Contact: Ian Lawson (School Organisation Officer); Telephone: 01962 846350; e-mail: [email protected]

1 Summary

1.1 This report seeks approval to the 2008 revision of the guidelines for obtaining developers' contributions towards children's services facilities, in the light of new duties and responsibilities and a more realistic estimate of the financial impact of new housing development.

2 Recommendations

1. That the document "Developers' Contributions towards Children's Services Facilities - July 2008" be approved and used to form the basis of discussions with district and borough councils, as well as negotiations with developers.

2. That the Director of Children's Services be authorised to revise this document each year to take account of increases in building costs, following advice from the Director of Property, Business and Regulatory Services.

3 Developers' Contributions

3.1 Financial contributions from developers form a significant proportion of the capital available for building new schools, and other facilities, in areas where housing development places pressure on existing children's services facilities. Some £3 million was received during 2007/08 and this will increase as Major Development Areas in Andover, Basingstoke and West of Waterlooville come on stream.

3.2 Contributions are negotiated as part of the process leading to the granting of planning permission for development. There are no set standards for the amount sought, but the most recent central government guidance suggests that a contribution is reasonable if it can be demonstrated that it is related to the impact of the development on the service concerned.

3.3 A document setting out the County Council's approach to contributions towards education facilities was approved by the Executive Member for Children's Services in May 2007 and this forms the basis of current negotiations with developers, either directly or in partnership with the district and borough councils. This includes references to reflect the wider responsibilities of the Children's Services Department, especially in relation to the duty to secure the availability of sufficient childcare places and to the provision of children's centres.

3.4 The amounts sought need to be updated annually to take account of increases in building costs. Up to 2006, the formula used for calculating a reasonable level of contributions was based on "cost multipliers" published by the DfES. Recent experience of new school projects has shown that these do not reflect the true cost of building schools in Hampshire. Consequently, officers in the Children's Services Department and quantity surveyors in Property, Business and Regulatory Services have undertaken a detailed analysis of actual projects, from which realistic, and defensible, costs per place have been derived. These are incorporated into the contributions guidance. The 2008 revision is appended to this report.

3.5 As well as updating costs, the opportunity has been taken to revise the text to clarify two issues that have been the subject of challenge by developers:

· The 2007 revision quoted a range for the pupil yield from new housing. This was intended to allow for situations where the range of dwelling sizes is not known at the time the contribution is negotiated, but where the developers sought certainty as to their financial liability when negotiating the price for the land. However, quoting a range has resulted in challenge from developers who, understandably, claim that their development should contribute at the lower end of the range. Using experience from actual negotiations during 2007/08, the 2008 revision only gives single pupil yield factors for primary and secondary places, and explains that this only applies to "eligible dwellings" - which are all dwellings with two or more bedrooms, excluding those specifically for elderly persons.

· Developers often argue that the number of unfilled places at schools in the area should be deducted when determining the number of additional places required as a result of their development. Whilst this is not an unreasonable argument, in reality the actual number of unfilled places will fluctuate. It is also accepted by the Audit Commission that not all unfilled places in a school are surplus places, but that some margin of capacity is necessary to allow for variation in parental preference and to allow for differences in the size of individual cohorts. Whilst no specific margin is suggested by the Audit Commission it is proposed that, for the purpose of calculating developers' contributions, the County Council should consider that a school is full when it has less than 5% of its places unfilled.

3.6 Once approved, this guidance will form the basis of discussions with district and borough councils, who are preparing their own policy and implementation guidelines as part of their emerging Local Development Frameworks. In the short term, this will back up negotiations with developers. In the longer term, central government initiatives may replace the current contributions regime with a "Community Infrastructure Levy" or similar mechanisms adopted by local planning authorities. As these local policies emerge, these will incorporate policies relating to County Council requirements. Now that there is a robust policy for Children's Services contributions, it should only be necessary to regularly revise the financial calculations. In that event, it is recommended that the Director of Children's Services be authorised to publish revised figures each year to take account of increases in building costs, following advice from the Director of Property, Business and Regulatory Service.

