Capital Programme Review & Capital Need Assessment

The Assignment

Newham Council was striving to identify the medium to long-term capital needs of the Borough. Through undertaking an assessment of Newham’s total need for capital over the next 10 years they were aiming to establish a strategic and long-term view of capital investment requirements. By doing this, together with the introduction of a governance and decision-making framework to support future capital investment decisions, the Council wished to establish a more developed view of its capital expenditure requirements into the medium/longer term.

The Council appointed us to scope the Council’s capital needs over the next ten years, and to provide practical recommendations relating to governance and decision making that will enable a more strategic assessment of capital bids and more robust methodology to ensure that investment decisions are aligned with strategic priorities.

The Role

We were brought in to review the Council’s current capital programme budget setting process and the governance and decision-making approach being used to make investment decisions. As part of this review, we conducted a series of stakeholder interviews and designed a Self-Assessment Survey, using CIPFA guidance, to help understand the current governance arrangements and effectiveness of decision making and to identify any current barriers there were to developing a longer term capital programme.

Our approach to the review included two facilitated “check & challenge” workshops which were held part way through the commission. The “Check and Challenge” process was key to the proposed approach. It was used to provide a forum to explain the advantages and disadvantages of a range of decisions, approaches and issues as they are encountered. This process provides a consensus and rigour by allowing key stakeholders to challenge, confirm, debate and agree the best way forward. Out of this forum we identified areas of future capital need and from this developed a draft of the 10-year capital programme.

We developed a Strategic Assessment Toolkit has been developed that can be used as a decision-making framework for future capital investment decisions. This has included a set of revised governance proposals together with decision-making routes, Investment Bid Evaluation Criteria, a Funding Request Dashboard to help sift investment opportunities and identify those best aligned with strategic priorities and a Governance Process Flow Diagram to improve communication and understanding of the bid process for wider staff across the Council. As part of this role we have:

Undertook a series of stakeholder engagement interviews to understand what currently worked well and areas for improvement in relation to the current capital budget setting process
Developed a Self-Assessment Survey, using CIPFA guidance, to collect and assess the current performance of the council in relation to different areas of the capital programme
Led and supported the Council through two Check and Challenge Workshops to progress development of a 10-year capital programme
Developed a Strategic Assessment Toolkit as a set of tools to support decision making which included:
- Revised Governance
- Capital Programme Decision-Making Routes
- Bid evaluation criteria
- Funding Request Dashboard
- Changes to Scheme of Delegation
- Governance Process Flow Diagram
Prepared a detailed 10-year capital programme including spend profiling

Created a Financial Model to support the Council in using and updating their 10-year capital programme in the future.

Key Outcomes

Our work has supported the Council in scoping a future capital need assessment and from this, developing a 10-year capital programme that provides a longer-term and more strategic look ahead at capital need.
Our toolkit and the proposals we have made in relation to governance and decision making will support the council in streamlining and creating a more effective and consistent approach to investment decision making.