Hampshire County Council
	Executive Lead Member for Children's Services (Education)	Item 4
	23 January 2008
	Children's Services capital programme 2008/09 to 2010/11
	Report of the Director of Children's Services and County Treasurer

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 2008/09 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. Recommendations

a) That the capital programme for 2008/09 to 2010/11 as set out in Appendix 1 be approved for submission to Cabinet.

b) That the deferral of schemes and resources totalling £12.962m be approved for submission to Cabinet.

c) That the proposals for the use of unsupported borrowing as set out in paragraph 10.5 be approved for submission to the Cabinet.

d) That the following variations to the 2007/08 capital programme be approved:

i) the addition of resources of £0.205m from Government grant for federating schools and the allocation of this amount to minor works projects at Crescent Primary and Norwood Primary Schools, Eastleigh;

ii) the addition of resources of £1.229m from 14-19 capital grant and the allocation of this sum to 14-19 consortia as follows:

· £0.476m to Basingstoke and Deane;

· £0.100m to Eastleigh;

· £0.653m to Hart and Rushmoor.

iii) the addition of resources of £0.453m from Schools Sustainable Travel Grant and the allocation of this sum to schools listed in Appendix 6 through Schools' Devolved Capital;

iv) the addition of resources of £0.196m from ICT capital grant for mobile technology to support children's social workers and the allocation of this sum to minor works provision;

v) the addition of resources of £0.173m from capital grant for secure accommodation and the allocation of this amount to minor works at Swanwick Lodge Secure Children's Home;

vi) the allocation of additional resources from the sale of land at the former Beech Down Primary School, Basingstoke to the provision for Phase 2 of the children's centres programme;

vii) a revised programme for Schools Access Initiative projects, as set out in Appendix 6 to the report;

viii) a revised programme for Phase 2 of the children's centres programme, as set out in Appendix 5 to the report;

ix) allocation of £0.400m of County Council funding for Phase 2 of the children's centres programme to meet the cost of professional fees for children's centre feasibility studies;

x) individual allocations for a range of projects listed in Appendix 8, agreed by the Director of Children's Services.

e) That the approval of the Executive Member for Policy and Resources be sought for:

i) the addition of resources of £0.625m from the sale of land at Crestwood College for Business and Enterprise, Eastleigh and allocation to the following projects:

· a range of improvements at Crestwood College for Business and Enterprise, Eastleigh at an estimated cost of £0.500m;

· a contribution of £0.125m to provision of a J Track athletics facility at Wyvern College of technology, Fair Oak.

ii) planning consent until 31 December 2011 for a single temporary classroom at Sopley Primary School.

3. Capital programme 2007/08 to 2010/11- schemes supported by Government approvals

3.1 The Children's Services capital programme is based on credit approvals from the Government through the Single Capital Pot, Government grants, capital receipts developers' contributions and local resources. The availability of Government grants and borrowing approvals, together with developers' contributions, is set out in Table 3. Any capital receipts for 2007/08 available to support the Children's Services capital programme will be added to these guidelines with the closure of the 2007/08 accounts.

3.2 Cabinet agreed on 17 December 2007 to continue the restrictions on the use of Government supported borrowing allocations. 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. Cabinet set the provisional limits shown in Table 1 for the use of supported borrowing for Children's Services to reflect the announcements by the Government of its allocations for 2008/09 onwards. For 2008/09 and 2009/10 these reductions are significantly higher than those provisionally indicated when the current year's programme was approved, with proportionately greater impact on the value of the programmes for those years. The reduction is less significant in 2010/11 because of a shift by the DCSF to allocating most NDS funding in that year through capital grant rather than supported borrowing

Table 1

Year	New pupil places	NDS Modernisation	Schools Access Initiative	Reduction	Totals
	£m	£m	£m	£m	£m
2008/09	6.231	7.986	2.447	-6.563	10.101
2009/10	6.231	6.353	2.447	-5.332	9.699
2010/11	6.231	0.524	2.447	-1.760	7.442

3.3 As in previous years, the overall allocation of New Deal for Schools (NDS) funding 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 allocation in 2008/09 is £17.361m of which £7.986m will be for suitability work and £9.375 for condition work.

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

Table 2

Year	Schools devolved capital	Primary Capital Programme	Sure Start capital grant	Extended schools	NDS Modernisation	Other grants	Totals
	£m	£m	£m	£m	£m	£m	£m
2008/09	21.099	6.500	6.869	1.916	0	0.514	36.898
2009/10	21.049	9.447	10.123	2.030	0	3.195	45.844
2010/11	21.049	11.825	7.787	1.049	5.037	8.102	54.849

3.5 On the basis of the position outlined above, resources available for each of the three forward years to 2010/11 are set out in Table 3.