4 County Council priorities

4.1 The proposals in this report support the County Council's corporate priority "Enhancing our quality of place" by providing a framework to secure that school places are provided where demand arises and that the community benefits form the uplift in land values that accrue when residential development is permitted.

4.2 It also supports the Five Outcomes of the Children Act as follows:

· Being healthy: as the proposal provides school places within easy walking distance from the homes of the children in new development

· Staying safe: as the building projects will include appropriate measures within the "Safer routes to school" programme

· Enjoying and achieving: by providing a high standard of education in suitable buildings

· Making a positive contribution: by providing facilities that can be used by the whole community

· Economic wellbeing: by providing equality of educational opportunities for all those living in the neighbourhoods served by the schools.

5 Consultation

5.1 As explained in paragraph 3.6, the revised policy statement will form the basis for consultation with interested parties, including district and borough councils.

6 Legal implications

6.1 The principles in the document accord with the framework in current central government guidance.

7 Financial implications

7.1 The revised contribution figures should increase the capital resources available for new, and extended, school buildings. This is difficult to quantify as it depends on the rate of progress of housing development.

8 Personnel implications

8.1 None.

9 Impact assessment

9.1 Race and equality impact assessment has been considered in the development of this report and no adverse impact has been identified.

10 Crime prevention issues

10.1 This proposal does not raise any crime prevention issues.

11 Conclusion

11.1 It is recommended that the revised contributions guidance, as appended to this report, be approved and that this should form the basis of discussions with district and borough councils, as well as negotiations with developers, and that the Director of Children's Services should be authorised to revise the document each year to take account of increases in building costs.

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.

Calculation of costs of building projects - June 2008.

Appendix

Developers' Contributions towards Children's Services Facilities

This document sets out the principles to be applied to all negotiations. Details are subject to review in the context of changes to local and national policies and priorities

Children's Services Department July 2008

The Castle

Winchester

Hampshire SO23 8UG

1. Introduction

1.1 In line with central government guidance on developers' contributions given in ODPM Circular 05/2005, the County Council expects developers' contributions to meet the cost of children's services facilities required as a direct consequence of development. The purpose of this document is to establish consistent, and open, criteria so that Local Planning Authorities and Developers can make informed decisions. Children's services facilities include primary and secondary schools, provision for children with special educational needs and facilities to support young children and their families.

2. When are contributions required?

2.1 With the emphasis on sites identified in Urban Capacity Studies and greater use of brownfield sites, it is likely that there will be more reliance on smaller sites to meet housing targets. Consequently, District and Borough Planning Departments are expected to consult Hampshire Children's Services Department on any planning proposals relating to a development of 10 dwellings or more. This consultation should take place when sites are allocated in local development frameworks, when development briefs are published and when planning applications are received. This should also be part of pre-application / scoping discussions so that developers are aware of the specific requirement for a contribution from the outset.

2.2 Where the availability of school places is particularly critical, contributions will be sought in relation to each additional dwelling. These areas will be agreed with individual local planning authorities.

2.3 In order to satisfy the requirement in Circular 05/2005, the County Council will make an assessment of the extent of capacity in schools in the immediate area. This will indicate the extent to which additional capacity will be required to cater for the additional demand. This can be referred to as the "sufficiency" factor. It is the County Council's policy that new primary schools be provided within major new housing areas, where justified by the number of children likely to be living there when the development is complete. Where the additional demand is not enough for a new school, in the interests of integrating new development into existing communities and to promote sustainability principles relating to reducing reliance on the motor car, it is expected that a new development will be served by its nearest schools.

2.4 It is accepted by the Audit Commission¹ that not all unfilled places in a school are surplus places, but that some margin of capacity is necessary to allow parents choice, given that there will be volatility in preferences from one year to the next, and to allow for differences in the size of individual cohorts. Whilst no specific margin is suggested by the Audit Commission, the County Council's position is that a school should be considered as full when it has less than 5% of its places unfilled.

2.5 Taking this into account, in those cases where there will be a shortfall in places to meet the assessed demand the amount of contribution can be calculated in accordance with the formula set out in paragraph 5.2 below.

