments are in line with the relevant approved strategies (i.e. Strategic Asset Management Plan, the Highways Asset Management Plan etc).

3.5
Where assets are held by the Council that do not fall into the above categories the Council will aim to dispose of such assets. However, it will seek to maximise the return in doing so and therefore will on occasions hold assets awaiting favourable market conditions. The retention of assets in this way will require an explicit decision to do so.

3.6
Based on the above objectives it is envisaged that capital investment will fall into four main categories:

• Assets owned by the Council to support the direct delivery of services by the Council itself.
• Assets owned by the Council to support the delivery of services by third parties where there is a strategic need/advantage in continuing to own the assets.
• Assets held for the purposes of regeneration or economic development.
• Assets held for a financial return to support the financial resilience of the Council.

3.7
In addition the Council may on occasions make capital investments in assets owned by third parties, where doing so facilitates the delivery of Council objectives, or legislative requirements.

3.8
Due to the scale of the Council’s investment programme the Buckinghamshire Strategic Infrastructure Tool is being developed to provide an overview of all the strategic investment projects being undertaken to make sure all synergies and dependencies are identified. It works as a prioritisation tool so that no service areas are overcommitted from a resourcing perspective and funding gaps for infrastructure can be identified and addressed effectively.