Archived decisions

HAMPSHIRE COUNTY COUNCIL

Decision Report

Decision Maker:			Executive Lead Member for Children's Services
Date of Decision:			15 January 2010
Decision Title:			Children's Services Capital Programme 2010/11 to 2012/13
Decision Reference:			1002
Report From:			The Director of Children's Services and County Treasurer
Contact name:		Peter Colenutt, Strategic Development Manager
Tel:	01962 846157			Email:	[email protected]

1. Executive Summary

1.1. This report seeks approval for submission of the proposed capital programme for 2010/11 to 2012/13 to the Leader and Cabinet.

1.2. The report has been prepared in consultation with the Executive Member and will be reviewed by the Children and Young People Select Committee. It will be reported to the Leader and Cabinet on 5 February 2010 to make final recommendations to County Council on 18 February 2010.

1.3. The report considers the schemes which it is proposed to include in the capital programmes for 2010/11, 2011/12 and 2012/13.

1.4. The proposals contained in this report are derived from the departmental service plan(s) which have been developed to support the priorities of the Corporate Strategy.

2. Contextual information

2.1. In approving the medium term financial and efficiency strategy on 26 October 2009, the Cabinet agreed that the guidelines for the locally resourced capital programme for 2010/11 to 2012/13 should be set at the same level as the current programme for 2009/10 to 2011/12. This reflects the continued uncertainty about the level of capital receipts likely to be available to finance the locally resourced programme.

2.2. Executive members can now prepare proposals for:

· a locally-resourced capital programme for the three-year period from 2010/11 to 2012/13 within these guidelines;

· a programme of capital schemes supported by Government grants or supported borrowing in 2010/11 and those expected to be supported in 2011/12 and 2012/13, subject to limits restricting the take-up of Government supported borrowing approvals.

2.3. The medium term financial and efficiency strategy is closely linked to the Corporate Strategy and the Corporate Business Plan to ensure that priorities are affordable and provide value for money and that resources follow priorities.

2.4. 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.

2.5. The cash limit guidelines for the locally resourced capital programme for Children's Services as set by Cabinet are as follows:

Year	£m
2010/11	0.090
2011/12	0.090
2012/13	0.090

3. Finance - Capital programme supported by Government allocations

3.1. As the Government has previously announced details of its support for capital schemes in 2010/11, the cash limit guidelines for the programme supported by Government borrowing and capital grant allocations for that year remain unchanged. They continue to allow for not taking up Government supported borrowing in full, based on the existing policy of limiting the increase in the capital financing requirement to 2.5% per annum, subject to the specific decisions taken in 2008/09 to support additional borrowing.

3.2. Details of Government support for projects in 2011/12 and 2012/13 will not be known until after the Government's Spending Review, but the programmes for these two years can be planned provisionally, where this is appropriate, on the basis of the best information available on potential future levels of support after taking account of the policy of limiting the increase in the capital financing requirement. Latest information from Treasury forecasts suggests there will be a reduction of 50% in capital funding. On this basis, the proposed programmes for 2011/12 and 2012/13 are based on an assumed 50% reduction from the cash limit for schemes supported by Government allocations for 2010/11.

3.3. 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 4. Any capital receipts for 2010/11 available to support the Children's Services capital programme will be added to these guidelines with the closure of the 2009/10 accounts.

4. Capital programme 2010/11 to 2012/13 - schemes supported by Government approvals:

4.1. 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. Assumed grants showing the anticipated 50% reduction for 2011/12 and 2012/13 have been shown in the supported borrowing figures for those years.

Table 1

Year	New pupil places	NDS Modernis-ation (borrowing part only shown here)	Schools Access Initiative	Reduction	Totals
	£m	£m	£m	£m	£m
2010/11	6.231	0.524	2.447	-1.760	7.442
2011/12 (Assumed)	3.116	0.262	1.223	-0.880	3.721
2012/13 (Assumed)	3.116	0.262	1.223	-0.880	3.721

4.2. 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, and this split is reflected in the current year's programme. This funding is a combination of borrowing approvals and grant. Table 2 shows the split between borrowing approvals and grant for 2010/11, as well as the planned reductions assumed for 2011/12 and 2012/13. The reduction of £0.845m relates to the advance of funding brought forward to 2009/10 as reported in October 2009.

Table 2

Year	Total grant for NDS	Total borrowing approval for NDS	Total NDS	Children's Services share of grant for NDS	Children's Services share of borrowing for NDS	Total Children's Services share
	£m	£m	£m	£m	£m	£m
2010/11 less advance	10.949	1.140	12.088	5.036 -0.845	0.524	5.560 -0.845
2011/12 (assumed)	5.474	0.570	6.044	2.518	0.262	2.780
2012/13 (assumed)	5.474	0.570	6.044	2.518	0.262	2.780

4.3. Schemes funded by government grant can be added to the borrowing approvals shown at Table 1. The announced capital grants for 2010/11, as well as the assumed grants showing the assumed 50% reduction for 2011/12 and 2012/13, are shown in Table 3. In response to the economic climate, a one off advance of 40% of 2010/11 Devolved Formula Capital was made to schools in 2009/10. The adjustment for this advance of £8.361m is also shown in Table 3.

