Archived decisions

Contact: Bob Eardley, Strategic Planning Manager, 01962 846275

1. Summary

1.1 This report sets out the proposed Education capital programme for 2002/03 to 2005/06 (shown as Appendix 1). The Executive Member, Education is being recommended to approve:

a) the capital programme for 2002/03 to 2005/06 as set out in Appendix 1 for submission to the Cabinet;

b) that the 2001/02 capital programme be amended to reflect the award of specialist school status and a capital grant of £100,000 to Wildern School, Hedge End;

c) the making of a grant to the Diocese of Winchester to cover 15% of the cost of acquisition of the site of St. Francis Church of England Aided Primary School, Chandler's Ford.

1.2 Prior to the Executive Member considering the proposed programme, this report is being presented to the Education Policy Review Committee to provide the Committee with the opportunity to comment to the Executive Member on the proposals.

2. Introduction

2.1 The Cabinet at its meeting on 17 December 2001 asked Executive Members to prepare proposals for:

· a locally-resourced capital programme for the four-year period from 2002/03 to 2005/06 within the guidelines of the current capital programme uplifted for inflation, and

· capital schemes supported by scheme or programme specific Government grants and borrowing approvals for 2002/03 and those expected to be supported in 2003/04, 2004/05 and 2005/06.

3. Capital programme 2002/03 to 2005/06 - schemes supported by Government approvals

3.1 The Committee's capital programme is based on credit approvals from the Government under the Annual Capital Guideline (ACG) process, together with capital receipts to support major projects. Other than capital receipts, there are no local resources to supplement the programme. The share of capital receipts for 2001/02 available to support the Education capital programme will be added to these guidelines with the closure of the 2001/02 accounts.

3.2 On the basis of the position outlined above, resources available for each of the four forward years to 2005/06 are:

3.3 Resources totalling £3.99m are proposed to be carried forward from 2001/02 to 2002/03. This sum is made up as follows:

	£m
Balance from 2000/01	0.458
Deferred schemes approved by Executive Member 23 November 2001	3.532
Total	3.990

4. Credit approvals - Schools Capital Expenditure (SCE) allocation

4.1 Following a bid in September 2001, the DfES has allocated credit approvals for 2002/03 for basic need schemes. A bid for credit approvals totalling £8.497m under the Targeted Capital Fund was submitted in December 2001 to fund the transfer of Sundridge School to the former Park House Primary School building, Havant and the proposed reorganisation of special schools in East Hampshire. A decision on this bid is expected in March 2002.

Basic need

4.2 The SCE submission sought funding for 1,536 additional primary and 11-16 places, all of which have been approved, with the exception of the bid for 261 additional secondary places in Alton, where an allocation of only 61 places has been made. The DfES have accepted that this was an administrative error on their part, but there is no opportunity for correction in 2002/03. They have, however, confirmed that the additional places will be allocated in 2003/04, the year when development at the Alton schools is likely to take place. Formal confirmation of this undertaking is currently being sought. The bid reflected the continuing growth in secondary pupil numbers (1,041 places) and localised demand for further primary provision (495 places). 157 sixth form basic need places were bid for, but DfES have advised that the provision of post-16 places will need to be discussed in detail with the Learning and Skills Council in order to agree the number and location of additional sixth form places. These discussions are under way.

4.3 A welcome development has been an increase of 16% in the per place financial allocations, which will help to address the effects of high levels of building cost inflation, which have pushed up project costs substantially in recent months.

4.4 There is £892,000 in the existing programme for 2002/03 for the provision of additional secondary places in Romsey. There is currently a significant number of children from Southampton in the two Romsey secondary schools and, following discussions with the schools and Southampton City Council officers, it is proposed not to extend either of the two schools, but to supplement available resources to meet an urgent need at Wildern School, Hedge End. It is proposed that the resources for these places be switched from Romsey to Hedge End.