Table 3

	2008/09	2009/10	2010/11	Total
Carry forward from 2007/08	12.962	0	0	12.962
New Pupil Places	6.231	6.231	6.231	18.693
NDS Modernisation	7.986	6.352	5.560	19.898
Schools Access Initiative	2.447	2.447	2.447	7.341
Schools devolved capital	21.099	21.049	21.049	63.197
Developers' contributions	0.381	0	0	0.381
Proposed new prudential borrowing	10.443	7.819	7.400	25.662
Primary Capital Programme	6.500	9.447	11.825	27.772
Corporate resources	0.129	0.129	0.129	0.387
Extended schools grant	1.916	2.030	1.049	4.995
Sure Start capital grant	6.869	10.123	7.787	24.779
Targeted Capital Fund	0	2.000	6.000	8.000
Youth Capital Fund	0.514	0.514	0.514	1.542
Short breaks for families with disabled children	0	0.681	1.588	2.269
Reduction	-6.563	-5.332	-1.760	- 13.655
Totals	70.914	63.490	69.819	204.223

3.6 Resources totalling £12.962m are proposed to be carried forward from 2007/08 to 2008/09. These are set out in detail in paragraphs 15.4 to 15.11.

4. Three year capital allocations 2008/09-2010/11 - overview

4.1 The DCSF announced three year capital allocations from 2008/09 to 2010/11 in October 2007. The County Council has been disadvantaged by a number of changes made in the allocation procedures; detailed guidance on these changes is awaited. The position is set out below.

· New pupil places - There is an increase of 40% in the annual allocations compared to the 2007/08 figure. This is welcome in the context of the number of new primary schools needed to serve new housing developments, but is still some way short of what is required;

· New Deal for Schools Modernisation - There is a significant reduction in the County Council's allocation over the three year period, although there is some transitional protection in 2008/09. This will seriously impair the ability to improve facilities in schools, e.g. temporary classroom replacements and modernisation of specialist facilities such as science laboratories. There will also be a major effect on the Policy and Resources programme for major maintenance of school buildings, which is funded from this source;

· Primary Capital Programme - This programme is intended to improve a substantial proportion of the primary and primary age special school stock over a fifteen year period. The County Council is a Pathfinder authority in 2008/09 (see paragraphs 9.2 to 9.3). New funding is available in 2009/10 (£9.447m) and 2010/11 (£11.825m) to support this programme. Authorities have recently been invited by the DCSF to submit Strategies for Change to access this funding and a report will be submitted during the first half of 2008;

· Schools Access Initiative - allocations continue at a similar level as in the past to support this programme of adapting mainstream schools to meet the requirements of pupils with special needs;

· Extended Schools - This is a new allocation. Guidance from the DCSF on how it can be applied is awaited and further details will be reported when this information is available;

· Children's Centres Phase 3 - A total of £9.644m of capital grant is available over the three years from 2008/09 to 2010/11. Guidance on Phase 3 of the children's centres programme has been issued recently and a report on the proposed approach to implementation will be submitted in the spring of 2008. The allocations include additional sums for capital maintenance of children's centres, which will be made available through the Policy and Resources capital programme;

· Early years capital - This grant is to improve the quality of accommodation in early years and childcare settings, mainly those operated by private providers. £5.045m is available in each of the three years;

· Youth Capital Fund - Funding to develop youth premises continues from 2008/09 to 2010/11, with an annual allocation of £0.514m through capital grant;

· Targeted Capital Fund (TCF) - This funding stream has in the past been available every two years through bidding by authorities for allocations to meet national and local priorities. An overall bidding limit of £12m per authority has been set in recent years. TCF is available to those authorities which have not begun Building Schools for the Future programmes. Future allocations are on a flat rate basis to all authorities, regardless of size: £2m in 2009/10 and £6m in 2010/11. There is no allocation in 2008/09. Guidance is awaited on eligible projects and procedures for accessing the funding. The initial announcement indicates that priority will be given to SEN projects and those to develop 14-19 programmes;

· Transforming short breaks for families with disabled children (£2.269m in total from 2009/10) - This allocation is intended to improve opportunities for families with disabled children to enjoy short breaks. Specific proposals will be brought forward when detailed guidance is available.