Table 3

Year	Schools' devolved capital	Primary Capital Programme	Sure Start capital grant	Extended schools	NDS Modernis-ation	Other grants	Totals
	£m	£m	£m	£m	£m	£m	£m
2010/11 less advances	21.049 -8.361	11.825	7.787	1.049	5.036 -0.845	8.102	54.848 -9.206
2011/12 (assumed)	10.524	3.000	0	0	2.518	0	16.042
2012/13 (assumed)	10.524	3.000	0	0	2.518	0	16.042

4.4. The column headed "Other grants" consists in 2010/11 of £6.3m for Targeted Capital Fund, £1.288m for short breaks for families with disabled children and £0.514m for Youth Capital Fund,

4.5. On the basis of the anticipated position outlined above, resources available for each of the three forward years to 2012/13 are as set out in Table 4. In order to produce the programmes for 2011/12 and 2012/13 an assumption of likely DCSF grants (a figure of £8.232m based on 50% of 2010/11 hypothecated allocations) has been included in Table 4.

Table 4

	2010/11	2011/12 (assumed)	2012/13 (assumed)	Total
	£m	£m	£m	£m
Carry Forward from 2008/09 approved in January 2009	1.987	0	0	1.987
Carry forward 2009/10 into 2010/11	1.289	0	0	1.289
Carry forward 2010/11 to 2011/12	-0.833	0.833	0	0
Carry forward 2011/12 into 2012/13	0.000	-2.192	2.192	0
Carry forward resources to 2010/11 (table 12)	8.110	0	0	8.110
New Pupil Places supported borrowing	6.231	3.116	3.116	12.463
NDS Modernisation supported borrowing	0.524	0.262	0.262	1.048
Schools Access Initiative supported borrowing	2.447	1.223	1.223	4.893
Reduction in supported borrowing	-1.760	-0.880	-0.880	-3.520
Developers' contributions	7.016	9.678	12.000	28.694
Schools' Devolved Capital grant (less 2009/10 advance)	21.049 -8.361	10.524	10.524	42.097 -8.361
Primary Capital Programme grant	11.825	3.000	3.000	17.825
Sure Start capital grant	7.787	0	0	7.787
Extended Schools grant	1.049	0	0	1.049
NDS Modernisation grant (less 2009/10 advance)	5.036 -0.845	2.518	2.518	10.072 -0.845
Targeted Capital grants	6.300	0	0	6.300
Youth Capital grant	0.514	0	0	0.514
Short breaks for families with disabled children Less CCRA transfer (see 5.2)	1.588 -0.300	0	0	1.588 -0.300
DCSF grants assumed	0	8.232	8.232	16.464
Corporate Resources	0.090	0.090	0.090	0.270
Capital receipt anticipated	0.500			0.500
Totals	71.243	36.404	42.277	149.924

4.6. Resources totalling £11.386m are proposed to be carried forward to 2010/11, which includes:

· £3.276m agreed in January 2009 to be carried forward to 2010/11;

· £8.110m proposed to be carried forward to 2010/11 (detailed in table 12);

· £0.833m proposed to be carried forward to 2011/12;

· £2.192m proposed to be carried forward to 2012/13 as set out in detail in section 15.

5. Three year capital allocations 2010/11 - 2012/13 - overview

5.1. The Department for Children, Schools and Families (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, as indicated below. In order to produce a provisional capital programme for 2011/12 and 2012/13 (i.e. beyond the current announcements), a number of assumptions have been made. Initial indications from central government would suggest a 50% reduction in capital allocations from the current level. The position is set out below.

· New pupil places - Funding for 2010/11 remains at the same level as 2008/09. The anticipated reduction from 2011/12 onwards will place considerable pressure on the programme in the context of the number of new primary schools needed to serve new housing developments, along with the upturn in primary pupil numbers in certain areas of the county;

· New Deal for Schools Modernisation - The anticipated reduction from earlier years in 2011/12 onwards 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 (PCP) - A report outlining the strategy for investment for 2009/10 and 2010/11 was approved by the Executive Member for Children's Services on 17 December 2009. The programme is intended to improve a substantial proportion of the primary and primary age special school stock over a fifteen year period. Funding is available in 2010/11 (£11.825m) to support this programme, albeit with an anticipated fall to around £3m per annum thereafter;

· Schools Access Initiative - This allocation is £2.447m, as in 2009/10. As the County Council is unable to take up the full borrowing allocation, actual programme resources will be significantly below this figure, at £0.800m for 2010/11 (and provisionally £0.800m for 2011/12 and 2012/13). The programme supports the adaptation of mainstream schools to meet the requirements of pupils with special needs.

5.2. Funding for the following initiatives was allocated by the DCSF on a one-off basis for the three financial years 2008/09 - 2010/11 and cannot be assumed to continue in 2011/12 and beyond:

· Extended Schools - A total of £3.079m of capital grant is available: £2.030m for 2009/10 and £1.049m for 2010/11.

