Graham, Tom and Ian

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Stockport’s budget for 2015/16 – investment (capital) spending

by Lib Dem team on 22 February, 2015

A few years ago the day-to-day spending would have dwarfed  our investment spending, as it did for nearly all councils nearly all the time. We would spent hundreds of millions in revenue but only tens of millions in capital. That’s all changed in Stockport. Our revenue spending is falling with the government’s spending cuts, but the amount we’re investing in our borough is rising.

I cover the day-to-day (revenue) spending and other parts of the budget in separate articles.

For 2015/16 the day-to-day spending we have control over (our “cash limit” in the jargon) will come to £168 million. The amount we’re investing through capital spending will be more than £190 million, with plans to spend nearly half a billion pounds over the next few years. That’s a deliberate decision the ruling Lib Dem group have taken to use the opportunity of lower interest rates to start making a real difference to the infrastructure of the borough.

Capital spending is buying the car, revenue or day-to-day spending is running and maintaining it, and we’re buying more metaphorical cars than ever before.

Where does the money come from?

The total capital resources for 2015/16 is £190,603,000 (just over £190 million).

Of that:

  • £71 million comes from capital grants, mostly from the government. These are normally used where we want to do something that will improve Stockport but won’t necessarily bring in more money to the council – transport projects like the A6 to Manchester Airport Relief Road and the Town Centre Access Package are two examples.
  • £89 million comes from borrowing. The Council can borrow from the Public Works and Loans Board which offers a lower rate of interest than the banks. Of course, we have to repay those loans (plus interest) so we can’t just borrow for any old reason. Either the project has to give us a return on our investment that covers the cost of the repayments (e.g. Stockport Exchange) or it has to save money so we would have ended up paying as much through other costs (e.g. the road and pavement repair programme).
  • £7 million is from “capital receipts” – the name given to the money the council gets when it sells things. Most commonly, the council sells property it no longer uses.
  • £13 million comes from “revenue contributions” – the accountants taking money that’s originally earmarked for day-to-day spending and using it for one-off investment spending. We’re allowed to do that, but we’re not allowed to go the other way – we can’t take capital money and use it for day-to-day spending. Councils are forbidden from selling off the family silver and using it to fund the normal running of the authority.
  • £8 million comes from the Housing Revenue account, another pot of money in the council built up from the rent payments of people in social housing.
  • Some other smaller sources make up the remainder.

Where does the money go to?

A lot of capital investment projects run over several years, and depending on how the accounting has been done for a particular project it may only be part of that money that appears in our budget for 2015/16.

The main projects for 2015/16 are:

  • £3 million to invest in the council’s existing assets – major repairs for example.
  • £9 million as a loan to Stockport Homes to build their new HQ. The money will be paid back with interest, and the efficiencies Stockport Homes realise by moving into a modern office will pay for the scheme over time.
  • £5.5 million as a loan to Solutions SK to buy new vehicles, to be repaid.
  • £14 million investment in Stockport Exchange phase 2 – new public realm, hotel and offices on the old Grand Central site in front of Stockport Station.
  • £7 million to build a new leisure centre in Brinnington along with other investments in sport and leisure.
  • £21 million for the new Redrock development on the Bridgefield site in the town centre (a new cinema and restaurants plus many other improvements around that area).
  • £7 million to build new affordable and social housing
  • £12 million for the second year of the Lib Dem £100 million programme to properly resurface all the bad roads and pavements across Stockport.
  • £8 million for school expansion schemes.
  • A number of smaller projects make up the rest

You can find out more about the 2015/16 budget, and even have a go at setting a council budget yourself with our budget simulator, here.

   4 Comments

4 Responses

  1. Carolyn Minkes says:

    There seems to have been a weeny bit of resurfacing on Norwood Avenue but nothing on the other roads adjoining such as mine – Leyland Avenue. I am not the only person with difficulty walking and the pavements are a real hazard.

    • Iain Roberts says:

      Hi Carolyn,

      You’re right – it’s going to take some time to get round all the roads across Stockport. We want to get everything done as soon as possible.

  2. […] biggest two from our point of view are the council’s day-to-day spending (revenue) and our one-off investments […]

  3. […] cover the investment (capital spending) and other parts of the budget in separate […]

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