Contact: Bob Eardley, Strategic Planning Manager, Children's Services Department. Telephone 01962 846275; email: [email protected]

1. Summary

1.1 This report proposes the Children's Services capital programme for 2007/08 to 2010/11.

1.2 Decisions on the capital programme will support the County Council's corporate priorities, as indicated in the detailed capital programme attached at Appendix 1.

Children Act outcomes

1.3 The five outcomes specified in the Children Act are set out below, with a summary of how the proposals in this report contribute to their achievement:

· being healthy (enjoying good physical and mental health and living a healthy lifestyle): through proposals which include the encouragement of walking and cycling to and from school, the provision of health advice through children's centres and co-location with the Health Service;

· staying safe (being protected from harm and neglect): by creating safe environments in schools, children's centres, children's homes and carers' homes;

· enjoying and achieving (getting the most out of life and developing the skills for adulthood): by providing a high standard of education and care for children in suitable buildings;

· making a positive contribution (being involved with the community and society and not engaging in anti-social or offending behaviour): by encouraging the flexible and creative use of accommodation;

· economic well-being (not being prevented by economic disadvantage from achieving their full potential in life): by ensuring that proposals will not disadvantage children, will protect equality of opportunity and support children from no or low income families to secure skills and qualifications.

2. Capital programme 2006/07 to 2009/10 - schemes supported by Government approvals

2.1 The Children's Services capital programme is based on credit approvals from the Government through the Single Capital Pot, Government grants, capital receipts and developers' contributions. The availability of Government grants and borrowing approvals, together with developers' contributions, is set out in Table 3. Any capital receipts for 200607 available to support the Children's Services capital programme will be added to these guidelines with the closure of the 2006/07 accounts.

2.2 Cabinet agreed on 25 September 2006 to extend the restrictions on the use of Government supported borrowing allocations from 2007/08 to the remaining three years of the proposed capital programme. This decision was taken because the mechanism within the revenue grant system which previously provided funding for the marginal cost of additional supported borrowing has not been restored by the Government for 2007/08. Cabinet set provisional limits for the use of supported borrowing for Children's Services, as shown in Table 1.

Table 1

Year	New pupil places	NDS Modernisation	Schools Access Initiative	Reduction	Totals
	£m	£m	£m	£m	£m
2007/08	4.445	7.623	2.143	-3.996	10.215
2008/09	4.445	7.623	2.143	-3.368	10.843
2009/10	4.445	7.623	2.143	-3.259	10.952
2010/11	4.445	7.623	2.143	-3.183	11.028

2.3 Schemes funded by capital grants from the Government may be added to the above limits. The anticipated capital grants for each of the four years of the programme are summarised in Table 2.

Table 2

2.4 On the basis of the position outlined above, resources available for each of the four forward years to 2010/11 are set out in Table 3. Allocations from the DfES for 2008/09, 2009/10 and 2010/11 are estimates only, as the DfES has given no indication of the level of resources to be made available in these years and allocations are subject to the outcome of the next Comprehensive Spending Review.

Table 3

2.5 Resources totalling £19.496m are proposed to be carried forward from 2006/07 to 2007/08. These are set out in detail in paragraphs 12.1 to 12.3.

3. Provision of new pupil places

3.1 The DfES system for allocating funding for new pupil places operates through a formula based on providing each authority with a relative proportion of the available pot, taking account of:

· the actual number of school pupils in each authority (40%); and

· the forecast growth in pupil numbers, by comparing actuals with forecasts as at September following the end of the spending review period, i.e. September 2008 (60%).

3.2 The amount allocated to the County Council through this formula for 2007/08 is £4.445m, which is available to fund new projects.

3.3 Although primary school rolls generally are continuing to fall, there is significant growth in numbers in some areas of the county because of major new housing developments. This trend was referred to in the 2006/07 capital programme report in January 2006 and will continue for several years. Further details of the funding implications are given in paragraph 10.2 In addition to future years' formulaic allocations for new pupil places, significant developers' contributions will also be available. There is, however, no specific provision to support the remodelling of accommodation necessary to make best use of resources during a time of falling rolls. The necessary work requires careful management of priorities.

3.4 In the context of the localised need for additional primary school places referred to above, the proposed programme for 2007/08 includes one form entry extensions to Elvetham Heath Primary School, Fleet and Marnel Infant and Junior Schools Basingstoke to cater for housing growth in the areas served by those schools.