· Children's Centres Phase 3 - The strategy for implementation of phase 3 Children's Centres was approved by the Executive Lead Member for Children's Services (Education) on 16 October 2008 to develop 25 Phase 3 Children's Centres and their associated notional catchment areas. A total of £2.742m of capital grant is available for 2010/11. The allocations include £0.477m for capital maintenance of children's centres in 2010/11, which will be made available through the Policy and Resources capital programme.

· Early Years and Childcare capital - A total of £5.045m of capital grant is available in 2010/11. This grant is to improve the quality of accommodation in early years and childcare settings, mainly those operated by private providers. A strategic plan for allocating this funding was reported and approved by the Executive Member for Children's Services in July 2009.

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

· Targeted Capital Fund (TCF) - An allocation of £6.3m in 2010/11 as a flat rate. This funding is available to support SEN, inclusion, 14-19 projects and surplus place removal projects. Projects for consideration against this funding will be brought to the Executive Member Decision Day on 10 March 2010.

· Transforming short breaks for families with disabled children (£1.288m in 2010/11 and £0.481m in 2009/10, totalling £1.769m. An additional allocation of £0.2m in 2009/10 and £0.3m in 2010/11 has been transferred to the Executive Member for Culture, Communities and Recreation). This allocation is intended to improve opportunities for families with disabled children to enjoy short breaks. Specific projects were reported and approved in July 2009 by the Executive Member for Children's Services.

6. Provision of new pupil places

Primary Schools

6.1. Although primary school rolls generally are continuing to fall, there is significant growth in numbers in some areas of the county. An important aspect of this relates to new housing developments, with some established areas now seeing a significant increase. In addition to future years' formulaic allocations for new pupil places, significant developers' contributions will also be available. The developer contributions are dependant on housing completions, with the current economic climate raising considerable questions over the pace of such developments. The downturn in the housing market will impact on the timing of the new schools. Detailed discussions will continue to take place with district councils and developers to keep abreast of the situation.

6.2. In the context of the localised need for additional primary school places referred to above, the proposed new primary school for Andover, at East Anton, is included in the 2010/11 programme. It is anticipated that the first new primary school to serve the West of Waterlooville development and the second Andover school at Picket Twenty will be included in the 2011/12 programme.

6.3. The new primary schools (Andover and West of Waterlooville) are funded with significant developers' contributions. The developers' contributions for West of Waterlooville are insufficient to fund the required 3 form entry (630 place) school which will be needed to serve the first phase of the development. The additional cost will need to be funded from capital programme resources. Prudential borrowing of £5.625m will be required to fund the proposed new schools in advance of the developers' contributions being received.

6.4. 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 2010/11 and 2011/12 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 reduced.

7. Other formulaic allocations

7.1. 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

7.2. Owing to the anticipated reductions in capital resources the ability to fund improvement work for the primary, secondary and special sector outside of PCP and Building Schools for the future (BSF) will be limited. Allocations of £0.9m for secondary are proposed in the 2010/11 programme for refurbishment of science and technology spaces in several secondary schools. Allocations in 2010/11 of £0.3m for management of falling rolls, health and safety (£0.4m), the costs of progressing land sales (£0.15m in 2010/11 but reducing to £0.1m in 2011/12 and 2012/13) and adaptation of foster carers' homes (£0.1m) are also recommended.

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

Primary Capital Programme

7.4. Planned investment through the Primary Capital Programme will improve a substantial proportion of the primary and primary age special school stock over a fifteen year period. Following the approval of Hampshire's strategy in November 2008 detailed discussions and consultations with schools have taken place in 2009 about the planned investment programme for 2010/11 for Havant and Gosport. Proposals for projects to be included in the capital programme were developed and were approved by the Executive Member for Children's Services on 17 December 2009. It is anticipated that the 2011/12 and 2012/13 allocations will be about £3m for each year.

Schools' devolved formula capital

7.5. As reported to the Executive Member for Children's Services in October 2009, in response to the economic climate a one-off advance of 40% of 2010/11 devolved formula capital allocations has been made to schools. This totalled £8.361m and was added to the 2009/10 cash limit. An allocation of £21.049m has been made by the DCSF in 2010/11 for devolved formula capital for all schools. This will be allocated according to the DCSF formula set out in Table 5 and is intended to fund high priority projects identified through schools' Asset Management Plans. The formula for 2010/11 is the same as that for 2009/10, and uses an allocation formula based on the modernised/ unmodernised approach. However, allocations from 2011/12 (as shown in table 4) could see a similar reduction of around 50% to that indicated in section 5.1.

Table 5

	2009/10 & 2010/11
	Modernised schools £	Unmodernised schools £
Per nursery/primary pupil	31.50	63.00
Per secondary pupil	47.25	94.50
Per special school or PRU pupil	94.50	189.00
Lump sum (all schools)	9,250.00	18,500.00

7.6. 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.

8. Developers' contributions

8.1. Developers' contributions are an increasing source of resources for the Children's Services capital programme, albeit that they only cover costs incurred and their availability is likely to slow down to match the rate of house building. The current policy for contributions was approved by the Executive Member for Children's Services on 24 July 2008. 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.

