Issue - meetings

(i)             to note the global external factors that are having a negative impact on capital and revenue costs, including the delivery of Capital programmes/projects in terms of their budget and delivery timelines;

(ii)           in light of these external cost and time pressures to instruct the Chief Officer - Capital to review the approved General Fund and Housing Capital   programmes/projects in terms of timeline delivery and financial viability and to consider the impact on service delivery as a result of revised delivery timelines.

The review will be informed by the following criteria;

·         Investment, why are we doing it / meeting outcomes

·         Economic, value for money

·         Commercial, procurement / delivery mechanism

·         Environmental, inclusive of Net Zero

In addition, cognisance will be taken of where each project currently sits within its full life cycle; i.e. is it at feasibility stage, design development or construction and whether there are any interdependencies;

(iii)          to instruct the Chief Officer - Capital to report the outcome of the review, following completion of recommendation 2.2, to the Council meeting on 24 August 2022, within the report being prepared by the Chief Executive on the Policy Statement “Working in Partnership for Aberdeen” and its impact on the Council’s Commissioning Intentions, Service Standards and Budgets for 2022/23;

(iv)          in advance of a report detailing the outcome of the review in (iii) above, to approve that the Director of Resources take a report to the Urgent Business Committee on any proposed reprofile of capital projects where supply chain volatility may lead to additional cost or revised timelines outwith the current project budget and budgeted contingency provisions;

(v)           to note that the Council will request an opinion from our external auditors on the impact of this from a value for money perspective;

(vi)          to note the mitigation actions to be adopted as detailed in paragraph 3.19 to 3.27;

(vii)        to note that the Chief Officer - Finance instructed a London Stock Exchange (LSE) announcement in respect of this report, drawing attention to the potential it has to impact upon the financial resources of the Council;

(viii)       to note that the Chief Officer - Finance will include an estimate of the financial implications of supply chain volatility in the Quarter 1 financial performance report that will be reported to this Committee on 4 August 2022;

(ix)          to instruct the Director of Resources to identify, implement or recommend appropriate actionsin addition to those already identified in this report, to mitigate the impact of the issues described in this report to ensure a balance budget is maintained for 2022/23;

(x)           to instruct the Director of Resources to include the issue of ongoing uncertainty re inflation within bid documentation and request an initial meeting for any successful bids to discuss how the ongoing inflation risk will be jointly managed between government and the council; and

(xi)          to note that the Roads Maintenance programme has been reviewed in accordance with the cost pressures and is presented to the committee in another report on this agenda (OPE/22/098).  ...  view the full decision text for item 9

The Committee had before it a joint report by the Chief Officer - Capital and the Chief Officer - Commercial and Procurement which provided an overview of current market conditions and supply chain volatility and the risks and impacts to the Council financially and in terms of the procurement workplans.

The report recommended:-

that the Committee -

(a)         note the global external factors that are having a negative impact on capital and revenue costs, including the delivery of Capital programmes/projects in terms of their budget and delivery timelines;

(b)         in light of these external cost and time pressures, instruct the Chief Officer - Capital to review the approved General Fund and Housing Capital   programmes/projects in terms of timeline delivery and financial viability and to consider the impact on service delivery as a result of revised delivery timelines.

The review will be informed by the following criteria:

·            Investment, why are we doing it / meeting outcomes

·            Economic, value for money

·            Commercial, procurement / delivery mechanism

·            Environmental, inclusive of Net Zero

In addition, cognisance will be taken of where each project currently sits within its full life cycle; i.e. is it at feasibility stage, design development or construction and whether there are any interdependencies;

(c)          instruct the Chief Officer - Capital to report the outcome of the review, following completion of recommendation (b), to the Council meeting on 24 August 2022, within the report being prepared by the Chief Executive on the Policy Statement “Working in Partnership for Aberdeen” and its impact on the Council’s Commissioning Intentions, Service Standards and Budgets for 2022/23;

(d)         in advance of a report detailing the outcome of the review in (c) above, approve that the Director of Resources may reprofile capital projects in consultation with the Chief Officer - Capital and the Chief Officer - Finance and the Convener and Vice Convener of the City Growth and Resources Committee where supply chain volatility may lead to additional costs or revised timelines;

(e)         note that the Council will request an opinion from our external auditors on the impact of this from a value for money perspective;

(f)           note the mitigation actions to be adopted as detailed in paragraph 3.19 to 3.27;

(g)         note that the Chief Officer - Finance instructed a London Stock Exchange (LSE) announcement in respect of this report, drawing attention to the potential it has to impact upon the financial resources of the Council;

(h)         note that the Chief Officer - Finance will include an estimate of the financial implications of supply chain volatility in the Quarter 1 financial performance report that will be reported to this Committee on 4 August 2022;

(i)           instruct the Director of Resources to identify, implement or recommend appropriate actionsin addition to those already identified in this report, to mitigate the impact of the issues described in this report to ensure a balance budget is maintained for 2022/23;

(j)           instruct the Director of Resources to include the issue of ongoing uncertainty re inflation within bid documentation and request  ...  view the full minutes text for item 9