Elvetham Heath Primary School, Fleet

3.5 Continuing pressure from rising pupil numbers at Elvetham Heath Primary School, Fleet was reported to the Executive Member for Children's Services on 21 July 2006 and the possible need for a permanent extension to the school was identified. Since that report was submitted further detailed work has been carried out which highlights the continuing need for additional places at this school for several years into the future. Public consultation has been carried out and proposals and designs have been developed for a one form entry extension (210 places). The estimated cost of this extension, £3.000m can be met from the proposed provision in the 2007/08 capital programme for new pupil places.

Marnel Infant and Junior Schools, Basingstoke

3.6 Expansion of these schools to three forms of entry is necessary to meet planned growth from the development of 2,000 homes at North Popley. These proposed expansions will increase the capacity of Marnel Infant School from 210 places to 270 places and Marnel Junior School from 240 places to 360 places. The estimated cost of the projects is £3.300m, of which £1.800m will be met from developers' contributions and the remainder from the provision for new pupil places. The bulk of the developers' contributions have still to be received, as they are linked to housing completions; prudential borrowing will, therefore, be required, the costs of which will be borne from provision in the capital programme.

Secondary schools

3.7 With the exception of Wildern School, Hedge End, there is no outstanding need for additional places in the secondary sector and this position is unlikely to change significantly in the next few years, as numbers overall continue to fall. There is more scope for accommodating local variations in demand for secondary places because the schools generally serve larger areas than most primary schools.

4. Other formulaic allocations

4.1 In addition to the funding for new pupil places, a number of formula allocations have been confirmed by the DfES. They are discussed in more detail below.

New Deal for Schools Modernisation fund

4.2 The amounts allocated through the New Deal for Schools (NDS) Modernisation Fund to individual local authorities are based on the DfES' assessment of relative need among authorities, following detailed submissions through the Asset Management Plan (AMP) of the range of work needed to bring school buildings up to the standards required to teach the modern curriculum.

4.3 The overall allocation to the County Council is split between suitability (improvement) work and funding to address the backlog of building condition work, which is managed by Policy and Resources. A split of these resources in the ratio of 54% to condition and 46% to suitability was agreed by Executive Members in July 2003; this split is reflected in the current year's programme. The amount proposed for allocation in 2007/08 is £23.674m, of which £10.890m will be for suitability work and £12.784m for condition work.

4.4 Funding is allocated to projects according to the criteria set out in the Asset Management Plan Statement of Priorities, which defines priority categories for capital work and was approved by the Executive Member for Education on 20 January 2005.

4.5 In addition to the previously announced NDS allocation for 2007/08, in November 2006 the DfES invited authorities to accept an offer of an advance of 50% of their indicative NDS allocations for 2008/09. For the County Council this amounted to £11.837m, of which £5.445m is applicable to the Children's Services capital programme and the remainder to Policy and Resources. The advance was offered as capital grant rather than credit approval and so is unaffected by the issues relating to supported borrowing outlined in paragraph 2.2.

4.6 The Executive Member, Policy and Resources agreed on 6 December 2006 to take up this offer and the 2007/08 cash limit is accordingly increased by £5.445m. This gives considerably greater flexibility in framing the 2007/08 programme and has the benefit of allowing planned projects to be brought forward from subsequent years. In the light of building cost inflation continuing to run at levels significantly above the average for the economy as a whole, this should help to achieve better value for money. The advance will be deducted by the DfES from the County Council's NDS allocations in 2008/09, 2009/10 and 2010/11.

4.7 Pressures on future years' programmes are dealt with in more detail in section 10 of this report.

4.8 Significant allocations are proposed in the 2007/08 programme for modernisation work in primary, secondary and special schools, which will address issues such as the replacement of poor quality temporary classrooms, specialist provision in primary schools and refurbishment of science and technology spaces in several secondary schools. As in previous years, several block allocations are recommended, including amounts for EOTAS (£0.490m), health and safety (£0.700m), school security (£0.600m), staff workforce provision (£0.500m) and the costs of progressing land sales (£0.150m). Two new block allocations are proposed, for sustainability measures (£0.350m) and improvements to school kitchens (£0.250m). Local authorities are particularly encouraged to include these areas of work by the DfES in their guidance on the advance capital allocation referred to in paragraph 4.5.