8.2. A number of developers' contributions have been received during the current financial year as listed in Appendix 4. Funding of £0.616m is available to be added to the 2009/10 cash limit and is included in the resources recommended to be carried forward to 2010/11.

9. Capital funding for early years and childcare

9.1. Allocations through capital grant for the provision of Phase 3 of the Children's Centres programme and to facilitate the improvement of accommodation for existing childcare provision have been made up to 2010/11. The resources available for early years and extended schools provision are summarised in Table 6. The current spending profile anticipates that about £8.2m of Sure Start Capital will be unspent at 31 March 2010, but the value of projects not yet started will be significantly less than this amount. The value of projects not yet started will be reported at the year end. The full amount of the grant will be spent by the time it expires on 31 March 2011. The amounts shown in Table 6 exclude a total of £0.477m for capital maintenance of children's centres as referred to in paragraph 5.2.

Table 6

	2010/11 £m
Children's Centres Phase 3	2.742
Early Years and childcare	5.045
Total	7.787

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 £4.025m has been borrowed under the School Balances Loan Scheme and by the end of 2009/10 £1.023m will have been repaid; the remainder of the borrowing is scheduled for repayment by 2011/12. However, this is dependant on market conditions and the ability to sell the land in question. It should be noted that interest charges will continue to accrue until the repayment is made.

10.4. For schemes starting in 2004/05, 2005/06, 2006/07, 2007/08 and 2008/09 £40.734m is expected to be borrowed through the Prudential Code; £20.739m of this amount has been repaid to date, with the rest due for repayment when market conditions for the sale of land improve. The extent to which the market recovers is unclear at this stage and the scope for fully repaying the loans raised to date will be closely monitored.

10.5. 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 2010/11 programme to meet continuing and anticipated borrowing costs and this is shown as an expenditure item in the capital programme. The amount included is £1.1m. Current estimates of receipt levels suggest that there might be a shortfall between valuations at the time prudential borrowing was approved and the amount achievable in the current market. This will be kept under review, but should be recognised as a potential commitment against future years' capital resources.

10.6. The decision to amalgamate Yateley Infant School and St Peter's Church of England School, Yateley was approved by Cabinet on 29 June 2009. The cost of providing a permanent solution for the new school is estimated to cost £1.9m, of which £0.574m is available from within the Children's Services capital programme. Prudential borrowing of £1.326m was approved by Schools Forum on 20 October 2009, to enable a permanent build option. Therefore, it is recommended to Cabinet, that the sum of £1.326m is added to the capital programme on the basis of the use of prudential borrowing, the cost of which is chargeable to the Schools budget.

10.7. Prudential borrowing of £0.5m to provide an Autistic Spectrum Disorder (ASD) unit at Crofton School, Stubbington was approved by Cabinet on 27 October 2008.

10.8. Prudential borrowing of £5.625m is required to deliver the proposed new primary schools in advance of developers' contributions being received. A recommendation to Cabinet to approve the borrowing is required.

11. Capital programme 2010/11 to 2012/13

11.1. The total amount available to fund starts in 2010/11 is £71.243m. Table 4 in paragraph 4.5 illustrates how this sum is arrived at.

11.2. On the basis of the position outlined above, taking into account the anticipated reduction in capital allocations from central Government, the total value of the capital programmes submitted for consideration for the three years to 2012/13 is shown in Table 7.

Table 7

	Schemes within locally resourced guidelines	Additional schemes funded within the prudential framework	Schemes supported by Government grants/credit approvals	Total
	£m	£m	£m	£m
2010/11	0.090	7.016	64.137	71.243
2011/12	0.090	9.678	26.636	36.404
2012/13	0.090	12.000	30.187	42.277
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 2010/11 programme totals £71.243m 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 2012/13 is shown in Table 8.

Table 8

	Children's Services £'m
2009/10 (current)	104.863
2010/11	71.243
2011/12	36.404
2012/13	42.277
Totals	149.924

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

12. 2011/12 to 2012/13 guidelines

12.1. As indicated above, it is possible to fund those schemes where starts need to be made in 2010/11. The indicative resources available in 2011/12 total £36.404m and are summarised in Table 9. This table assumes that the split between NDS suitability and condition funding is the same in 2011/12 as in 2010/11. The split is subject to Executive Members' decisions, so the totals may vary.

Table 9

	2011/12
	£m
New Pupil Places supported borrowing	3.116
NDS Modernisation supported borrowing	0.262
Schools Access Initiative supported borrowing	1.223
Reduction in supported borrowing	-0.880
Proposed Prudential Borrowing	9.678
Schools' Devolved Capital grant	10.524
Primary Capital Programme grant	3.000
Sure Start capital grant	0
Extended Schools grant	0
NDS Modernisation grant	2.518
Targeted Capital grants	0
Youth Capital grant	0
Short breaks for families with disabled children	0
DCSF grants assumed	8.232
Corporate Resources	0.090
Reduction to carry forward to 2011/12	-2.192
Resources brought forward from 2010/11	0.833
Totals	36.404

13. Pressures on the capital programme

13.1. There are sufficient resources available to fund all the schemes which need to be started in 2010/11. The position for 2011/12 and following years, however, is difficult because of the combination of:

· the anticipated reduction in capital allocations;

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

· the need to fund the cost of three new primary schools to serve major housing in 2010/11 and 2011/12.