Formula allocations

4.5 In addition to the basic need funding, a number of formula allocations have been made by the DfES, which are set out below. They are summarised in Appendix 2, which also shows the amounts available for 2001/02 and 2003/04. All references to amounts for 2003/04, both in the text and in Appendix 2, are indicative.

New Deal for Schools Modernisation fund

4.6 As part of its strategy for providing capital resources to fund work identified through Asset Management Plan (AMP) surveys, the DfES announced at the end of 2000 that credit approvals would be made available to LEAs in 2002/03 and 2003/04 to carry out major modernisation and improvement works in schools. This would be done through a new allocation scheme to be known as the New Deal for Schools (NDS) Modernisation Fund. The amounts allocated to individual LEAs would be based on the DfES's assessment of relative need among LEAs, based on detailed submissions of the work needed to bring school buildings up to the standards required to teach the modern curriculum. This new capital funding would be made available in parallel with specific allocations which began in 2001/02 to address the backlog of building condition work.

4.7 The County Council's allocation under the NDS Modernisation Fund is £6.807m for 2002/03 and £11.746m for 2003/04. These allocations are the highest in the country and are based partly on pupil numbers and partly on the assessment of relative need referred to in paragraph 4.6. Allocations for building condition work (which will form part of the Policy and Resources capital programme) are £11.998m for 2002/03 and £15.006m for 2003/04. The allocation for 2001/02 was £7.751m.

4.8 Proposals for allocating NDS Modernisation funding are currently being considered in the context of a continuing analysis of schools' needs in relation to the Asset Management Plan Local Policy Statement and Statement of Priorities, approved by the former Education Buildings Sub-Committee. Proposals for an outline programme will be presented to the Executive Member, Education in March. Priority areas will include the provision of halls, libraries and music/drama facilities in primary schools, modernisation of specialist teaching areas in secondary and special schools, including science laboratories and technology areas, and the replacement of poor quality temporary classrooms. Other priorities include early years provision and replacement of unsuitable accommodation for pupil referral units.

4.9 In view of the need to complete analysis of AMP data, to consult schools collectively and individually, and to secure specific approvals, it is proposed that £2.845m be allocated to schemes in 2002/03 and £15.315m for schemes to start in 2003/04. This approach also reflects the pressures on the capital programme overall and the need to apply funding to allow priority schemes to start in 2002/03.

Seed Challenge Scheme

4.10 2002/03 will be the third year of the Seed Challenge scheme, which provides grant to match resources raised by schools to fund capital projects. The County Council's allocation in 2002/03 is £1.267m and the same amount for 2003/04; £0.688m was allocated in 2001/02. Schools were invited in early December to submit bids for next year's Seed Challenge funding and were advised of the detailed criteria to be used by the Executive Member, Education to assess bids, in the context of a likely over-subscription for available funding. Bids are due to be returned in mid-February and a report will then be prepared for consideration by the Executive Member in March to approve specific schemes.

Schools' devolved capital

4.11 An allocation of £7.568m has been made in 2002/03 for schools' devolved capital. This will be allocated to schools according to the DfES formula set out below and is intended to fund high priority projects identified through schools' AMPs.

	£
Per nursery/primary pupil	18.74
Per secondary pupil	28.11
Per SEN/PRU pupil (all schools)	56.22
Lump sum (all schools)	7,500

4.12 The indicative allocation for schools' devolved capital for 2003/04 is £12.67m; the figure for 2001/02 is £6.177m.

LEA liabilities on voluntary aided projects

4.13 £152,000 has been allocated for LEA liabilities on voluntary aided school schemes. This consists of £83,000 on liabilities arising from NDS Modernisation Fund projects at voluntary aided schools and £69,000 on liabilities from devolved capital.