4.9 Allocations for improvements to children's homes (£0.600m) and adaptation of foster carers' homes (£0.150m) are also recommended; the provision for children's' homes is enhanced in line with the decision to increase resources to tackle the backlog of outstanding work, agreed by the Executive Lead Member for Children's Services on 21 July 2006. A further increase in resources is included to reflect the additional Government funding referred to in paragraph 4.5; this will be reflected by a corresponding reduction in resources for this work in 2008/09.

4.10 Recommendations for the allocation of block votes to specific projects will be made during the programme year

Schools' devolved formula capital

4.11 An allocation of £21.723m has been made by the DfES in 2007/08 for devolved formula capital for all schools. This will be allocated according to the DfES formula set out in Table 4 and is intended to fund high priority projects identified through schools' AMPs. Allocations for 2006/07 are shown for comparison. The total allocation for schools' devolved formula capital in 2006/07 was £20.688.m.

Table 4

	2006/07 £	2007/08 £
Per nursery/primary pupil	61.00	63.00
Per secondary pupil	91.50	94.50
Per SEN/PRU pupil (all schools)	183.00	189.00
Lump sum (all schools)	17,000	18,500

4.12 Officers work closely with schools to ensure that devolved formula capital allocations are spent on Asset Management Plan priorities. There is particular emphasis on ensuring that they are used in conjunction with County Council and other capital resources so that the maximum number of schools benefit and that resulting projects make optimum use of available resources.

4.13 The amounts of funding available to schools through devolved capital are increasing substantially. Table 5 indicates the amounts available to typical schools. The expectation will, therefore, grow that schools will be using these allocations to help cope with high priority capital maintenance and essential developments.

Table 5

	2001/02 £	2005/06 £	2006/07 £	2007/08 £
210-pupil primary	9,227	23,524	29,810	31,730
1,000-pupil secondary	32,287	87,250	108,500	113,000
75-pupil special	9,458	24,265	30,725	32,675

Schools Access Initiative

4.14 The Schools Access Initiative provides credit approval to local authorities to increase the accessibility of mainstream schools for pupils with physical and sensory disabilities. An allocation of £2.143m has been confirmed for 2007/08. Specific proposals have been formulated and are included in Appendix 3.

5. Capital funding for early years and childcare

5.1 Allocations for the provision of Phase II children's centres and to facilitate the continuation of existing third party childcare provision have been made for 2006/07 and 2007/08. As reported on 15 December 2006, it will be very difficult to fund the construction of new children's centres within the available funding, in spite of approvals to support this initiative by viring resources from provision elsewhere in the capital programme, in particular the allocations for management of falling rolls and for other early years provision. 70% of the available extended schools funding has been allocated to children's centres provision in 2006/07, in recognition of the contribution which extended school development makes to the children's centres initiative. This approach is proposed for 2007/08. The resources available for early years and extended schools provision are summarised in Table 6.

Table 6

	2006/07	2007/08	Totals
	£m
Children's centres	11.031	9.347	20.378
Sustainability funding	0.600	1.000	1.600
Other early years	0.400	0.375	0.775
Extended schools	0.515	0.527	1.042
Totals	12.546	11.249	23.795

6. Projects to be funded from capital receipts

Cadland Primary School, Holbury

6.1 As part of a comprehensive review of primary school provision in the Totton/Waterside area, Holbury Primary School was established from 1 September 2006. A project appraisal to provide appropriate accommodation in the former Holbury Junior School is being reported separately to the Executive Member for Education. The proposals include provision of a children's centre, as Holbury Primary School is in an area where a centre is required as part of the Phase II programme. The total estimated cost of the project is £2.547m. This will be funded from the anticipated capital receipt from the sale of the former Holbury Infant School site, provision for the management of falling rolls, NDS modernisation and children's centres and from the school's devolved capital. Prudential borrowing will be required against the anticipated receipt, the costs of which will be borne from provision in the capital programme.

Romsey Primary School

6.2 Following a review of primary school provision in the Romsey area, Romsey Primary School was established on 1 September 2006. A project appraisal to provide appropriate accommodation in the former Romsey Junior School is being reported to the Executive Member for Education. The proposals include provision of a children's centre, as Romsey Primary School is in an area where a centre is required as part of the Phase II programme. The total estimated cost of the project is £3.300m. Most of the funding for the project will be from the anticipated capital receipts from the sale of the former Romsey Infant School site and from some redundant land on the Romsey Primary School site. The remainder will be met from the provision for management of falling rolls, NDS modernisation and the school's devolved capital. Prudential borrowing will be required against the anticipated receipt, the costs of which will be borne from provision in the capital programme.