13.2. A significant amount of expenditure on projects to provide new pupil places is anticipated in 2010/11 and 2011/12, which will generate funding pressures. These are projects to provide new schools in major development areas and other areas of significant new housing. Table 10 gives an overview of the location of new primary schools and major extensions where starts on site are expected to be required in 2010/11 and 2011/12. Planning permission for each of these developments has been granted. The actual timing of these projects will depend upon the forecast rate of housing completions and Table 10 shows the best currently available information.

Table 10

Project	Extension/ new school	Expected start on site (subject to revision)
East Anton, Andover	New	2010/11
Picket Twenty, Andover	New	2011/12
West of Waterlooville MDA	New	2011/12

13.3. The estimated average cost of a new one-form entry primary school is about £5.6m and of a one-form extension to an existing primary school about £3.5m. In broad terms, the estimated costs of the new primary school places where starts on site are likely to be required in 2010/11 and 2011/12 are about £23m, of which about 65% is expected to be available from developers' contributions. The remaining cost will need to be met from New Pupil Places allocations. The amount of new housing planned currently and that likely to proceed after 2012 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 11.

Table 11

Schemes within the guidelines	Full Year Cost
	Current expenditure £m	Capital Charges £m
2010/11	0.220	1.278
2011/12	0.220	0.686
2012/13	0.440	0.797
Totals	0.880	2.761

14.2. The total revenue implications for the three years of the starts programme, including capital charges, represent a real term increase of 0.5% over the 2009/10 original budget of this service.

14.3. 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, the current expenditure will be absorbed within the Schools Budget.

15. Amendments to the 2009/10 capital programme

Kitchen and Dining Facilities

15.1. Funding of £0.625m is available in 2009/10 targeted at increasing school meals uptake. Allocations were approved by the Executive Lead Member Children's Services in July 2009. These allocations were made on the basis that they were match funded by the schools involved. Since that time a number of schools have decided not to take up their allocation in order to re-prioritise their funding to other projects. Consequently, a sum of £71,250 was released for reallocation. Discussions have now taken place with other schools and it is recommended that this funding is now allocated as shown in Appendix 6.

14-19 Projects

15.2. Following a series of discussions and meetings with each 14-19 consortium a number of further allocations were agreed by a joint County Council/LSC working group for the delivery of diplomas across Hampshire. Funding of £0.118m was carried forward from 2008/09 to 2009/10 and £0.437m is recommended to be carried forward to 2010/11 for future diploma projects. Details of the allocations for 2008/09 and 2009/10 are shown in Appendix 3 and are recommended for approval. Projects for consideration against the 2010/11 programme will be brought to 10 March Executive Member Decision Day.

Additional resources for the 2009/10 programme

15.3. Secondary Schools Specialist status - After three years schools can apply for re-designation status and qualify for additional DCSF grant funding of £0.025m. During 2009/10 nine schools (Bay House, Brookfield, Crofton, Fernhill, Horndean, Ringwood, Arnewood, Henry Cort and Yateley) have been successful. Additional resources of £0.225m are recommended to be added to the 2009/10 cash limit.

Projects proposed to be carried forward to 2010/11

15.4. It will not be possible, mainly because of changes in the scope, brief or programming of projects, to start the schemes listed in Table 12 during 2009/10. It is proposed, therefore, to defer them, with their resources, to 2010/11. The amounts shown in Table 12 are the contributions to project costs from the Children's Services capital programme along with the full estimated costs of schemes, with the differences being funded from other sources.

Table 12

Project	Project cost	Resources carried forward
Named projects	£m	£m
Bransgore Primary	0.030	0.030
Stanmore Primary School, Winchester	0.690	0.640
Robert Mays Secondary School, Odiham	0.553	0.170
Basingstoke School Plus	2.500	2.500
South East Assessment Unit	0.500	0.500
EIS General	0.392	0.392
Specialist Facilities Improvements	0.300	0.300
Park Community - Co-location	0.925	0.685
Dove House, Basingstoke	0.725	0.075
Specialist Schools (Burgate School)	0.100	0.100
Stepping Stones, Fordingbridge	0.230	0.060
Food Technology - Purbrook Park	0.300	0.300
Locks Heath Infant and Junior	0.161	0.161
Management of Falling Rolls	0.165	0.165
Staff Workforce Projects	0.158	0.158
Schools Access Initiative	0.158	0.158
H&S Swimming Pools	0.463	0.463
Developers' contributions	0.616	0.616
AMP data provision	0.200	0.200
14-19 projects	0.437	0.437
Total 2010/11 carry forward	9.603	8.110

15.5. It is proposed to carry forward resources of £11.386m, which includes £3.276m shown in Table 4.

15.6. £0.616m of developer contributions, excluding those related to previous borrowing, have been received during 2009/10. It is recommended that this sum be added to the 2009/10 capital programme and carried forward to 2010/11 against specific projects to be identified.