4.2 In summary, the approach now being adopted by the DCSF is to target a much greater proportion of available resources at specific national priorities, e.g. children's centres and extended schools, with smaller amounts than in the past being available to fund local priorities through NDS. Of the total resources allocated in 2008/09, some 70% is targeted at specific programmes and 30% through discretionary funding streams such as NDS and new pupil places. As these latter resources are made available through supported borrowing, they are further reduced in real terms because of the reductions arising from the County Council's status as a floor authority.

5. Provision of new pupil places

Primary schools

5.1 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 2007/08 capital programme report in January 2007 and will continue for several years. Further details of the funding implications are given in paragraph 13.2. 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.

5.2 In the context of the localised need for additional primary school places referred to above, the proposed programme for 2008/09 includes a new two form entry primary school to serve the major new housing development at East Anton and for a small extension to Sopley Primary School.

5.3 The cost of new schools is very high proportionate to that of other types of capital work. The need to start work on three new primary schools during the next two financial years will place significant strain on available resources, given the funding constraints outlined above, with the result that the scope to maintain momentum on general improvement programmes, such as New Deal for Schools, is very much reduced.

Secondary schools

5.4 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.

6. Other formulaic allocations

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

New Deal for Schools Modernisation fund

6.2 The DCSF consulted in June 2007 on major changes to its approach to allocating New Deal for Schools (NDS) Modernisation Fund to individual local authorities. In the past these have been based on the DCSF's 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.

6.3 Although guidance on the new allocations is not yet available, it appears that the DCSF has, as suggested in the consultation, changed the allocation methodology to one based on the proportion of each authority's schools which it considered to be modernised, defined as 80% or more of the floor area improved to modern standards. The County Council has pursued a rigorous policy of modernisation in recent years, with the result that a significant number of schools fall into the modernised category, with a consequential negative effect on future years' NDS allocations. Although the majority of investment in recent years has been through NDS and related central Government funding streams, a significant proportion has been through the judicious use of local resources, principally the re-investment of capital receipts. The 2010/11 NDS allocation is some 32% lower than that for 2007/08.

6.4 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.

6.5 Allocations are proposed in the 2008/09 programme for modernisation work in primary and secondary schools and education centres, which will address issues such as inadequate halls, 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 management of falling rolls (£0.550m), health and safety (£0.650m), workforce provision (£0.300m) and the costs of progressing land sales (£0.150m). Allocations for improvements to children's homes (£0.200m) and adaptation of foster carers' homes (£0.150m) are also recommended.

6.6 Recommendations for the allocation of block votes to specific projects will be made early in the programme year.

Schools' devolved formula capital

6.7 An allocation of £21.099m 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 2007/08 are shown for comparison. The DCSF is now using a new allocation formula based on the modernised/

unmodernised approach referred to in paragraph 6.3.

Table 4

	2007/08 £	2008/09
		Modernised schools £	Unmodernised schools £
Per nursery/primary pupil	63.00	63.00	31.50
Per secondary pupil	94.50	94.50	47.25
Per SEN/PRU pupil (special schools and PRUs only for 2008/09))	189.00	189.00	94.50
Lump sum (all schools)	18,500	18,500	9,250

6.8 Officers continue to work closely with schools to ensure that devolved formula capital allocations are spent appropriately 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.

Schools Access Initiative

6.9 The Schools Access Initiative provides borrowing approval to local authorities to increase the accessibility of mainstream schools for pupils with physical and sensory disabilities. An allocation of £2.447m has been confirmed for 2008/09. The recommended programme, however, is £1.600m, as a result of the funding limitations referred to in paragraph 3.2. Proposals for specific projects will be recommended in the spring of 2008.

7. Developers' contributions

7.1 Developers' contributions are an increasing source of resources for the Children's Services capital programme. The current policy for contributions was approved by the Executive Member for Children's Services on 17 May 2007. Contributions fall into three categories:

· where funding for a project has been allocated from the capital programme in advance of the contribution being received. The receipt is therefore repaying past expenditure and is available to add to the current year's cash limit;

· where funding has been borrowed through the School Balances Loan Scheme or the Prudential Code to enable a project to begin in advance of the contribution being received. The receipt is used to repay borrowing;

· where funding is available for a specific project, to be identified, within the area of the housing development to which the contribution relates.

7.2 A number of developers' contributions have been received during the current financial year and are shown in Appendix 3, which also indicates how they are to be applied. Funding of £0.517m is available to be added to the 2007/08 cash limit and is included in the resources recommended to be carried forward to 2008/09; £1.200m will be used to offset approved borrowing and £0.381m will be added to the 2008/09 cash limit to fund projects to be identified.