Burnham Copse Primary School, Tadley

6.3 Burnham Copse Primary School was established on 1 January 2007. Design work is in hand to provide appropriate accommodation in the former Burnham Copse Junior School at an estimated cost of £2.800m. Most of the funding for the project will be from the anticipated capital receipt from the sale or alternative use of the former Burnham Copse Infant School site The remainder will be met from the school's devolved capital. Prudential borrowing will be required against the anticipated receipt, the costs of which will be borne from provision in the capital programme.

Kings Worthy Primary School

6.4 Kings Worthy Primary School currently operates in a purpose-designed school building and an adjoining annexe in a converted Victorian house. The annexe provides very unsatisfactory accommodation and requires significant capital investment. A project has been drawn up to adapt and extend the school building to provide for all of the school's needs, which would allow the annexe to be sold for residential use. A project appraisal to provide appropriate accommodation is being reported to the Executive Member for Education. The total estimated cost of this proposal is £1.582m. This could be met through the anticipated capital receipt from sale of the annexe, together with contributions from NDS modernisation and the school's devolved capital. Prudential borrowing will be required against the anticipated receipt, the costs of which will be borne from provision in the capital programme.

7. Borrowing through the School Balances Loan Fund and Prudential Code for Capital Finance

7.1 Borrowing through the School Balances Loan Scheme and Prudential Code for Capital Finance provides access to capital funding in advance of capital receipts and developers' contributions becoming available. The School Balances Loan Scheme allows borrowing for capital projects against planned receipts up to a level of 25% of overall balances. Borrowing under the Prudential Code became available from 1 April 2004 and requires Cabinet approval.

7.2 Such borrowing is necessary to provide new school places at the appropriate time and to allow projects such as school amalgamations which require building adaptations to proceed. In value for money terms providing new school places as early as practicable to meet demand from new housing developments ensures that school places are located where they are needed and that pressure on other schools and the need for pupils to travel are minimised.

7.3 To date £4.989m has been borrowed under the School Balances Loan Scheme and by the end of 2006/07 £0.518m will have been repaid; the remainder of the borrowing is scheduled for repayment in 2007/08 (£0.759m) and 2008/09 (£3.712m).

7.4 For schemes starting in 2004/05 and 2005/06 an estimated £16.591m will have been borrowed by the end of 2006/07 through the Prudential Code; £3.855m of this amount is expected to be repaid in 2006/07, with the rest due for repayment in 2007/08.

7.5 Estimated borrowing of the £8.864m will be required for approved Prudential Code schemes in the 2006/07 programme. Four of these projects, arising from the review of primary school provision in Hedge End, are included in schemes recommended to be carried forward to 2007/08 (see paragraph 12.1).

7.6 Proposed borrowing totalling £12.690m is included in the recommended cash limit for the 2007/08 capital programme. Table 7 summarises the projects in the 2007/08 capital programme to be subject to future approval of borrowing.

Table 7

Project	Borrowing against	Comments
Basingstoke School Plus	Capital receipt	-
Burnham Copse Primary School, Tadley	Capital receipt	-
Cadland Primary School, Holbury	Capital receipt	-
Dowd's Farm Primary School, Hedge End	Developer's contribution and capital receipt	Included in 2006/07 capital programme
Freegrounds Infant School, Hedge End	Capital receipt	Included in 2006/07 capital programme
King's Copse Primary School, Hedge End	Capital receipt	Included in 2006/07 capital programme
Kings Worthy Primary School	Capital receipt	-
Marnel Infant and Junior schools, Basingstoke	Developer's contribution	-
Romsey Primary School	Capital receipt	-
Shamblehurst Primary School, Hedge End	Capital receipt	Included in 2006/07 capital programme

7.7 Full details of borrowing under the School Balances Loan Scheme and through the Prudential Code are set out in Appendix 4. Borrowing in advance of receipts is now becoming an increasingly important component of the funding profile for the capital programme and it is proposed to report quarterly through the capital programme progress reports to ensure that new borrowing is matched by a flow of repayments from disposals and developers' contributions. Future borrowing will make use of both the School Balances Loan Scheme, where possible, and of the Prudential Code.