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

West of Waterlooville Primary School and Picket Twenty Primary School, Andover

15.8. The downturn in the housing market has had an impact on the timing of new schools. It is now anticipated that the new schools to serve these areas will not start until 2011/12.

Bransgore Primary

15.9. Provision of Planning Preparation Assessment (PPA) area has been delayed due to design amendments. It is anticipated that the project will start summer term 2010.

Stanmore Primary School, Winchester

15.10. Funding of £0.450m was identified from the 2008/09 programme to replace a dining hall which is housed in a temporary building in very poor condition. Feasibility work identified a project cost of £0.690m. Following a successful bid to the DCSF to improve school dining facilities a further £0.19m was approved by the Executive Lead Member Children's Services on 22 July 2009. A start on site date for this project is anticipated for May 2010.

Robert May's Secondary School, Odiham

15.11. This project is joint funded with the Football Foundation final confirmation of whose funding is expected shortly.

Primary Observation and Assessment Centre, Gosport

15.12. Firm costings have now been received for this project and indicate a total cost of £0.65m. On 17 December 2009 the Executive Member for Children's Services approved the carry forward of the 2009/10 allocation to 2010/11 and a supplementary allocation of £0.15m from the 2010/11 programme. This project is planned to start on site in May 2010.

Park Community School, Havant

15.13. A new permanent community facility is to be provided partly funded from a successful bid to the DCSF Co-location Fund. Early design work has commenced and a start on site is planned for autumn 2010.

Locks Heath Infant and Junior Schools

15.14. It is recommended that £0.161m is carried forward to contribute towards a scheme to replace temporary classroom facilities.

The Burgate School and Sixth Form Centre, Fordingbridge

15.15. This school has received a grant of £0.1m for specialist status and a project is being developed to start in 2010/11.

Stepping Stones, Fordingbridge

15.16. Funding of £0.060m was approved in July 2009 to provide refurbished accommodation for an early years group. Additional funding of £0.170m has been allocated from PVI funds to deliver a larger project. The scheme is expected to start in June 2010.

Secondary School Food Technology

15.17. Funding of £0.300m has been made available by the DCSF to provide for a food technology space at Purbrook Park School. A further refinement of the project is being undertaken to bring the scheme within the available resources. The project is expected to start in June 2010.

Management of falling rolls

15.18. Projects totalling £0.165m are recommended to be carried forward to 2010/11. Detailed negotiations continue with headteachers with a view to works being undertaken in the 2010 summer holiday.

Staff workforce projects

15.19. Seven projects totalling £0.158m are identified for carry forward to 2010/11. Detailed plans are currently being drawn up, with works planned for the 2010 summer holiday period.

Schools Access Initiative

15.20. A total of £0.158m is proposed to be carried forward to the 2010/11 programme to carry out adaptations to mainstream schools to meet the requirements of pupils with special needs.

Health & Safety - swimming pools improvements

15.21. £0.463m is recommended for carry forward. Detailed feasibility work is being undertaken and it is planned to start the projects listed in Appendix 5 early in 2010/11.

Targeted Capital Fund - surplus place removal

15.22. As indicated in paragraph 5.2, Targeted Capital Fund grant of £0.3m has been made available for the removal of surplus places. This funding was proposed to be allocated to projects at Cherrywood Primary, Farnborough, Tower Hill Primary, Farnborough, Manor Infant, Farnborough, Bishops Waltham Junior, and Bursledon Junior Schools. As these projects are already included in the 2009/10 capital programme, the additional funding will free up resources for use as partnership funding on other surplus place removal projects covered by the grant in future years.

16. 2010/11 capital programme

Staunton Community Sports College ("Havant Academy") - swimming pool improvements

16.1. The Cabinet agreed on 27 April 2009 to establish an academy to replace Staunton Community Sports College, Havant, as part of a wider strategy for the future of secondary school provision in the Havant and Horndean area. This area will also be the first in the county to receive BSF investment. When consultation was undertaken on the future of Staunton, the County Council stated its intention to safeguard as far as possible the wide range of community provision on the site. While this can be achieved to a degree through BSF investment, this funding cannot be used to carry out urgently needed improvements to the swimming pool on the site, which has extensive community use. The pool was identified in December 2007 as one of those which should benefit from capital investment to ensure its long-term viability.

16.2. The Director of Property, Business and Regulatory Services has undertaken a feasibility study that identifies investment of £1.23m (including fees) which would bring the facility up to a good modern standard by the replacement of the existing enclosure and upgrading of the engineering plant. If possible this work will be carried out in tandem with the BSF programme.

16.3. It is anticipated that this community facility will be managed by the Academy after its planned opening in September 2010.

Gosport vocational provision

16.4. The County Council has for several years undertaken a programme of improvements to education centre premises, which has resulted in new or substantially improved and remodelled buildings in most areas of the county. Of the remaining unimproved premises, the building in worst condition is the Quayside Education Centre in Gosport, which occupies number of temporary buildings on the St. Vincent College site. It would now be appropriate to include measures in the 2010/11 capital programme to replace the existing Quayside provision. This would be planned in the context of Gosport being the second priority area for BSF investment in Hampshire.