2.6 Even where there is apparently sufficient capacity to cater for all, or part, of the additional demand, there may still be a need for additional facilities at a school. The reason for this is that the method of assessing capacity does not take full account of the need for schools to have dedicated space for specialist facilities, such as ICT (Information and Communications Technology). Also, the inclusion of children with special educational needs in mainstream schools means that schools need spaces which can be used for individual or small group teaching, which is unlikely to have been provided in the original room allocations. In other words, schools which have theoretical spare capacity will be using those spaces for legitimate educational uses, which will need to be rehoused before those teaching spaces can be brought back into use for general class use. There may also be factors, such as an undersized hall, which would mean that it would be difficult to meet present day educational requirements if the school was full to its assessed capacity. These can be referred to as "suitability" issues.

2.7 Suitability issues are assessed as part of the Asset Management Plan for the school. Developers' contributions will be expected where it is necessary to remove limitations so that existing nominal capacity can be fully used to meet additional demand from a development. The cost of alleviation will vary.

3. School sites

3.1 Where a new school is required to cater for new development, the County Council will expect the developer to provide, within the required timescales, a cleared, fully serviced and accessible site free of charge, in addition to the normal level of contributions towards school buildings. The Children's Services Department needs to be consulted early in any master planning of such developments to ensure that any proposed school sites are appropriate and suitable for its requirements.

3.2 The actual site required for a new school will depend on several factors, including location, access, shape, topography and the relationship with adjacent community and other land uses. As a general principle, the minimum useable areas should be as follows:

1 Form entry primary (210 places): 1.2 hectares

2 Form entry primary (420 places): 2.0 hectares

3 Form entry primary (630 places): 2.8 hectares

Additional land may be required where it is necessary to provide additional facilities, such as a Children's Centre, co-located with the school.

The areas required for new secondary schools will depend on the size of school proposed.

3.3 Where a large development is shared between several developers, it may be appropriate to make provision in the Section 106 agreements so that the burden falls on all those involved. If this is the case, it will be necessary to discuss the exact mechanism that is applicable.

3.4 There may be cases where a new school is proposed within a new development, but the optimum location, once the development is completed, cannot be provided with access and/or services by the time that the school is required. In such cases, it will be necessary for the developer to make a site available on which a temporary school can be provided, in which case the cost of the temporary buildings, access and services would also need to be met by the developer in addition to the normal level of contributions.

4. How many places are required?

4.1 In order to assess the long term demand arising from a new development, the Children's Services Department uses the following factors:

Primary Schools (ages 4 to 11) - 0.30 children per dwelling

Secondary Schools (ages 11 to 16) - 0.21 children per dwelling

The lower secondary factor is because secondary schools cater for five year groups, compared with seven for primary schools.

4.2 These factors apply to all dwellings with two or more bedrooms, excluding those specifically for elderly persons (dwellings expected to make education contributions can be referred to as "eligible dwellings"). It is not appropriate to make any deduction in respect of "social" or "affordable" housing, as these will still increase the overall number of dwellings in an area which can be occupied by families with children

5. What level of contribution is required?

5.1 In cases where a sufficiency factor has been identified, the actual cost of providing additional places will vary with the individual school, depending on factors such as the type of building and actual site characteristics.

5.2 In order to provide a guideline figure, a detailed analysis has been undertaken, based on actual projects designed and tendered in recent years. From this the following costs per place are indicated, at April 2008 prices (PUBSEC Index 197):

Primary schools : New Schools - £20,364 per pupil place

This cost per place for new primary schools is based on a two form entry (420 place) school and takes into account the need for core facilities (such as a hall, library, music / drama room, offices and staffroom) that are required in addition to the basic classroom spaces. The exact requirement will need to be determined when development details are being formulated. A significantly higher cost per place will apply in situations where a school other than two form entry is indicated, or where a school will need to be significantly enlarged. Developers should, therefore, consult the Children's Services Department for a detailed assessment in relation to any development of more than 100 eligible dwellings.

Primary schools : Small extensions to schools - £16,196 per pupil place

This figure for small extensions only applies to developments of 100 eligible dwellings or less.

Secondary schools : Extensions - £25,280 per pupil place

A site specific calculation will be necessary if development requires the provision of a new secondary school or if the development is in an area where secondary schools cater for the 11-18 age range.