7.8 Following a decision by Cabinet on 10 February 2006 that the costs of borrowing through the Prudential Code should be borne by individual services, provision has been made in the 2007/08 programme to meet continuing and anticipated borrowing costs. The amount included is £0.619m.

8. Capital programme 2007/08 to 2010/11

8.1 The total amount available to fund starts in 2007/08 is £84.282m. Table 3 in paragraph 2.4 illustrates how this sum is arrived at.

8.2 On the basis of the position outlined above, the total value of the capital programmes submitted for consideration for the four years to 2010/11 are shown in Table 8.

Table 8

8.3 The proposed four year capital programme is attached as Appendix 1. The 2007/08 programme totals £84.282m and includes provision for contingency and furniture and equipment allocations. The total value of the capital programmes submitted for consideration for the four years to 2010/11 is shown in Table 9.

Table 9

	Children's Services £'m
2006/07 (current)	68.569	(for information)
2007/08	84.282
2008/09	46.077
2009/10	36.632
2010/11	40.262
Totals	275.822

8.4 There are no proposals for PFI projects. From 2005/06, all education PFI credits are being allocated through the BSF programme nationally.

9. 2008/09 to 2010/11 guidelines

9.1 As indicated above, it is possible to fund those schemes where starts need to be made in 2007/08. The indicative resources available in 2008/09 total £46.077m and are summarised in Table 10. This table assumes that the split between NDS suitability and condition funding is the same in 2008/09 as in 2007/08. The split is subject to Executive Members' decisions, so the totals may vary.

Table 10

	£'m
New pupil places	4.445
NDS modernisation	10.890
Schools devolved formula capital	21.723
Schools Access Initiative	2.143
Local resources	0.125
Primary Capital Pathfinder	6.500
Proposed prudential borrowing	5.434
Reductions	-5.183
Total	46.077

9.2 Table 10 includes an amount of £6.500m of capital grant to be allocated to the County Council as an authority included in the DfES' national Pathfinder programme for a new capital funding stream for the improvement of primary schools and primary age special schools. Hampshire is one of 23 authorities nationally chosen for inclusion in this programme, which is intended to develop strategies and good practice for use of the new resources, which will become available nationally in 2009/10 and continue for up to 15 years. The County Council's bid was for major improvements to schools in the Andover area, including the complete replacement of Abbotts Ann Primary School. Further reports will be submitted as plans for the Pathfinder projects progress.

9.3 Of the total available resources of £46.077m in 2008/09, funding for schools devolved formula capital, the Primary Capital Pathfinder and projects to be funded through prudential borrowing are earmarked for specific use and are not available to fund the capital programme generally; therefore, £12.420m is available for this purpose.

9.4 Government funding at the 2008/09 level is assumed to continue for 2009/10 and 2010/11, but actual allocations will depend upon the outcome of the Government's next spending review in 2007.

10. Pressures on the capital programme

10.1 There are sufficient resources available to fund all the schemes which need to be started in 2007/08. The position for 2008/09 and following years, however, is difficult because of the combination of:

· uncertainties over the outcome of the Comprehensive Spending Review;

· the revenue "penalty" of taking up the full amounts of available credit approval;

· deductions to reflect the advance resources made available by the DfES for 2007/08;

· the need to fund the cost of new primary schools to serve major housing developments; and

· the capital cost of delivering the children's centres programme.

10.2 A significant amount of expenditure on basic need projects is anticipated in 2008/09, 2009/10 and 2010/11, which will generate funding pressures. These are projects to provide new schools in major development areas and other areas of significant new housing. Table 11 gives an overview of the location of new primary schools and major extensions where starts on site are expected to be required in the period from 2008/09 to 2010/11. The actual timing of these projects will depend upon the timing of planning consents for the residential development and the forecast rate of housing completions and Table 11 shows the best currently available information.