7.3 Developers' contributions anticipated for future projects are set out in Section 10.

8. Capital funding for early years and childcare

8.1 Allocations through capital grant for the provision of Phase 3 of the children's centres programme and to facilitate the improvement of existing childcare provision have been made for each of the three forward years. The resources available for early years and extended schools provision are summarised in Table 5. Specific expenditure proposals will be submitted during 2008.

Table 5

	2008/09	2009/10	2010/11	Totals
	£m
Children's centres Phase 3	1.824	5.078	2.742	9.644
Early years and childcare	5.045	5.045	5.045	15.135
Totals	6.869	10.123	7.787	24.779

9. Primary Capital Programme projects

9.1 As reported on 17 July 2007, the County Council is a Pathfinder authority for the Government's Primary Capital Programme (PCP). This is a new grant funded resource stream intended to pay for far-reaching improvements to primary schools over a period of up to fifteen years.

2008/09 programme

9.2 The Pathfinder funding of £6.500m is available in 2008/09 and is to be allocated to a number of projects in the Andover area, in accordance with the County Council's submission to the DCSF for nomination as a Pathfinder authority. Further design and costing work has been carried out in recent months and recommendations for specific expenditure can now be made.

9.3 A feature of the PCP approach is to encourage the use of a range of funding streams to add value to the basic allocation and this approach has been adopted in planning the investment programme. Table 6 sets out the funding sources and Table 7 the proposed expenditure.

9.4 As the County Council's existing lease of education centre accommodation from Andover College expires at the end of June 2008 it is necessary to begin adaptation work on the Shepherds Spring Junior School building for use as the new education centre at Easter 2008. Pupils will be moving at that time into the Shepherds Spring Infant building and some adaptation work to the latter will be necessary; in view of the scale of this work it will be approved under delegated authority by the Director of Children's Services. About £0.900m of the expenditure on the new education centre will be funded from capital receipts and prudential borrowing will be necessary in advance of the funding becoming available. Normally, expenditure would not be incurred in these circumstances until Secretary of State's approval to disposal of the surplus land and outline planning permission for residential development had been obtained. This would, however, mean an unacceptable delay to the adaptation work, which would result either in very high costs for temporary buildings, or an unacceptably long period when facilities were unavailable. There is no reason to believe that either disposal consent or planning consent will not be forthcoming and, in view of the urgency, it is proposed to proceed with the work and seek borrowing approval in advance of the normal approvals having been obtained. If disposal could not be achieved, the cost would need to be met from other capital programme resources.

Table 6

Funding source	£m
Primary Capital Programme Pathfinder	6.500
Capital receipts from sale of land at Shepherd's Spring, Roman Way Primary and Abbotts Ann Primary Schools	4.950
Schools devolved capital	0.563
Capital programme provision for children's centres	0.600
Capital programme NDS provision	1.277
	13.890

Table 7

Proposed project expenditure	£m
Abbotts Ann Primary - new school buildings	4.100
Knights Enham Infant and Junior Schools	4.250
Roman Way Primary School	1.540
Andover Education Centre - re-provision	2.150
Andover Children's Centre	1.850
Total	TBC 13.890

2009/10 and 2010/11 programmes

9.4 Guidance has recently been received from the DCSF about arrangements for accessing the allocations to be made available for 2009/10 and 2010/11. Proposals for projects to be included in the capital programmes for those years will be brought forward during 2008.

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

10.1 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.

10.2 Such borrowing is necessary to provide new school places at the appropriate time and to allow projects such as provision of new children's centres and education centres, 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.

10.3 To date £4.282m has been borrowed under the School Balances Loan Scheme and by the end of 2007/08 £0.406m will have been repaid; the remainder of the borrowing is scheduled for repayment by 2009/10.

10.4 For schemes starting in 2004/05, 2005/06 and 2006/07 £22.069m has been borrowed through the Prudential Code; £5.803m of this amount has been repaid to date, with the rest due for repayment in 2008/09. Borrowing of £17.017m was approved for the 2007/08 programme.

10.5 Proposed borrowing totalling £10.443m is included in the recommended cash limit for the 2008/09 capital programme. Table 8 summarises the projects in the 2008/09 capital programme to be subject to future approval of borrowing.

Table 8

Project	Borrowing against
East Anton Primary School, Andover	Developers' contributions
Abbotts Ann Primary School	Capital receipt
Knights Enham Infant and Junior Schools, Andover	Capital receipt
Roman Way Primary School, Andover	Capital receipt
Andover Education Centre	Capital receipt

10.6 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.

10.7 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 2008/09 programme to meet continuing and anticipated borrowing costs. The amount included is £1.000m.