5.3 Applying these cost multipliers to the numbers of additional children expected from new housing, the following level of contribution is derived:

Primary Education, where a new school is required - a minimum of £6,109 per eligible dwelling

Primary Education, for small extensions only - £4,859 per eligible dwelling

Secondary Education, for extensions - £5,309 per eligible dwelling

5.4 As mentioned in paragraph 2.6, the cost of alleviating suitability factors will vary, depending on individual circumstances. The Asset Management Plan allocates ratings to individual schools. Each teaching space is placed in one of four categories - A to D - in descending order of adverse impact. For the purpose of calculating an appropriate level of contributions, in those cases where part of the demand has to be met within the existing capacity of a school where 30% or more of the teaching spaces are in Categories A or B, a contribution level of 50% of the figures in paragraph 5.2 will apply.

5.5 Where a specific facility can be identified and costed, for example where a primary school lacks an adequate school hall, the contribution will be based on the projected cost.

6. Special educational needs

6.1 Wherever possible, children with special educational needs are educated in mainstream schools. For some specific needs, it is appropriate to provide additional resources and, in a small number of cases, to provide places in special schools or education centres.

6.2 Larger developments may generate a need for additional facilities. This can only be determined by the assessment of individual situations. As a guideline, an appropriate level of additional contribution is £83 per eligible dwelling for primary provision and £154 per eligible dwelling for secondary provision.

7. Contributions towards other children's services facilities

7.1 In addition to the provision of schools for children of statutory school age, the County Council has a duty to ensure that there is adequate provision for pre-school education and childcare (although not normally as a provider itself). Traditionally, pre-school playgroups have been considered as potential users of community buildings. However, with the increasing requirements for facilities and numbers of sessions that have to be offered, there is a trend towards pre-school providers looking for exclusive use of space. This will also facilitate the establishment of full day care and after school clubs.

7.2 The County Council expects local planning authorities to bear this in mind in considering allocations of space for, and contributions towards the cost of providing, community facilities within any new development. The Children's Services Department can provide a calculation to assess the appropriate level of demand for pre-school facilities.

7.3 As part of the Change for Children agenda, it is government and County Council policy to establish a network of Children's Centres. These will operate as one-stop shops for children and their parents and carers, working with local providers to secure combined pre-school education, childcare and health services. The first wave of centres are being provided in disadvantaged areas, but eventually all children and their families will have access to such a centre within a reasonable distance from home. In most cases, new housing will be within reach of a centre, but the long term population of large developments may require their own provision, or additional capacity at existing centres. It is, therefore, expected that developers will make a contribution of £110 per eligible dwelling towards the capital costs of establishing or extending the Children's Centre serving the development.

7.4 In large developments there may also be a requirement for facilities for the Youth Service. This will need to be the subject of individual discussion in appropriate cases.

8. The mechanism for obtaining contributions

8.1 The County Council is pleased to work in partnership with local planning authorities to obtain contributions. As mentioned above, consultation needs to take place at several stages. Firstly, there should be a local plan / local development framework policy that sets out the basic principles. Secondly, specific requirements can be identified in development briefs. Thirdly, detailed discussion, and negotiation if necessary, can take place prior to, and when planning applications are received. The Children's Services Department should be involved at all of these stages.

8.2 The agreed requirements are included as obligations in a Section 106 agreement. This would normally be drawn up by the County Council (Chief Executive's Department) or as part of a joint County and District/Borough agreement.

8.3 Section 106 agreements will provide for the agreed contributions to be index-linked to an index of building costs (normally the PUBSEC index published by the Department for Business, Enterprise and Regulatory Reform) and for appropriate triggers for payment, related to the intended phasing of development. .

9 Status of this document

9.1 The principles set out in this document were approved by the County Council's Executive Member for Children's Services on 17 May 2007. This revision is to be submitted for approval by the Executive Member on 24 July 2008.

Any enquiries about the content of this paper should be addressed to:

Ian Lawson

School Organisation Officer

Hampshire County Council Children's Services Department

The Castle

Winchester

Hampshire SO23 8UG

Telephone: 01962 846350

e-mail: [email protected]