Table 11

Project	Extension/ new school	Expected start on site (subject to revision)
West of Waterlooville MDA	New	2008/09
Picket Twenty, Andover	New	2008/09
East Anton, Andover	New	2008/09
Aldershot Urban Extension	New	2009/10
Park Prewett, Basingstoke	New	2009/10
West of Waterlooville MDA	Extension	2010/11

10.3 The estimated average cost of a new one-form entry primary school is about £5m and of a one-form extension to an existing school about £3m. In broad terms, the estimated costs of the new primary school places where starts on site are likely to be required in 2008/09 to 2010/11 are about £30m, of which about half is expected to be available from developers' contributions. The remaining cost will need to be met from New Pupil Places allocations expected to total about £13m. As these allocations are likely to be fully taken up for such projects, there will be no leeway for other demands for new places and a reduction in the amount of overall flexibility in the programme. The amount of new housing planned currently and that likely to proceed after 2011 suggests that significant pressure on New Pupil Places funding will continue for several years.

11. Revenue Implications

11.1 The revenue implications of the proposed capital programme are shown in Table 12.

Table 12

Schemes within the guidelines	Full Year Cost
	Current expenditure £000	Capital Charges £000
2007/08	194	4,311
2008/09	140	2,332
2009/10	140	1,856
2010/11	140	2,039
Totals	614	10,538

11.2 The total revenue implications for the four years of the starts programme, including capital charges, represent a real term increase of 0.1% over the 2006/07 original budget of this service.

11.3 Part of the current expenditure costs, £0.194m, will be incurred in 2007/08. Since revenue expenditure on schools (which forms the vast majority of extra current expenditure caused by the capital programme) will effectively be fixed by central government from April 2006, most of the cost will be absorbed within the Schools Budget.

12. Issues relating to the 2006/07 capital programme

Project deferrals

12.1 It will not be possible, mainly because of changes in the scope, brief or programming of projects, to start the schemes listed in Table 13 during 2006/07. It is proposed, therefore, to defer them, with their resources, to 2007/08. The amounts show in Table 13 are the contributions to project costs from the Children's Services capital programme rather than the full estimated costs of schemes.

Table 13

Project	£m
Basingstoke School Plus	2.750
Bridge Education Centre	1.002
Dowd's Farm Primary School, Hedge End	4.460
Freegrounds Infant School, Hedge End	0.600
King's Copse Primary School, Hedge End	4.325
Shamblehurst Primary School, Hedge End	0.600
Stanmore Primary	0.263
Whiteley Primary	1.438
Wildern Secondary, Hedge End	0.250
Total	15.688

12.2 In addition it is proposed to carry forward resources from block votes which are unlikely to be fully spent in the current year. These are set out in Table 14.

Table 14

Block votes	£m
14-19 projects	0.075
Basingstoke - provision for new primary school places	1.125
Children's centres	0.800
Early years	0.275
Health and safety	0.250
Management of falling rolls	0.840
Schools Access Initiative	0.143
Contingency	0.300
Total	3.808

12.3 In total, therefore, it is proposed to carry forward resources of £19.496m from 2006/07 to 2007/08.

12.4 Issues relating to individual projects proposed to be carried forward are set out in the following paragraphs.

Basingstoke School Plus

12.5 The 2006/07 capital programme includes a sum of £2.750m to replace the KS3 provision currently on the former Ashwood Education Centre site with purpose- built accommodation on the main Pack Lane site. The new building would also include some vocational facilities. It was recognised when the project was included in the current year's programme that the funding then available would be insufficient for the scheme envisaged. Design work has been proceeding and firmer costs are now available. In total, the project is estimated to cost £4.250m, which could be met from the provision in the current year's programme carried forward to 2007/08, together with additional funding of £1.000m from the DfES' advance allocation for 2007/08 and an estimated contribution for £0.500m due to Children's Services from the future sale of the Ashwood site. Prudential borrowing would be required to cover the anticipated capital receipt.

Bridge Education Centre, Eastleigh

12.6 £1.002m is included in the 2006/07 capital programme for the conversion of the former Tankerville School, Eastleigh to form a new Bridge Education Centre to replace unsatisfactory temporary provision currently used in Colden Common. Detailed costing work has now been carried out and agreement secured for a contribution from CAMHS to meet the cost of office accommodation for its staff in the new building. A contribution will also be made by Policy and Resources to carry out major capital repair work to the building. Funding sources are summarised in Table 15.

Table 15

	£m
Capital programme 2006/07 c/f to 2007/08	1.002
NDS modernisation 2007/08	0.118
Devolved capital	0.150
CAMHS	0.460
Total	1.730

12.7 It is proposed to add this project to the 2007/08 capital programme at an estimated cost of £1.120m, net of the devolved capital and CAMHS contributions.