11. Capital programme 2008/09 to 2010/11

11.1 The total amount available to fund starts in 2008/09 is £70.914m. Table 3 in paragraph 3.5 illustrates how this sum is arrived at.

11.2 On the basis of the position outlined above, the total value of the capital programmes submitted for consideration for the three years to 2010/11 are shown in Table 9.

Table 9

		Schemes within locally resourced guidelines	Additional schemes funded within the prudential framework	Schemes supported by Government allocations	Total
		£m	£m	£m	£m
	2008/09	0.129	10.443	46.999	57.571
	2009/10	0.129	7.819	55.542	63.490
	2010/11	0.129	7.400	62.290	69.819
	Note:	The above figures are net of developers' contributions and exclude the costs of land for programme schemes which are dealt with outside the guidelines.

11.3 The proposed three year capital programme is attached as Appendix 1. The 2008/09 programme totals £70.914m and includes provision for contingency and furniture and equipment allocations. The total value of the capital programmes submitted for consideration for the three years to 2010/11 is shown in Table 10.

Table 10

	Children's Services £'m
2007/08 (current)		(for information)
2008/09	70.914
2009/10	63.490
2010/11	69.819
Totals	204.223

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

12. 2009/10 to 2010/11 guidelines

12.1 As indicated above, it is possible to fund those schemes where starts need to be made in 2008/09. The indicative resources available in 2009/10 total £63.490m and are summarised in Table 11. This table assumes that the split between NDS suitability and condition funding is the same in 2009/10 as in 2008/09. The split is subject to Executive Members' decisions, so the totals may vary.

Table 11

	£'m
New pupil places	6.231
NDS modernisation	6.352
Schools devolved formula capital	21.049
Schools Access Initiative	2.447
Primary Capital Programme	9.447
Sure Start Capital Grant	10.123
Extended Schools grant	2.030
Targeted Capital Fund	2.000
Youth Capital Fund	0.514
Short breaks for families with disabled children	0.681
Proposed prudential borrowing	7.819
Local resources	0.129
Reduction	-5.332
Total	63.490

13. Pressures on the capital programme

13.1 There are sufficient resources available to fund all the schemes which need to be started in 2008/09. The position for 2009/10 and following years, however, is difficult because of the combination of:

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

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

· the need to fund the cost of new primary schools to serve major housing.

13.2 A significant amount of expenditure on projects to provide new pupil places 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 12 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 12 shows the best currently available information.

Table 12

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

13.3 The estimated average cost of a new one-form entry primary school is about £5.7m and of a one-form extension to an existing primary 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 £40m, of which about 60% is expected to be available from developers' contributions. The remaining cost will need to be met from New Pupil Places allocations, which total about £19m, but will in practice be reduced because they are funded through supported borrowing. 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.

14. Revenue Implications

14.1 The revenue implications of the proposed capital programme are shown in Table 13.

Table 13

Schemes within the guidelines	Full Year Cost
	Current expenditure £m	Capital Charges £m
2008/09	0.160	1.288
2009/10	0.160	1.135
2010/11	0.160	1.247
Totals	0.480	3.670

14.2 The total revenue implications for the three years of the starts programme, including capital charges, represent a real term increase of 0.4% over the 2007/08 original budget of this service.

14.3 Part of the current expenditure costs, £0.160m, will be incurred in 2008/09. 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.

15. Issues relating to the 2007/08 capital programme

Project deferrals

15.1 It will not be possible, mainly because of changes in the scope, brief or programming of projects, to start the schemes listed in Table 14 during 2007/08. It is proposed, therefore, to defer them, with their resources, to 2008/09. The amounts shown in Table 14 are the contributions to project costs from the Children's Services capital programme rather than the full estimated costs of schemes.

Table 14

Project	£m
Named projects
Andover Children's Centre	1.850
Basingstoke School Plus	4.000
Elvetham Heath Primary School, Fleet	3.100
Primary school improvements in the Fareham Western Wards	1.327
Stanmore Primary School, Winchester	0.291
Secondary school improvements	1.115
Schools Access Initiative	0.412
Funding allocations
Developers' contributions	0.517
Contingency	0.350
Total	12.962

15.2 In total, therefore, it is proposed to carry forward resources of £12.962m from 2007/08 to 2008/09.

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

Andover Children's Centre

15.4 As this centre will be located in Shepherd's Spring Infant School, it will not be possible to start building work until the school closes at the end of the summer term 2008.