16.5. Recent developments in the approach to managing exclusions mean that the traditional education centre provision may not be appropriate in all cases when new accommodation is being considered. One approach, for example, might be to provide a range of facilities on secondary schools sites across the area, reflecting the increasing trend of avoiding permanent exclusions wherever possible and for co-operation among schools to manage pupils at risk of exclusion through the shared use of resources.

16.6. Another strand is the opportunity to provide improved vocational facilities, which can be used by all secondary pupils, but have a particular role in supporting those at risk of permanent exclusion. Gosport has a shortage of such facilities and investment in replacement provision for the Quayside centre could also make a valuable contribution to the broader need for increased vocational facilities in the area. One-off funding is available through TCF to address needs in the areas of SEN, inclusion and 14-19 and this funding can be used to make a substantial contribution towards the costs of replacing the Quayside accommodation. It is proposed that provision of £4m is made in the 2010/11 programme for the replacement of Quayside Education Centre, with £2m of this funded through Targeted Capital Fund and the remainder from New Deal for Schools as shown in Appendix 1. A further report will be submitted outlining specific options for the location and nature of the replacement provision.

17. Building Schools for the Future (BSF)

17.1. The County Council's entry to the national BSF programme, for its first priority project in Havant and Horndean, was announced in July 2009. The entry of the remaining nine area projects in Hampshire is dependent upon the availability of funding nationally and progress in bringing these further phases to a state of readiness to enter the programme.

17.2. A "Strategy for Change" (SfC) for the first priority project is currently being consulted upon and will be submitted for approval by Executive Members in March 2010, prior to submission to Partnerships for Schools (PfS). Approval of the SfC by PfS is the next key stage in the process of securing funding for the first phase of BSF investment and will be followed by an Outline Business Case, to be sent to PfS in July 2010. The best current estimate for the start of construction work is early 2012, with the likelihood that PfS will approve an earlier start for the academy (formerly Staunton Community Sports College) in autumn 2011. These dates are conditional upon approvals from Partnerships for Schools to the key documentation required and to agreement on procurement arrangements.

17.3. Capital grant in the region of £80m is expected to be received through PfS for the first project phase of the Building Schools for the Future programme. The actual cost of delivering the programme is envisaged to be higher than this, with a potential funding shortfall of approximately £29m. The estimated funding gap for the ten phases of BSF varies, with the first phase being at the higher end of the range. This is largely because of the scale of construction work required at two schools in particular, and the number of schools of medium and relatively small size. The anticipated funding gap on the second phase is at the lower end of the range.

17.4. The funding gap will need to be met by the County Council and this requirement was reported to Cabinet on 29 April 2009, when the future arrangements for secondary school organisation in Havant and Horndean were approved. An outline strategy to bridge the gap was referred to in the report to Cabinet and has been refined since the report was submitted. The main components of the strategy are:

· an annual contribution of £2.5m through the Children's Services capital programme, beginning in 2010/11;

· an annual contribution of £1.5m through the Policy and Resources capital programme, beginning in 2010/11;

· use of capital receipts from planned land sales at Phase 1 schools;

· procurement savings;

· use of schools' devolved capital;

· savings achieved in relation to secondary schools retained within the Policy and Resources insurance reserve;

· unspent landlord repair and maintenance budget (funded by capital expenditure from revenue), during 2010/11 and 2011/12.

17.5 Further opportunities to bridge the gap are being pursued, including through school contributions from balances. Further updates will be included in future capital programme reports.

18. Action taken by the Director of Children's Services

18.1. Under delegated powers, and following consultation with the Executive Member for Children's Services, the action set out in Appendix 2 has been taken and it is recommended that formal approval is now given to the allocations listed.

19. Summary position for 2009/10

19.1. Resources totalling £104.863m have been allocated to the 2009/10 starts programme, the amendments in this report are shown in Appendix 7. Of this total, £73.023m relates to block allocations including schools' devolved formula capital, Surestart, Schools Access Initiative, furniture & equipment, and contingency, leaving £31.840m for specifically identified schemes.

20. Building cost inflation

20.1. The economic climate has had and continues to have a significant impact on the construction industry where the recession has been deeper than originally anticipated.

20.2. This is reflected in the anticipated inflation for building works where there is great uncertainty and volatility in the forecasts for tender prices. Published indices by the Department for Business Innovation and Skills (BIS, formerly BERR) around which the Capital Programme is based indicate that there was a significant reduction in tender indices during 2009. Looking forward the BIS PUBSEC index is forecasting that tender prices will level off during 2010, with perhaps a small reduction of approximately 1%. This is anticipated to bottom out at the end of 2010 and begin to rise in 2011 at about 3 - 4% per year. It should be noted that these are provisional and forecast figures for this period and the firm outcomes are still uncertain in the current market. The sectors that have been worst hit recently are Private Housing and Private Industrial and Commercial. The Public non-housing Sector which was forecast to grow over the next two to three years is now expected to shrink as the anticipated public funding is subject to review and cuts in order to support pressures on the general public finances. The impact of major public expenditure projects such as the Olympics will not therefore have the degree of inflationary influence on tender prices as might have been the case.

