Decision Maker: Executive

Outcome: For Determination

Is Key Decision?: Yes

Is Callable In?: Yes

Date of Decision: January 7, 2026

Purpose: The report considers the Capital Strategy for 2026/27, prior to its submission to the Council for approval.   Regulations require the Council to prepare and formally approve a Capital Strategy.  The document for 2026/27 is attached as Appendix A to this report for consideration by the Executive before being submitted to Council for approval.   The Capital Strategy gives a high-level overview of how capital expenditure, capital financing, asset management and treasury management activity contribute to the provision of services along with an overview of how associated risk is managed and the implications for future financial sustainability.   The Capital Strategy reflects individual projects that have been approved by the Executive in the year and the latest Corporate Strategy which was last reviewed in October 2025. The Corporate Strategy sets out the corporate priorities and prioritises corporate projects so that the Council’s limited resources are allocated to projects according to their importance, deliverability and continued relevance in the light of Local Government Reorganisation.  Corporate priorities requiring capital funding are highlighted throughout the Capital Strategy.   The main highlights in the Capital Strategy are:   i)       The 5-year programme contains capital expenditure of £87 million (compared to £85.9 million in the previous Strategy). £54 million of this relates to new affordable housing developments and improvements to existing stock. Other key schemes included are:   ·          Solent Airport and Daedalus projects ·          Vehicle Replacement Programme ·          Holly Hill Woodland Park Restoration ·          Hook Recreation Solar Farm   ii)      New schemes that are proposed since the 2025/26 Capital Strategy, which have not yet been presented to the Executive Committee for approval are listed at paragraph 32.   iii)     There is currently minimal provision in the programme for Town Centre Regeneration, the Civic Offices Asset Management Plan, infrastructure investment at Daedalus, the Environment Strategy or Fareham Park Vision which will be subject to separate future reports ensuring the funding approach aligns with the latest financial position and available resources.   iv)    The revised level of capital expenditure estimated for 2025/26 is £24.8 million (previously £28 million). The current estimate is that £4.6 million of the spend will be met by new borrowing which is below the Operational Borrowing Boundary set in the Strategy.   v)      The funding of the full 5-year Strategy relies on forecasts of resources that are not yet in place. These total £61 million (70% of the programme).   vi)    The capital programme includes £27.4 million of asset management plan improvements. However, there are a number of pressures highlighted in the Capital Strategy for asset management and replacement plans that are not currently included.   vii)   An assessment of the Council’s commercial investment property portfolio is included in the Strategy and shows gross income of £20.4 million since 2013 at an average yield of 6.1%.   viii)  The total of the Council’s investment property portfolio is estimated to have a value of £66.6 million.   A separate report proposing the Treasury Management Strategy and Investment Strategy for 2026/27 will be presented at the February meeting of the Executive.

Content: RESOLVED that the Executive:   (a)  endorses the draft Capital Strategy for 2026/27, attached as Appendix A to the report;   (b)  agrees the Capital Programme for the period 2025/26 to 2029/30, amounting to £87 million as set out in Annex 1 of the Capital Strategy; including one new scheme listed at paragraph 32 (Vehicle CCTV and Tracking Systems); and   (c)  submits the Capital Strategy for 2026/27 to Council for approval.