Capital Funding Arrangement 2014/15 and Beyond
Capital funding arrangement 2016/17 and beyond
(Updated November 2015)
The following guidance applies to Hertfordshire Primary (and middle) schools (including voluntarily controlled and voluntary aided, excluding academies). Separate arrangements exist for secondary schools, special schools and ESCs.
From 1st April 2014 all primary schools in Hertfordshire will receive their delegated share of Dedicated Schools Grant that has previously been held centrally for capital maintenance. The formula for devolving this was agreed by the Schools Forum at its meeting in January 2014 and is calculated based on a lump sum plus an element based on pupil numbers. This will form part of the schools revenue budget share from 1st April 2014.
As a result of receiving this funding schools will have greater capacity to undertake capital works themselves and take forward elements of their school Asset Management Plans (AMPs). Guidance and advice on the preparation of AMPs and the processes of commissioning and managing works can be found on the Premises & Sites page on the GRID:
The amount each school will receive in the 2016/17 financial year will range between £10,000 and £25,000. The funding is not ring-fenced and is subject to the same rules as normal revenue funding. It is in addition to the Devolved Formula Capital which is governed by rules set by the DfE. The new funding will allow schools to discharge their responsibilities for capital repairs and maintenance in a planned way and establish prudent levels of reserves for anticipated future capital projects.
The new funding will not be sufficient to fund major capital projects and the County Council’s Building Management Team will continue to manage the residual capital maintenance fund (which in 2015/16 was £18.759 million). Schools will continue to be able to submit applications for funding in the same way as now.
Schools will continue to be required to make a financial contribution to successful projects. This contribution will be proportionate to the amount of money that each school will received for capital maintenance. Schools will therefore need to ensure that they are aware of the longer term needs identified in their AMPs so that they can ensure they are able to make the appropriate contribution to each project.
2016/17 is the third year the contribution scheme has been running. Schools with schemes being funded in 2016/17 will be expected to make an average contribution of around £14k. The contribution regime has been relaxed for 2016/17 to take account of the financial pressures on schools. The following Frequently Asked Questions should help answer your questions about how the new regime will operate.
Frequently Asked Questions
How will I know if am expected to pay a contribution?
All new schemes funded by the schools Capital Repairs & Maintenance programme will attract a contribution which will be levied in the year during which construction takes place.
How much is the contribution likely to be?
The formula for the schools contribution is based on 75% of revenue allocation for capital maintenance within the school’s budget share. (Note: this is not to be confused with the Devolved Formula Capital which is a separate smaller amount).
Worked example:
School x receives £10,000 in devolved capital and requests support to take forward a roofing project estimated to cost £250,000. The school contribution (calculated on the basis of 75%) would amount to £7,500. The school would therefore need to ensure this was available before the project could be taken forward but would still have an additional £2,500 for other capital works.
How will the contribution work? Can it be netted off the total project costs?
For auditing purposes the County Council will continue to manage and fund the total project costs and pay the contractors direct. Schools will then be expected to pay the contribution back into the county pot as a separate transaction. This contribution will be debited during the December BISCUIT run in the relevant year.
Schools with new schemes being taken forward in 2015/16 will have their contribution debited in December 2015 via the BISCUIT and will already have been notified.
What happens if we submit more than one scheme in any given year or successive years?
The application of schools contribution will be levied only once in any financial year. Therefore a school with two successful schemes will only be asked to pay a single contribution. Contributions in successive years will be treated the same i.e. The contribution will be waived for schools requiring projects in consecutive years as schools will not have been able to rebuild their capital pot.
What happens if we have urgent works and do not have sufficient funding to pay the contribution?
Each case will be handled on its own merits. Generally speaking the fund is for planned works and therefore works will be deferred until the contribution can be found. A school contingency will continue to be held for those schools having to undertake work that would put them in financial difficulty, although this will be limited as currently and determined by an annual assessment process. Schools will be expected to have a planned approach to capital maintenance and exceptions will be rare.
The contribution is more than the estimated value of the scheme.
The new arrangements will give schools far greater ability to manage smaller value schemes. Such schemes should continue to be managed through the council frameworks but could be tendered directly by schools as and when they have the funding to do so. Schools wishing for the County Council to tender and manage a project on their behalf will be asked to pay the full contribution regardless of the project value. Therefore projects less than the contribution amount will (in effect) attract a premium to cover the costs of managing them centrally.
I.e. A school is seeking funding to replace an obsolete boiler in standalone classroom block (estimated cost £12,000). The school receives £18,000 additional capital maintenance each year and the school contribution would therefore be £13,500 (75% of their annual contribution) if they wished it to be managed as part of the capital programme.
Will the application process for capital funding be changing?
No. The same process will continue to apply. I.e. all potential schemes will require a one page business case, a relevant condition survey and an up-to-date copy of the schools Asset Management Plan. A training day has been developed which is available for booking through HFL and will be run termly for those schools wishing to increase their knowledge in this area.
How do I know when my scheme is going ahead?
Schools will be advised of their contribution at the same time as they are notified that their scheme has funding approval. Schools who have been told that their bid is held for a future years programme will need to plan for their contribution in a subsequent year. Significant deterioration to the condition of the relevant building in the meantime should be reported to the Building management Team for further advice.
Where do I go for more help?