20.3. Notwithstanding the current economic climate, national building costs have increased significantly in the last five years. A slight dip has been experienced during 2009 but the general upward trend is forecast to continue. To help mitigate this, the 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.

21. Temporary classrooms

New temporary classroom requirements

Weeke Primary, Winchester

21.1. Following the agreement by governors to increase the school Published Admission Number (PAN) from 45 to 60, due to the pressure on primary school places in Winchester, a further double temporary classroom will be required from September 2010. As part of the infrastructure works, £0.25m was identified in the 2009/10 programme to provide a music/drama room. Detailed negotiations continue with the school with a view to enhancing the scheme using the school's Devolved Formula Capital. It is recommended that approval be given to submit a planning application for the siting of a double temporary classroom until August 2014. The cost can be met from the 2010/11 revenue budget for temporary classroom provision.

St Bede Primary, Winchester

21.2. Following the agreement by governors to increase the school PAN from 45 to 60, due to the pressure on primary school places in Winchester, a double temporary classroom will be required from September 2010. As part of the infrastructure works, a feasibility exercise for a three classroom extension is being developed. It is recommended that approval be given to submit two planning applications for the siting of a double temporary classroom on two potential locations until August 2014. Two applications are being made due to the potential of acquiring some additional land from Winchester City Council. The cost can be met from the 2010/11 revenue budget for temporary classroom provision.

22. Recommendations

22.1. The capital programme for 2010/11 to 2012/13 as set out in Appendix 1 be approved for submission to the Leader and Cabinet.

22.2. That the deferral of resources of £8.110m, relating to schemes of £9.603m be approved for submission to Cabinet as shown in Table 12 of this report.

22.3. That the following variations to the 2009/10 capital programme be approved:

a) Individual allocations for a range of projects listed in Appendix 2, agreed by the Director of Children's Services;

b) That the addition of resources of £0.225m of secondary schools specialist status funding be added to the 2009/10 programme.

c) That the addition of resources of £0.616m of developer contributions as shown in Appendix 4 be added to the 2009/10 programme;

22.4. That approval is sought from Cabinet, that the sum of £1.326m is added to the capital programme for the proposed amalgamation of Yateley Infant and St Peter's Church of England schools. This is proposed on the basis of the use of prudential borrowing, the cost of which is chargeable to the Schools budget.

22.5. That approval be sought from Cabinet to approve £5.625m of prudential borrowing for the proposed new primary schools in Andover and Waterlooville.

22.6. That the Executive Member for Children's Services notes the anticipated capital contribution required from the County Council to the first phase of BSF investment and endorses in principle the approach to funding the contribution, subject to future reports when details of the amount required and the resources available to fund it are known.

22.7. That the approval to submit applications for planning consent until 31 August 2014 for temporary classrooms at:

· Weeke Primary, Winchester

· St Bede Primary, Winchester

CORPORATE OR LEGAL INFORMATION:

Links to the Corporate Strategy

Hampshire safer and more secure for all:	yes
Corporate Business plan link number (if appropriate):
Maximising well-being:	yes
Corporate Business plan link number (if appropriate):
Enhancing our quality of place:	yes
Corporate Business plan link number (if appropriate):
OR
This proposal does not link to the Corporate Strategy but, nevertheless, requires a decision because: NB: Only complete this section if you have not completed any of the Corporate Strategy tick boxes above. If it is not applicable, please delete.

NB: If the `Other significant links' section below is not applicable, please delete it.

Other Significant Links

Links to previous Member decisions:
Title	Reference	Date
Children's Services Capital Programme 2009/10 to 2011/12	468	21 January 2009
Children's Services capital programme issues	742	22 July 2009
Children's Services capital programme issues Children's Services Primary Capital Programme	870 1030	15 October 2009 17 December 2009
Direct links to specific legislation or Government Directives
Title		Date

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 published works and any documents which disclose exempt or confidential information as defined in the Act.)
Document	Location
None

IMPACT ASSESSMENTS:

1. Equalities Impact Assessment:

Equality and diversity objectives are not considered to be adversely affected by the proposals of this report.

2. Impact on Crime and Disorder:

Crime and disorder objectives are not considered to be adversely affected by the proposals of this report.

3. Climate Change:

a) How does what is being proposed impact on our carbon footprint / energy consumption?

When the Children's Services Capital Programme invests in new build, replacement or refurbishment works, Property Services colleagues include an assessment of reductions in energy consumption (carbon use) in the design. In all new buildings and in the majority of refurbishment type investments, the latest technologies and materials are specified in order to maximise the impact on reducing carbon consumption. Many projects are also able to employ passive design approaches including natural ventilation and improved insulation to actively reduce consumption in summer and winter conditions.

b) How does what is being proposed consider the need to adapt to climate change, and be resilient to its longer term impacts?

The proposals seek to provide compact and energy-efficient building envelopes. Any new build or extensions will meet current building regulations standards for thermal performance. Where possible, appropriate sustainable materials will be employed to reduce the environmental impact of the proposals.