18 May 2005
Financial Issues Report
City Treasurer, Chief Executive’s Office Report by:
Ward Implications: All
Summary (and Community Implications) 1.
1.1 This report sets out new capital schemes that have been identified since the
Financial Issues Report in April and changes to the capital programme since
it was last reported.
The report also seeks approval for a loan of ?870,000 to the Theatre Royal,
funded by Prudential Borrowing. The loan will be repaid by a first call on
existing City Council Revenue support to the Theatre.
The new capital schemes will bring a wide range of community benefits.
2.1 Approve the inclusion of new schemes and changes to existing schemes into
the capital programme as outlined in Appendix A; 2.2 Approve the buy out of the lease at High Friars, Eldon Square, for the sum of
?34,000 - to be financed by a loan from the Corporate Resource Pool, as set
out in paragraph 3.2
2.3 Approve a loan of ?870,000 to the Theatre Royal, as set out in paragraph
3.3. The loan is to be taken over up to 25 years and will be financed through
Prudential Borrowing. Repayments will be met from existing City Council
Revenue support to the Theatre.
2.4 Note the item on the allocation of Area Committee budgets at paragraph 3.4
for information only.
Financial Issues 3.
Capital Programme variations 3.1
3.1.1 Appendix A summarises a range of amendments, which if approved would
result in a net increase in the 2005-06 programme of ?9.714m. 3.1.2 The key changes are:
Education & Libraries – An amount of ?1.159m is included for the extension
to the Galafield Play and Community Facility to build a Children’s Centre with
49 full day care places. The scheme is funded by SureStart Newbiggin Hall
Local Programme and SureStart Children’s Centre programme.
YHN – Schemes totalling ?5.974m have slipped from 2004-05. This was
partly offset by re-phasing back into 2004-05 of ?0.678m. Schemes have
also slipped into 2006-07 totalling ?1.629m.
New schemes amounting to ?1.196m are to be financed from borrowing,
including ALMO resources.
Social Services – Schemes totalling ?1.220m have slipped from 2004-05.
City Service - Schemes totalling ?2.696m have slipped from 2004-05.
The slippage in the programme will not result in any loss of funding.
Eldon Square High Friars Unit 3.2
3.2.1 Capital Shopping Centres are recommending that the Partners pay a capital
premium of ?85,000 (the Council’s 40% share being ?34,000) to obtain the
surrender of a lease at High Friars. The unit would then be let for 15 years to
the adjoining tenant at a combined rental of ?260,000 per annum (?81,000
higher than the existing two base rentals of ?179,000). The council would
receive ?104,000 per annum as equity rent.
3.2.2 The council share of the capital premium would be funded by CRP Loan.
Theatre Royal development, 5-7 Market Street 3.3
3.3.1 Phase A of the development of 5-7 Market Street will consist of works to the
basement, ground and first floors in order to upgrade stage and technical
facilities, relocate the theatre’s Booking Office and expand the catering and
3.3.2 Total project costs are budgeted at ?4.2m. The scheme will be funded
through a portfolio of public funds, donated funds, Theatre Royal funds,
Newcastle City Council and borrowed funds.
3.3.3 In March 2005 Executive agreed a grant of ?250,000 from the Corporate
Resource Pool towards the scheme. Executive is now requested to agree to
a loan of ?870,000 for a period of up to 25 years. 3.3.4 The loan would be financed through Prudential Borrowing. Interest is to be
charged at 4.6%.
3.3.5 The loan repayments will be the first call on the annual revenue grant
provided by the City Council to the Theatre. However, there could be
flexibility to allow earlier repayment should the Theatre wish to do so.
Area Committee Budgets 2005-06 3.4
35,594 Gosforth/North Newcastle
36,192 Inner East
61,780 Inner West
35,184 North Central
58,900 Outer East
53,920 Outer West
3.4.1 Executive is requested to note this item for information only. Further details
of balances brought forward from 2004-05 will be reported to individual Area
Corporate Implications 4.
4.1.1 The City Treasurer has been consulted and he is satisfied that all financial
implications as set out in this report have been considered.
Environmental and Sustainability 4.2
4.2.1 In designing and implementing capital schemes, individual directorates will
ensure that they are in line with the Council’s strategic objectives on the
environment and sustainability.
Risk Implications 4.3
4.3.1 Risks for individual capital projects will by managed by the responsible
What Happens Next 5.
5.1 The capital projects outlined in the report will be implemented though normal
procurement arrangements. Spending will be reflected in future capital
programme monitoring reports.
Further Information 6.
6.1 Background Papers held by Capital and Investment Team in room 15