Capital Spending


Despite the recommendation of the Local Government Association Peer Review for an urgent re-appraisal of the Council’s £200m capital expenditure programme, nearly a year has passed and no visible progress has been made.  The Council was already borrowing £168 million as of March 2022, a figure which is set to double under current plans over the next five years. 

Cllr William Sunnucks, Conservative Spokesman on Council Resources, said: The capital programme review needs to achieve three different things. 

  • Bring discipline to capital spending, with transparent financial appraisals and controls
  • Find a way to spend the Town Deal and Levelling Up Grants on meaningful practical projects before the money is eaten away by inflation
  • Find financially sustainable ways of housing those in expensive and unsatisfactory temporary accommodation.

There is no sign yet as to where the review is focussed.  The Council continues to take on debt to buy allocated social housing which would otherwise have gone to housing associations – no addition to the total supply.  Sometimes it buys market housing at an interest cost of 4.5% per annum to convert to social housing that yields just 1.5%. 

And it embarks on complex property developments such as the Northern Gateway where it ends up taking risks it struggles to understand."


This article is one in a series of how a Conservative Administration would run Colchester Council more effectively and more efficiently.

Background note: as with any business the Council categorises its expenditure into two pools.

·       Revenue expenditure is incurred on wages, supplies, building maintenance, interest etc. It is funded by taxes and trading surpluses. 

·       Capital expenditure is expenditure on large projects such as community centres, the Community Stadium and the Northern Gateway Development.  It is normally funded by borrowings on which interest must be paid for the life of the loan.