Dowd's Farm Primary School, Hedge End

12.8 Design work has now been completed on the approved primary school to serve a major new housing development at Dowd's Farm, Hedge End. The total estimated cost of the project is £5.263m, including £0.175m for furniture and equipment. Funding sources are summarised in Table 16.

Table 16

	£m
Developers' contributions received	0.184
Anticipated capital receipts and developers' contributions	4.117
Capital programme contribution	0.962
Total	5.263

Kings Copse Primary School, Hedge End

12.9 Design work is also complete on a replacement primary school at King's Copse, Hedge End at a total estimated cost of £5.432m, including £0.175m for furniture and equipment. Funding sources are summarised in Table 17.

Table 17

	£m
Anticipated capital receipts	4.900
Capital programme contribution	0.257
School devolved capital	0.200
Eastleigh Borough Council	0.075
Total	5.432

Youth Capital Fund

12.10 As reported on 21 July 2006 the Government has allocated all local authorities a Youth Capital Fund to invest in youth facilities. Funding is confirmed for the financial years 2006/07 and 2007/08. The allocation to the County Council for each of the two years was initially notified as £0.468m p.a., which has recently been increased to £0.514m p.a. Approval was given on 21 July 2006 for two projects and further approvals against the 2006/07 allocation are now sought. Approval for two projects against the 2007/08 allocation of £0.514m is also sought. Details of the proposed allocations are set out in Appendix 6.

Early years sustainability funding

12.11 The 2006/07 capital programme includes provision of £0.600m of capital grant to support the continued provision of good quality early education and childcare places. Funding can be used to make adaptations to buildings or to fund capital costs associated with relocating early education and childcare places to ensure their long-term sustainability and the continued provision of high-quality childcare for parents and families in Hampshire. Following an exercise to identify providers in need of such support, six projects have been identified at a total cost of £0.351m. These are set out in Appendix 7 and are recommended for approval.

Adaptations to a foster family's home

12.12 On 15 December 2006 the Executive Lead Member for Children's Services approved a policy for the adaptation and extension of family properties for children in care. In accordance with that decision, it is now proposed to fund the extension of a small two bedroom mid-terrace house to provide additional accommodation for a family which includes two children in care. The proposed alterations will extend the kitchen and provide a multi-use family room to supplement the very small living room. The estimated cost of the work is £0.065m, which can be met from the provision for such projects in the 2006/07 capital programme.

12.13 It is recommended that the proposed adaptations are funded, subject to detailed terms being agreed by the Director of Children's Services.

Action taken by the Director of Children's Services

12.14 Under delegated powers, and following consultation with the Executive Member for Education, the following action has been taken and it is recommended that formal approval is now given to the following allocations:

· Oak Meadow Primary School, Fareham - a further contribution of £0.007m from the block vote for the Management of Falling Rolls, to enable the relocation of the Nurture Unit to be completed;

· Otterbourne Primary School - a contribution of £0.013m from the staff workforce block vote, as a contribution to a project to improve staff facilities;

· Nightingale Primary School, Eastleigh - a contribution of £0.015m from the contingency to fund additional underpinning, drainage and services work for the incorporation of a turning head as part of the new multi-use games area, for better site access and management;

· Waterside Primary School - a contribution of £0.028m from the contingency to fund additional work on the remodelling project for the former Langdown Junior School building. Contributions of £0.024m from Policy and Resources and £0.005m from the school have been made;

· Minstead Study Centre - £0.022m from the contingency to meet the costs of hiring temporary buildings during the recent major building contract to allow the centre to continue to function;

· Herne Junior School, Petersfield - £0.016m from the contingency to meet the cost of playground resurfacing in advance of a developer's contribution due in the current financial year;

· John Hunt of Everest Community School, Basingstoke - £0.030m from the contingency to meet the costs of specifying and project managing an ICT and telephone system serving curriculum and administrative functions for the new school building, which is due to complete in May 2007;

· Following consultation with the Executive Member for Education, approval has been given to small projects at to support the extended schools initiative, totalling £0.249m. Earmarked funding from the DfES for this purpose is included in the capital programme provision for extended schools. A full list of projects is shown in Appendix 5. Expenditure is for a range of minor building adaptations and purchase of capital equipment to support schools with implementation of the extended schools agenda in their communities.