Basingstoke School Plus

15.5 The 2007/08 capital programme includes a sum of £4.250m to improve provision at Basingstoke School Plus and in particular to provide alternative accommodation for the inadequate buildings on the Ashwood site. A report elsewhere on this agenda sets out the future strategy for Basingstoke School Plus in the context of the proposed Education Improvement Partnership (EIP). Following discussions with Basingstoke secondary headteachers and other partners in the area, proposals are currently being considered for adaptations to a number of secondary schools to re-provide in more appropriate settings for those pupils currently on the Ashwood site. In addition, it is proposed to carry out a range of improvements to the Pack Lane building, for which £0.250m for initial health and safety works was approved on 17 July 2007. Project feasibility work is currently in hand and a further report will be submitted once costed proposals are available. It is recommended that £4.000m is carried forward to 2008/09; £0.500m of this amount relates to an anticipated capital receipt and was included in the 2007/08 programme subject to approval of borrowing through the SBLF or Prudential Code.

Elvetham Heath Primary School, Fleet

15.6 Negotiations have continued with Hart District Council and the adjoining landowner to secure land for a playing field to allow the extension to begin. These negotiations are now nearing a conclusion and it is expected that work will start in summer 2008. The provision carried forward (£3.100m) has been increased in the proposed 2008/09 programme to £3.531m to allow for inflation and changes to specifications.

Primary school improvements in Fareham Western Wards

15.7 The 2007/08 capital programme includes £1.438m towards the cost of a planned new primary school to serve the Whiteley area, Fareham. As reported on 2 April 2007, it is not now possible to proceed with this project because, in spite of extensive efforts, a suitable site for the school could not be found. Abortive design fees of £0.111m were approved on 2 April 2007, leaving £1.327m available for investment in primary school provision in the area, Primary age children living in Whiteley and unable to gain entry to Whiteley Primary School are offered places in schools in the Fareham Western Wards and following discussions with local schools, feasibility work in is hand to carry out improvement work to three schools in this area. It is recommended, therefore that resources of £1.327m are carried forward to 2008/09 and specific project proposals will be brought forward in the spring of 2008.

Stanmore Primary School, Winchester

15.8 The 2007/08 programme includes £0.291m to replace a temporary building in very poor condition used as a dining hall at Stanmore Primary School. A new headteacher was appointed during 2007 and has asked for a number of changes to the proposed scheme to be considered. Feasibility work has indicated that the provision in the budget will be insufficient to deliver a viable project and it is recommended that the provision carried forward to 2008/09 should be increased to £0.450m. A substantial contribution will be made by the school.

Secondary school science and CDT improvements

15.9 Starts on site at nine schools are scheduled for June 2008 and provision for these projects (£1.115m) needs to be carried forward.

Schools Access Initiative

15.10 Provision of £0.365m is included in the 2007/08 programme to carry out improvements at schools with facilities for children with hearing impairments. As the review of this provision has only recently been completed, projects have still to be identified. It is recommended that this provision, together with £0.062m for a project at Haven Children's Centre, Gosport, to provide an accessible toilet and hygiene room, is carried forward to 2008/09.

2007/08 contingency

15.11 To increase resources available in 2008/09 it is recommended that £0.350m of the current year's contingency, is carried forward, which will leave £0.794m available for the remainder of 2007/08.

Crescent Primary/Norwood Primary Schools, Eastleigh - federation grant

15.12 An allocation of £0.205m has been made by the DCSF to Crescent Primary and Norwood Primary Schools, Eastleigh, which are federating. Resources are made available following bids against a discrete budget to fund capital costs arising from federation. These are principally to cover ICT expenditure, but can also be used to fund adaptations to improve the schools' environments and in particular staff facilities. It is recommended that resources of £0.205m are added to the minor works provision in the 2007/08 capital programme.

ICT capital grant for mobile technology to support children's social workers

15.13 This grant of £0.196m is to support employers to invest in improved mobile ICT infrastructures, including broadband access and equipment such as laptops and Personal Digital Assistants (PDAs) for children's social workers. This investment is intended to help to improve business processes, and so bring benefits such as improved workload management and better use of time for children's social workers.

15.14 Work is currently in hand to apply this funding in ways which will produce improvements which will avoid ongoing additional revenue funding.  The intention therefore is to explore the extent to which IT can be used in ways that free up other resources and in consequence provides sustainability, such as more cost-effective use of accommodation or administrative support., from reduced travel costs or time, or increased productivity. The intention is to use a product called SWIFT Practitioner Profile, which enables social care workers to download case material from SWIFT, work with it in the field, and upload changes to the main SWIFT system when and where convenient. It is intended to provide a mixture of laptop and tablet computers to a group of front-line staff who are keen to use IT to ensure that  the potential is fully understood and exploited. It is recommended that resources of £0.196m are added to the minor works provision in the 2007/08 capital programme.