Other funding

4.14 As reported in November 2001, the Neighbourhood Nurseries Initiative (NNI) capital allocations included a sum of £153,000 for 2002/03 and £62,000 for 2003/04. In addition, an allocation of £424,000 in 2002/03 has been made for building local authority administered Nursery Education in Disadvantaged Areas (NEDA). This funding needs to be matched from other sources, which could include provision for nursery facilities already in the capital programme, or from the NDS Modernisation Fund. Detailed proposals will be brought forward for future decisions.

4.15 An allocation of £231,000 has been made to fund school security measures. For the past five years, allocations for this purpose have been made through the Standards Fund and have been used in the main to finance, usually on a shared basis with schools' own resources, building improvements aimed at visitor access and control and optimising the safety of pupils and staff. Some 15% of the available grant, which was £507,000 in the current year, was used for training of school staff in security awareness. As the funding for 2002/03 is capital rather than revenue, training will need to be funded from alternative sources. A Security Panel, consisting of governor and headteacher representatives, and officers from the Education and Property, Business and Regulatory Services Department, has considered bids from schools for the allocation of Standards Fund grant and it is proposed that this arrangement should continue. As the amounts involved are usually quite small, individual allocations would be approved by the County Education Officer.

Warren Park Primary School, Havant - Early Years Centre

4.16 Warren Park Primary School, Havant, is within the most deprived ward in the county and within the bottom 20% of wards nationally, as defined by the Department of Transport, Local Government and the Regions multi deprivation indices. It is one of the most improved schools in Hampshire. That it is performing so well is a tribute to effective management.

4.17 In summer 2000, the Warren Park ward was granted a Sure Start Project by the Government. This Project is to work with young children and their families in the area to counteract the cycle of deprivation. A multi-agency Sure Start Partnership includes representation from the local community, Havant Borough Council, the Single Regeneration Board (SRB), East Hampshire Primary Care Trust, Hampshire County Council and the Early Years Development and Childcare Partnership. As part of its work, and after full consultation, the Sure Start Partnership has decided to develop a major Sure Start Early Years Centre on the Warren Park Primary School site. This development has now been linked to the Neighbourhood Nursery Initiative, which, together with Sure Start, SRB, the school, Hampshire County Council and Havant Borough Council will be funders of the project.

4.18 The Sure Start Early Years Centre will include a 90 place full day care nursery for children aged 0-4 years, a community centre, crèche, information centre, toy library, training centre, interview/assessment rooms, health facilities and administration suites. An additional classroom to be provided through the Government's Key Stage 2 initiative will be included with the Early Years Centre contract.

4.19 The Director of Property, Business and Regulatory Services has undertaken the detailed design work and will manage the capital scheme on behalf of the funding partners. The building will remain in County Council ownership with appropriate management arrangements being set up with providers. The capital programme includes £130,000 for provision of an additional classroom at Warren Park Primary School as part of the Government's Key Stage 2 initiative and there is £50,000 to support early years developments. The sources of funding are summarised below:

	£'000
Sure Start Grant	690
Single Regeneration Budget	245
Neighbour Nurseries Initiative	168
Education capital programme	180
Warren Park School	150
Havant Borough Council	50
Total	1,483

4.20 There are resources of £177,000 available through the Neighbourhood Nurseries Initiative to cover the £168,000 contribution agreed from this source, together with the provision of £50,000 in the 2001/02 programme to support early years developments, which has been carried forward to 2002/03.

5. Capital programme 2002/03 to 2005/06 - schemes supported by Government approvals

5.1 The total available to fund starts in 2002/03 is £30.373m. The table shown in paragraph 3.2 above illustrates how this sum is arrived at.

Capital programme 2002/03

5.2 The proposed four year capital programme is attached as Appendix 1. The 2002/03 programme totals £30.373m and includes provision for contingency and furniture and equipment allocations. It is not proposed to make provision in the programme for general minor works, for which an unallocated sum of £100,000 has been made available in previous years. This is because of the significant funding pressures on the capital programme (see section 7 below) and the increased amounts of devolved capital available to schools.

