Voluntary (aided or Controlled) schools usually comprise two charities that work interdependently
- the governing body, a corporate body created under the SSFA 1998, which runs the school
- the charity, usually called the foundation, which holds the land and buildings on trust for the provision of a school and/or for specified religious and educational purposes.
Each of these charities has its own charity trustees. Governors are charity trustees. Please refer to the Property Advisor for information of the trustees of the foundation.
The ‘school’ is the charitable activity of the governing body, not an entity in itself.
Use of the Site
It is implicit in the purpose of the charity that the governing body can use the site for its charitable activity ‘school’ without lease, licence or other agreement.
The governors have ‘control of the premises’ to decide on occasional or regular lettings. Governors also decide on significant other uses e.g. Pre-school, Out of Hours Clubs etc. Where these are not run by the governing body, the foundation trustees will be party to the legal agreement that allows the other party to occupy the site. The legal agreement will be a lease or licence. the legal agreement is on commercial terms.
The governing body should not agree to a use of the premises that is contrary to the purposes and practice of the Church of England. for advice on what is ‘contrary please consult your local vicar.
The governing body can be directed by the Local Authority to allow use for certain purposes e.g. youth work. This rarely happens.
Legislation allows for certain uses e.g. for political meetings before elections. Only the Foundation governors of the governing body can decide the use of the premises on Sundays.
Revenue or Capital Expenditure
All revenue work to the premises is LA liability, but the funding is delegated to schools being part of the Direct Schools Grant (DSG). There is no governing body contribution to revenue work. All work costing less that £2,000 is automatically revenue expenditure.
All capital work at Voluntary Controlled (VC) school premises is LA liability, but certain responsibilities will have been delegated to schools in agreement with the Schools Forum.
All capital work at Voluntary Aided (VA) school premises is governing body liability except work to the playing fields.
The following examples are intended to provide guidance on how to decide what might be regarded as revenue (paid for from revenue budgets) and capital expenditure (which can be met from capital grant).
Localised repairs to a roof (patching or mending) should usually be met from revenue funds, because this would be regarded a normal repair and maintenance work. If the whole roof, or a substantial part of a large roof, needs to be replaced, then this could reasonably be regarded as capital.
Small repairs to playgrounds (filling individual potholes etc.) should normally be met from revenue funds, because this would be regarded as normal repair and maintenance work. If the whole of the playground needs to be resurfaced, then this might reasonably be regarded as a capital item.
a boiler has unexpectedly broken down, and requires a new part which will cost (1,800. This could have been regarded as either revenue (because it is repair and maintenance) or capital. The cost, however, dictates tha tit must be revenue because it is below the ‘de minimis’ threshold of £2,000.
Replacing a few damaged chairs or desks would be regarded as a revenue cost because it is normal wear and tear. if, however, as part of a refurbishment of a whole classroom, all of the furniture is to be replaced then it can be included as part of the capital project.
Capital Includes – Purchase of computer hardware and software where these are to be capitalised or are funded from capital grant; E-learning credit expenditure: ICT in schools capital expenditure. However capital cannot be used for leasing of IT equipment and warranties as these must be funded from revenue.
Devolved Formulae Capital (DFC)
DFC is allocated annually to all schools on a formula – £4,000/schools=£11.25/primary pupil or £16.88/secondary pupil. As VAT cannot be reclaimed by VA schools their DFC allocations are greater.
The local authority holds grant for VC schools and the Diocese for VA schools. Each will have processes for accessing the grant. VA school governing bodies contribute 10% of the grant.
School Condition Allocations
this is a grant distributed to a ‘Responsible Body’ for allocation on priority condition work. Priority condition work are those items that if left unattended could close the school e.g. boiler replacement or renewing a flat roof.
The Responsibly Body for VC schools is the Local authority, for VA schools their diocese.
The VA strand of Condition capital is the Locally Co-ordinated Voluntary Aided Programme (LCVAP). LCVAP is an annual programme that runs with the financial year (April to March). VA head teachers receive a letter from the Diocese during the Autumn Term inviting them to submit a bid for funding in the next financial year. The bid includes; what the work is, why it needs to be done; the budget cost; how long it will take. VAT is applicable to condition works. Charities cannot reclaim VAT.
Advise should be sought from appropriately experienced persons e.g. architect or surveyor. School governors contribute 10% of the grant. A few VA school foundations have endowment funds which may assist governors with their liabilities. Diocesan consent is required for capital works above £10,000. The DfE website provides guidance on VA Capital