Swanwick Lodge Secure Children's Home

15.15. A grant of £0.173m has been received from the DCSF to fund refurbishment of the home's music studio and facilities for science and trade skills. It is recommended that this sum is added to the provision for minor works in the 2007/08 programme.

Children's centres programme - Phase 2

15.16 A revised budget for the development of Phase 2 of the children's centres programme was approved on 17 July 2007. Approval was also given to the procurement arrangements necessary to deliver the programme to meet DCSF deadlines for designation and availability of capital grant. Procurement is now well advanced and work has been completed or is in hand on a number of sites.

15.17 Affording the necessary building programme has always been problematic, but current indications are that the budget identified is sufficient to meet estimated costs.

15.18 There is, however, a further source of funding which it is recommended is added to the provision for this programme. This is a proportion of the anticipated capital receipt from the sale of the former Beech Down Primary School, Basingstoke. On 7 December 2007 the Executive Member for Policy and Resources approved the use of this receipt to meet 100% of the estimated costs of improving the pre-school provision on the former primary school site, which will also act as an outreach base for the nearby children's centre at Manor Field Infant School.

15.19 Capital funding for Phase 2 of the children's centres programme is from three sources:

· General Sure Start Capital Grant (GSSG) (£20.310m);

· other resources within the Children's Services capital programme (£6.119m);

· contributions from schools (£0.200m).

(These amounts include the additional funding from anticipated capital receipt referred to in paragraph 15.17)

15.20 The funding available for professional fees through GSSG is limited to 15% and makes no allowance for feasibility work, which is very extensive given the number of new schemes involved in the children's centres project. In addition, there has been some abortive work where projects have been initiated and feasibility work carried out, but hosts have subsequently decided not to proceed, or where the feasibility has indicated that the project would not be practicable or affordable. Feasibility work is always valuable in order to have clarity of scope, brief and cost to move forward with a firm foundation. The average cost of around £0.010m per project, including all necessary surveys, architectural and cost consultants' work, represents good value and compares well with many other capital projects.

15.21 Feasibility work carried out in support of the children's centres programmes totals in excess of £0.450m, but some of the cost has been absorbed. In order to reimburse the bulk of these costs it is recommended that funding from the County Council's contributions to the programme is used and that £0.400m is applied for this purpose. The current budgetary provision is estimated to be sufficient to cover the costs of the programme after this expenditure has been incurred, but the position will be closely monitored and reviewed at the close of 2007/08 accounts.

15.22 Appendix 5 summarises the budgetary provision, funding sources and estimated costs of Phase 2 children's centres projects. Further updates will be included in future reports.

Schools Access Initiative - revised 2007/08 programme

15.23 A revised programme for investment through the Schools Access Initiative is attached at Appendix 6.

Capital grants to support 14-19 Gateway 1 consortia

15.24 Grant allocations have been received from the DCSF to fund 14-19 capital developments in support of diploma delivery. The allocations were made to individual 14-19 consortia, but for accounting purposes need to be added to the Children's Services capital programme. The amounts involved and the purposes for which they are allocated are shown in Table 15.

Table 15

Consortium	Purpose	Amount of allocation £m
Basingstoke	Virtual Learning Environment	0.476
Eastleigh	Engineering diploma	0.100
Hart and Rushmoor	Infrastructure and facilities for IT diploma	0.653
Total		1.229

15.25 It is recommended that resources of £1.229m are added to the 2007/08 capital programme to fund works in the Basingstoke, Eastleigh and Hart and Rushmoor 14-19 consortia.

Schools Sustainable Travel Grant allocations 2007/08

15.26 The DCSF has made a fourth round of capital allocations to a number of schools which have School Travel Plans (STPs) authorised and in place by 31 March 2007. The grant is intended to help schools to support sustainable travel to school and DCFS expects the funding to be spent on measures identified in their STPs, such as secure cycle parking, lockers and bus bays. The grant is payable at the following rates:

· primary schools: £3,750 per school, plus £5 per pupil

· secondary schools: £5,000 per school, plus £5 per pupil

15.27 Grant is paid as an addition to schools devolved capital and the amount allocated to Hampshire in 2007/08 is £0.453m. A list of schools receiving the grant is shown in Appendix 7.

15.28 It is recommended that the sum of £0.453m is added to resources for schools' devolved capital allocations for 2007/08.

Capital receipt from the sale of land at Crestwood College for Business and Enterprise, Eastleigh

15.29 A major project to improve sports and other curriculum facilities was recently completed at the College. The funding source was a capital receipt from the sale of surplus College land for residential development. Secretary of State's consent to this disposal requires that all funds arising from the land sale must be spent on sports or education related projects at schools.

