Agenda item

To receive information from Officers in relation to this scrutiny topic (papers to follow).

The Committee received a presentation outlining the governance structure of the Capital Programme, which included:

• The “macro” decision making governance structure. It was noted that for every project there was a project group made up of a project manager, officers from finance, legal, and procurement, and other relevant officers. These reported to the relevant working group which were chaired by Assistance Directors and oversaw progress. The working groups reported to the Placemaking (Regeneration) Mission Board (PMB) who held responsibility for the capital programme. The PMB progressed projects to Corporate Management Team (CMT), Powering our Futures Board (POF), and Cabinet/Council for formal approval.
• The “micro” capital projects lifecycle and governance process which was a five-stage process from Foundation and Discovery through to Design, Delivery and Review. There were gateways at each of the stages to approve progression to the next stage, monitor delivery, and highlight closure/benefits. Funding was addressed at each of these gateways. Every scheme had to be fully funded before a project could progress to the next stage.

The Committee questioned member engagement within the process and were informed that the type of member engagement was dependent on the project. Ward members were consulted when appropriate for Ward specific schemes and when there were boards for a project, e.g. the Thornaby Town Deal, member were represented on that board. For all projects there was regular dialogue with the relevant Cabinet member and, where appropriate, with the Leader and Deputy Leader. Members further questioned how they were informed of changes to the Capital Programme. Officers explained that following the Programme being agreed as part of the Medium Term Financial Plan (MTFP) Budget Report in February, Members received quarterly MTFP updates to note which contained any changes to the Programme. 

It was questioned how projects were identified for the Capital Programme. Officers noted the projects could be identified through consultation with members and/or the public, as a response to a specific issue, or through funding opportunities that arose. Officers explained that benefits of a project were defined at the Foundation and Discovery stages, monitored throughout the stages, and the effectiveness of the project reviewed at the final stage.

Members raised the funding of projects via Section 106 agreements, questioning how it was ensured that the projects agreed were carried out. Officers noted that Section 106 projects were agreed to mitigate the impact of a development on the surrounding area and may include a condition that the project would take place once an agreed number of properties had been built, with contingency built in to the agreement for increasing costs of the project. Once that point had been reached it would be included in the Capital Programme and subject to the governance structure outlined.

Risks within a project was discussed. Projects could only be placed on the capital programme and move through the lifecycle and governance stages if the funding was identified. The Discovery stage established the expected costs of a project and potential risks, which could include inflation, supply chain, labour etc. However, other external issues could arise when onsite, which was at the Delivery stage. The Gateways at each stage identified if there were issues with the projects, including re-evaluating the cost of projects. Finance officers on the project groups highlighted any issues with budgets to the relevant boards throughout the project to determine if and how to source extra funding. A project may remain at a Discovery/Design stage until funding and/or capacity to complete it became available. There were also occasions where, due to the funding opportunities that arose e.g. the Thornaby Town Deal, the intention of the project and budget had to be set before the detail had been worked up which posed potential risks, and therefore a contingency and allowance for inflationary uplifts would be included to mitigate that uncertainty.

The Review stage was discussed, with Members questioning what happened to the closure report and lessons learned. Officers informed that these were shared with the PMB and filtered down to the relevant officers. Dependent on the nature of the closure report, other actions could be taken such as consulting the public. The Committee requested examples to be circulated for information.

The Committee were informed that the current governance structure for the capital programme had been developed inhouse and in place since 2024 following approval by Cabinet, with a Programme Management Office within Corporate Services supporting the structure. Since the structure had been in place there had been improvements made such as new forms introduced and there was a plan to procure a new software system. However, officers believed that time was needed for more projects to be completed via the governance structure before it could be fully evaluated for effectiveness.  

The breadth of the capital programme and capacity to deliver was discussed. There was a challenge to ensure the knowledge and skills were in place to support projects. The focus of the capital programme had changed over the decade, with different models for delivering projects being used, therefore there were different skills sets needed. Officers noted the need to develop staff and there was also investment in trainee accountants, graduate trainees, and apprenticeships where appropriate. In some areas where specific knowledge was needed external support from other organisations was sourced.  

AGREED that the presentation be noted.