5.3 The total value of the capital programmes submitted for consideration for the four years to 2005/06 is:

	£'000
2001/02	55,123	(for information)
2002/03	30,373
2003/04	36,573
2004/05	7,000	excludes Schools' Devolved Capital, NDS Modernisation etc. (see para. 6.2)
2005/06	7,000
	136,069

5.4 The figures are net of developers' contributions and exclude the costs of land for programme schemes, which are dealt with outside the committee guidelines.

6. 2003/04 to 2005/06 guidelines

6.1 As indicated in paragraphs 5.1 and 5.2, it is possible to fund those schemes where starts need to be made in 2002/03. Schemes where the need for accommodation is not so pressing have been put back to 2003/04. The estimated costs of specific schemes proposed for inclusion in 2003/04 total £34.203m as listed in Appendix 1. Resources totalling £26.448m (excluding an assumed £8m for ACG) are available to fund this proposed programme, leaving a shortfall of £7.755m, which will be a first call on the 2003/04 ACG allocation.

6.2 The table in paragraph 5.3 anticipates programme values of £36.753m for 2003/04, £7m for 2004/05 and £7 m for 2005/06. These figures are based on the assumption that demand for additional secondary places has now peaked. The need for extensions to primary schools will continue in response to demand from new housing developments in various parts of the county, and the establishment of Major Development Areas (MDA) in response to the County Structure Plan (Review) will generate the need for new primary schools. No assumptions have been made about NDS Modernisation, Schools' Devolved Capital, Seed Challenge, or other formula allocations beyond 2003/04, as these are dependent on the outcome of the current Public Expenditure Review. The size of the forward programmes for 2004/05 and 2005/06 reflects this. The proposed 2003/04 programme includes those schemes deferred from 2002/03 referred to in paragraph 6.1

7. Pressures on the capital programme

7.1. There are sufficient resources available to fund all the schemes which need to be started in 2002/03. This can be achieved, however, only in the context of a funding shortfall for 2003/04, i.e. by deferring schemes to the value of £7.8m without resources. In January 2001, an underlying shortfall of resources of £6.7m was reported to the former Education Committee; this has increased to £7.8m for the following reasons:

· continuing high levels of inflation in building costs, which require provision for schemes carried forward from the current year to be inflated by 7%, together with a contingency for future inflation;

· the high level of basic need projects requiring significant furniture and equipment allocations, for which specific provision is not made in DfES allocations;

7.2 There are, however, several ways by which this under-funding can be reduced and which officers are currently implementing. These include:

· capital receipts from sites currently in the process of being sold, amounting to some £2.5m;

· results of a current review to identify opportunities to increase the proportion of these receipts available to support the Education capital programme;

· application of NDS Modernisation funding to support basic need schemes which include an improvement element. In the past these have been financed from the basic capital programme provision. This approach is dependent on design work being progressed for the schemes concerned and to approval of priority categories of work for expenditure of this funding;

· identification of schools with significant excess site area with development potential following the recent Land and Property Review. Work is currently in hand to fast-track a small number of such sales to achieve substantial additional capital receipts to reduce the funding deficit. These disposals would require the agreement of governing bodies and the allocation of some of the resulting resources to address priority capital work in the schools concerned. It is estimated, however, that additional resources of some £2.5m could accrue from such disposals. Further disposals could follow;

· a review of funding sources for the provision of furniture and equipment, which would include the potential for funding from schools' devolved capital allocations;

· it is also anticipated that, as in previous years, there will be a balance of resources brought forward from 2001/02 if calls on the contingency fund are less than the provision. In 2001/02, £595,000 was brought forward from 2000/01.