15.30 Following completion of the sale at Crestwood and completion of the major project to provide a new sports hall, fitness suite, drama studio and all-weather pitch, there remains a balance of £0.985m available to commit to other projects at the College and other schools in the county that would benefit from enhanced sports developments for students and local communities.

15.31 The decision on how to allocate this additional funding rests with the Executive Member for Policy and Resources, as receipts over and above those required to complete related projects accrue to Policy and Resources rather than to individual services' capital programmes. Recommendations are being made to the Executive Member for Policy and Resources that part of the receipt should be used as indicated below and as a result it is recommended that additional resources are added to the 2008/09 programme.

Crestwood College for Business and Enterprise

15.32 There is an opportunity to further improve facilities at the College by enhancing the external areas provision to include improvement to the netball facilities by enhancing the existing hard play area, vehicular access, additional parking and drop-off, footpaths, landscaping and drainage.

15.33 The current estimated cost of these works is £0.500m and it is recommended that a major project at Crestwood College is included in the 2007/08 capital programme.

Wyvern Technology College, Fair Oak

15.34 An opportunity exists for the County Council to contribute to a project to provide a new sports facility at this College. It is proposed to construct a new `J Track' (running track) and jumping complex which will be the first of its kind in the county. This will benefit a number of schools in the Eastleigh and Fair Oak areas, together with the local community. The estimated cost of the scheme is £0.450m and it is recommended £0.125m of the balance available from the Crestwood receipt is contributed to the cost of this project. The remaining funding is being jointly provided by the College, Eastleigh Borough Council and the parish councils, together with a contribution from Land Fill Tax. It is recommended that £0.125m is added to the minor works provision in the 2007/08 programme

Action taken by the Director of Children's Services

15.35 Under delegated powers, and following consultation with the Executive Lead Member for Children's Services (Education) and Executive Member for Children and Families as appropriate, the action set out in Appendix 8 has been taken and it is recommended that formal approval is now given to the allocations listed.

16. Summary position for 2007/08

16.1 Resources totalling £93.993 million have been allocated to the 2007/08 starts programme. Of this total, £27.4 million relates to block allocations for schools' devolved formula capital, Schools Access Initiative, furniture & equipment, and contingency, leaving £66.6 million for specifically identified schemes.

17. Building cost inflation

17.1 Tender price inflation for building work still continues to be significantly in excess of other national inflation annual increases. Published indices by BERR (formerly the DTI) for the year from November 2007 to November 2008, around which the capital programme is based, are predicting a 5.2% increase. This represents a slight reduction in the average percentage increases over recent years of around 6% to 7%. However, the provisional indices suggest there was a significant upward movement in tender prices during the second quarter of 2007. As this is still a prediction, we will need to wait to see the firm outcomes and resultant impact on the construction market. The impact of the forthcoming 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 5.5% - 6.5% annually over the next few years.

17.2 To put this into some context, national building costs have increased by nearly 40% in the last five years. To help mitigate this, the Acting Director of Property, Business and Regulatory Services continues to develop innovative procurement strategies that reduce risk and uncertainty for the contractors and, through a number of local and regional framework arrangements, secure the resources the County Council requires, whilst still retaining value for money and ensuring a high quality of product. It should be noted that capital allocations from the DCSF contain no provision for inflation.

18. Temporary classrooms

Sopley Primary School

18.1 This school has four classrooms, one of which has been created by using an old cloaks area and is used by YR pupils. The other three classrooms are 45m² and are large enough for only 27 pupils in each space. The ICT suite is 25m², which is too small to accommodate a full class of pupils and the school has an undersized hall of 60m². The number on roll at the school is currently 93 and forecasts show this to be sustained for the future.

18.2 A development plan has been produced which shows how the school could be extended in permanent accommodation provision for this has been included in the proposed 2008/09 capital programme.

18.3 It is recommended that a single temporary classroom be placed on site to help alleviate the space pressure for the school, whist at the same time allowing the

Yr R space to be opened up as a multi-purpose area for use as a resource space, library and SEN area. This unit would remain on site until the permanent accommodation is provided.

19. County Council Policy Requirements

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

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

19.3 Personnel implications - None directly arising from this report.

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

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

Impact assessment

19.6 The proposals in this report are derived from the departmental service plans and central government policies and are in accordance with the budget strategy and the County Council's financial management policy. An impact assessment of the departmental service plans and the financial management policy has been carried out and the proposals in this report are not considered to be discriminatory.

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:

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.