Agenda item

The Committee received a series of presentations outlining how capital projects, programmes, and interventions emerged and evolved, with a particular focus on transport, Thornaby Town Deal investment, and Ash Trees to illustrate the different types of programmes.

The Transport Capital Programme came from three main sources:

• The programme was primarily funded through the Tees Valley Combined Authority (TVCA), particularly the City Regions Sustainable Transport Settlement (CRSTS). Examples presented included both generic and standalone schemes. The allocation of the funding to different schemes across the Tees Valley was made by the TVCA Cabinet
• Other Government funding streams, which involved competitive bidding, were often time limited and had extensive monitoring requirements.
• Developer Funded Schemes, which were either Section 106 schemes where the developer paid a contribution or Section 278 schemes, which were fully funded Developer contributions were paid following completion of housing developments.

Members were presented with a case study, the Elton interchange scheme, which was identified in the adopted local plan as necessary to support housing growth in West Stockton. The Council secured £10M from the Housing Infrastructure Fund in 2018, later converted from a grant to a loan, with the funding agreement signed in late 2019. Planning permission was granted in February 2021 following public consultation. The scheme was delivered through the council’s project management processes with construction lasting approximately 18 months and affected by cost increases, utilities issues and other delivery challenges. The scheme was completed on site in December 2023, at a total cost of approximately £16m and was undergoing final safety checks with national highways.

Officers clarified that there was no net long-term cost to the Council, as repayment of the loan and further funding would be secured through development contributions as part of their planning permission.

Members questioned whether extra time for unknown factors was included the planning stages and were informed that potential delays were factored into project planning prior to delivery.

Members were also presented with the Thornaby Town Deal as a case study, which provided up to £25m of grant funding, subject to a minimum 20% local match funding. Stockton received £23.9m Members were informed that:

• The programme development followed a two-stage process, which included project identification and the production of HM Treasury compliant business case, validated through TVCA quality assurance mechanisms, and had prescribed governance structures and requirements.
• The budget and programme needed to be established before design, costs, surveys, and negotiations had taken place. This inevitably resulted in changes to scope, budget, and programme as more information emerged. Officers highlighted the challenge of balancing transparency and regular updates with the realities of evolving design requirements, commercial negotiations, and land acquisition.
• The importance of the local voice in shaping the project, as well as the high level of professional advice, was noted.

In response to member questions, officers confirmed that the significant match funding required at the bidding stage had been secured. Members noted that from the next year onwards, the Town Deal investment would be physically visible on the ground, reflecting the scale of delivery achieved. The programme was described as a significant success in terms of lobbying and securing investment for local priorities.

The final presentation included the LGA guidance definition of capital expenditure and a breakdown of grants and contributions, with the majority of contributions coming from Government departments and TVCA. The Ash Trees development was presented as a case study whereby two 10 place classrooms were located at Billingham South Primary School following consultation with key stakeholders. Members were advised that:

• School investments were primarily delivered through the Basic Need Grant (BNG) and High Needs Provision Capital Allocations (HNPCA), supplemented where appropriate by other capital funding sources such as developer contributions.
• Capital schemes were managed through established Council governance processes, with Cabinet approval, financial monitoring, and external grant reporting where required. The Council were required to respond to the Department of Education regarding how the BNG and HNPCA were spent on an ongoing basis

The Committee questioned how Section 106’s were determined and informed that this was negotiated between the Council and developers. It was further questioned whether the Council had any PFI commitments and informed that there was one commitment which was due to expire in 2028-2029 financial year, therefore PFI was not a significant factor on the capital projects programme. 

AGREED that the presentations be noted.