Hampshire County Council

Buildings Land and Procurement Panel Item 7

2 October 2007

Revenue and Capital Repairs 2007/8 - six monthly review

Report by the Director of Property, Business and Regulatory Services

1

Introduction

1.1

This report updates Members on the current financial position for revenue and capital repairs and the New Deal for Schools (NDS) condition funding. In particular it:

· Confirms changes to the budget provision for 2007/08

· Outlines a change in the way NDS allocations will be made from 2008/09

· Proposes a re-profiling of capital repairs resources between 2007/08 and 2008/09

· Recommends additions to the capital repairs and NDS Condition fund programmes

Recommendations

That the Buildings, Land and Procurement Panel advise the Executive Member for Policy and Resources that approval be given to:

1. The proposed re-profiling of the Policy and Resources capital

repairs budget between 2007/08 and 2008/09

2. The additions to the capital repairs and NDS Condition Fund programmes as indicated in paragraph 4.1.

2

Revenue Repairs

2.1

Appendix 1 shows that the level of commitment to date against the revenue repairs and maintenance budget is 77% of the £15.3m available with 45% of the financial year having elapsed. As in previous years this is explained in part by the inclusion of £3.7m of budgets which are delegated with no buy-back arrangement and therefore treated as 100% committed. The remaining £12m shows a commitment of 69%. This is still a high proportion of the budget but the figure also includes the full-year commitments under the engineering term maintenance contracts of £6.4m. Excluding these figures the remainder of the budget shows a commitment of 52%.

2.2

The exceptionally wet weather over the summer period has resulted in higher than usual levels of repairs for example to roof leaks and drains and this is the main reason for the commitments to date being ahead of the profiled budget. As always the winter weather will have an impact on the level of spend and to date no calls have been made against the contingency provision in the budget.

2.3

The new engineering term maintenance contracts for all areas other than Winchester headquarters buildings commenced on 1 August 2007. The financial impact will be monitored as the year progresses but early evidence suggests there is likely to be an efficiency gain resulting from the new arrangements. The current arrangements for the headquarters buildings run until autumn 2008 and their replacement is currently being considered as part of the Facilities Management Modernisation review.

2.4

The increase to the budget figure reported to the March meeting relates to increased school funding and reflects more accurate data provided by Children's Services that was unavailable at the time the March report was prepared.

3

Capital Repairs

3.1

New Deal for Schools (NDS)

The County Council's 2006/07 NDS allocation was:

2006/07

£'000

Works 10,957

Fees 1,644

Total 12,601

3.2

The conditions of the Government grant require that the 2006/07 programme be completed by 31 August 2007, in effect creating a 17 month financial year. Commitments at this level have been made delivering £12.6m of projects to schools.

3.3

3.4

As reported to previous meetings the change in the way the Government provides support for the NDS programme meant the original budget for 2007/08 represented only 80% of the full allocation. The allocation has subsequently been increased by an advance allocation totalling £6.392m for NDS Condition which is 100% grant funded. This advance will be reclaimed over the following three financial years. The 2007/08 total budget including the advance is shown below.

2007/08

£'000

Original 10,247

Advance 6,392

Total 16,639

Allocations for 2008/09 to 2010/11 will be determined as part of the Comprehensive Spending Review 2007 (CSR07) the results of which are expected in December. The funding for this three year period is expected to be allocated on a different basis with a move away from the approach driven by asset management data which has seen substantial support for Hampshire schools. The proposed new approach is determined by the extent of modernisation of schools within an authority. It is not clear what impact the change in the distribution calculation will have on the County Council's overall allocation but transitional arrangements for authorities affected are expected to be put in place.

3.5

It is also unclear whether the size of the NDS programme nationally will change following CSR07 or whether the Government will move back to providing support through a fully grant-funded approach.

3.6

The table below shows indicative figures assuming the overall programme size remains the same. The grant to borrowing approvals ratio remains at 30:70 and the change in formula allocation has no overall impact. The impact of repaying the advance allocation is included.

Basic Allocation

Repayment of Advance

Budget for Year

£'000

£'000

£'000

2008/09

10,247

-2,131

8,116

2009/10

10,247

-2,131

8,116

2010/11

10,247

-2,131

8,116

The position in the table above is by no means a worst case scenario but represents a reduction of over 50% against the 2007/08 budget including the advance (21% against the basic allocation).

3.7

Dedicated Schools Grant (DSG) funded

The original capital repairs allocation of £10.908m funded from the DSG has been increased by a £1.692m carry forward from 2006/07 as agreed by the Schools Forum. The total funding for 2007/08 is therefore £12.537m.

3.8

Policy and Resources funding

3.8.1

The Policy and Resources capital repairs funding for 2007/08 incorporating the re-profiling recommended by the Panel at the March meeting was £5.68m. The approved carry forward from 2006/07 was £2.122m making a total provision in 2007/08 of £7.802m.

3.8.2

Progress against both the DSG and Policy and Resources allocations in the year to date is shown at Appendix 2.

3.8.3

To continue to ensure the strategic impact of resources can be maximised a further re-profiling of the 2007/08 allocation it is proposed to carry forward £1m into 2008/09. This would have the effect of reducing the 2007/08 allocation to £6.802m which would be sufficient to fund the programme already underway for the current year.

4.

Additions to the Capital Repairs and NDS Condition Fund programmes

4.1

It is proposed to add the following schemes to the capital repairs and NDS Condition fund programmes:

Moorside Place, Winnall - fitting out of accommodation for the relocation of the Book processing facility from the North Walls Reference Library - £100,000 (Office accommodation budget)

Applemore College - SCOLA recladding Phase 4 - £250,000

Queens Enclosure School, Cowplain - re-roofing - £650,000 (NDS)

LINK(S) TO CORPORATE STRATEGY

Yes

No

Hampshire safer and more secure for all

_

Maximising well-being

_

Enhancing our quality of place

_

This proposal does not link to the Corporate Strategy but, nevertheless, requires a decision because:

Budget

£'000

Commitment

£'000

%

Non-Education Services

Redecorations

568

87

15.3

Engineering servicing and repairs

1758

1,758

100.0

Minor structural repairs

816

632

77.5

Asbestos testing

43

11

25.6

Vandalism reinstatement

114

89

78.1

Sub-total

3,299

2,577

78.1

Contingency

397

7

1.8

Delegated to schools

Delegation under LMS scheme

2,580

2,580

100

Delegation under fair funding:

Community Schools

8,029

5,737

71.5

Foundation Schools

449

449

100

Sub-total

11,058

8,766

79.3

Other Allocations

Strategic consultants

411

422

102.7

Non functional buildings

109

0

0

Gypsy and Traveller Sites

28

5

17.9

Sub-total

548

427

77.9

Total

15,302

11,777

77.0

Area of Work

Budget

Commitment

£'000

%

Corporate Risk Assessment

Condition of building fabric

4,648

73.5

Mechanical services failure

1,309

56.3

Structural collapse

672

44.5

Asbestos

1,064

31.4

Fire including arson

896

55.1

Electrical services failure

1,120

35.6

Legionella

213

9.5

DDA

168

26.7

Other priorities

1,261

31.8

Other Allocations

Joint funded landlord's minor works

964

21.0

Strategic maintenance

528

14.6

Landlord's contributions

398

28.2

County Farms

393

102.0

Other inc. contingency

2,858

21.9

Total

16,492

46.0