7.3 It is hoped that through implementation of the measures proposed above, the deficit could be reduced by some £7m in the next two to three years and that further progress could be made in subsequent years. The measures proposed may be summarised as follows. Amounts are estimates at this stage:

	£m
Capital receipts in pipeline	2.5
Additional proportion of receipts	0.5
NDS Modernisation element of basic need schemes	1.0
Fast-track land sales	2.5
Other measures	0.5
Total	7.0

8. Overall position

8.1 Although the resourcing difficulties referred to in section 7 of this report are significant, the overall picture is good. The resources available to expand and improve schools are now very substantial and there are realistic sums available to tackle much needed improvements in facilities. Over the period 2001/02 to 2003/04, investment of £120m is either in hand or planned in Hampshire schools, an average of over £220,000 per school. This is in addition to over £30m allocated through the New Deal for Schools to tackle building condition work. Over £26m of the available funding is being made available direct to schools through devolved capital and it is essential that this money is used to best effect in partnership with the LEA, to ensure that priority needs set out in Asset Management Plans are tackled swiftly and effectively.

9. Revenue Implications

9.1 The revenue implications of the proposed capital programme are as follows:

9.2 The total revenue implications for the four years of the starts programme, including capital charges, represent a real term increase of 1% over the 2001/02 original budget of this service.

10. Schools Access Initiative

10.1. The Schools Access Initiative provides credit approval to LEAs to increase the accessibility of mainstream schools for pupils with physical and sensory disabilities. An indicative allocation of £1.614m has recently been received for 2002/03; the allocation for the current year was £1.045m and for 2000/01 £630,000. Specific proposals are now being formulated and formal approval of their inclusion in the capital programme will be sought in due course.

11. New Opportunities Fund allocation

11.1 As part of a national initiative, the County Council has received an indicative allocation of £6.6m from the New Opportunities Fund (NOF) to be used for the provision of major sporting and community facilities in schools and for the improvement of outdoor education provision. Individual schemes are intended to make a significant contribution to sports provision and confirmation of the allocation is dependent upon submission of detailed proposals to the NOF in April, with decisions towards the end of 2002. Officers are currently considering the most appropriate strategy for optimising the use of this funding and will bring forward proposals in parallel with those for expenditure of NDS Modernisation funding.

12. Issues relating to the 2001/02 capital programme

Wildern School, Hedge End

12.1 Wildern School has been awarded specialist school status for Arts and the County Council has been allocated a capital grant of £100,000 to reflect this. It is recommended that the 2001/02 capital programme and resources be amended to reflect this.

St. Francis Primary School, Chandler's Ford

12.1 On 23 November 2001 the Executive Member, Education approved a report proposing a number of variations to the 2001/02 capital programme. One of the issues proposed for approval was the making of a grant to the Diocese of Winchester to meet 15% of the cost of acquiring the land for St. Francis, CE Aided Primary School, Chandler's Ford. The remainder of the acquisition cost was covered by DfES grant and the cost of the grant will be covered within the Education share of the sale proceeds as they are received, making the grant self-financing.

12.2 A recommendation to make a grant to the Diocese of Winchester for this purpose was inadvertently omitted from the 23 November report and authority is now sought for this.

Section 100D - Local Government Act 1972 - Background papers

The following documents disclose facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of this report.

NB: the list excludes:

1. Published works

2. Documents which disclose exempt or confidential information as defined in the Act.

Letter of 19 December 2001 from DfES to County Education Officer: Capital Investment in Schools 2002/03.

Appendix 2

Formula based capital allocations 2001/02 - 2003/04

	2001/02	2002/03	2003/04
	£'000	£'000	£'000
NDS Modernisation fund	-	6,807	11,746
Schools' devolved capital	6,177	7,568	12,670
LEA liabilities for voluntary aided school work	-	152	281
Seed Challenge	688	1,267	1,266
Early years capital (requiring match funding)	177	577	485
School security - capital modernisation fund	-	231	-
Total Education programme	7,042	16,602	26,448
NDS Condition funding (P&R capital programme)	7,751	11,998	15,006
Overall total	14,793	28,600	41,454