13. Temporary classrooms

13.1 Paragraph 6.2 of this report refers to the proposed major project at Romsey Primary School. Following the success of the arrangements adopted during the building work to facilitate the amalgamation of the Langdown Infant and Junior schools, where all pupils were moved from the junior school site to the infant school site, it is proposed to implement a similar situation for the Romsey Primary School building work. To allow the junior age pupils to move on to the former infant school site while the junior school building is adapted will require the provision of an additional five classrooms. This accommodation, together with the existing accommodation on the former infant school site, will provide sufficient space for all of the pupils, including the required specialist accommodation. The temporary accommodation will remain on site until the school is able to return to the completed primary school. The building works are scheduled for completion in April 2008, although it is likely that the move back to the school will not take place until the summer of 2008, to ensure that there is no disruption to pupils undertaking SATs tests early in the summer term. Approval to the placing of five temporary classrooms on the former Romsey Infant School site is now sought.

14. Summary position for 2006/07

14.1 Resources totalling £68.569m have been allocated for the starts programme in 2006/07 (see Appendix 2 for details. Of this total, £38.980m relates to block allocations for schools' devolved formula capital, Schools Access Initiative, furniture and equipment and contingency, leaving £29.589m for specifically identified schemes. Schemes to the value of £15.566m have started, with £14.023m still scheduled to start before the end of the financial year.

15. Building cost inflation

15.1 Tender price inflation for building work still continues to be significantly in excess of other national inflation annual increases. Published indices (by the DTI Public Sector Index) for the year from November 2005 to November 2006, around which the capital programme is based, are predicting a 3.6% increase. This represents a slight reduction in the percentage increases over recent years of around 6% and indicates a small downturn in the tender market for this period, but still exceeds national price rise indices for the cost of living. However, the impact of the Olympics and the continuing demand in the housing and construction markets will lead to continued inflationary pressure on tender prices which are forecast to increase at 5% - 6% annually over the next few years. These indices are currently based on forecasts and more reliable information will become available when these are firmed up.

15.2 To put this into some context, national building costs have increased by more than 30% in the last five years. To help mitigate this, the Director of Property, Business and Regulatory Services has put in place procurement strategies that reduce risk and uncertainty for the contractors and, through a number of innovative contracting arrangements, secure the resources the County Council requires, whilst still retaining value for money and ensuring a high quality of product.

16. County Council Policy Requirements

16.1 Legal implications - The proposals support the County Council's statutory duty to provide school places and comply with central government accommodation requirements and guidance.

16.2 Financial implications - These are set out in the report.

16.3 Personnel implications - None directly arising from this report.

16.4 Community cohesion, inclusiveness and partnership working - Most of the capital projects proposed in this report support these aims.

16.5 Crime prevention issues - None directly arising from this report.

Recommendations

1 The recommendations are contained in the summary decision sheet.

Section 100 D - Local Government Act 1972 - background documents

The following documents discuss facts or matters on which this report, or an important part of it, is based and have 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.

None.

Appendix 1

Children's Services capital programme

2007/08 - 2010/11

Appendix 2

Children's Services capital programme 2006/07 - resources as at 31 December 2006

		£m	£m
	Original Budget Book (excl land)		62,492
Internal Funding Changes
Add	Balance from 2005/06	971
	Carry forwards from 2005/06	10.601
	Share of 2005/06 capital receipts	235
	Developer's Contributions	400
Less	Deferred schemes (inc this report)	-19.946
			-7.289
Additional DfES allocations and grants
	Early Years	10.226
	Sustainable travel	418
	Specialist School Status	300
	Youth Capital Fund	514
			11.458
Other Funding
	School Contributions from Revenue	0.125
	Prudential borrowing	0.800
	Capital receipts 2007/08	0.983
			1.908
Total resources			68.569

Appendix 3

Schools Access Initiative - proposed works for 2007/08

Appendix 4

Borrowing through the School Balance Loan Scheme and Prudential Code for Capital Finance

Appendix 5

Allocations of funding to support the extended schools initiative

Appendix 6

Youth Capital Fund 2006/07 - proposed allocations

Youth Capital Fund 2007/08 - proposed allocations

Appendix 7

Early years sustainability capital - proposals for expenditure