Why is the governing body of an aided school responsible for the premises?

 Because education law dictates; namely section 22 and schedule 3 of the School standards and Framework Act 1998

22 Maintenance and other funding of schools.

(5)In the case of a voluntary aided school, the local education authority’s duty to maintain the school includes—

(a) the duty of defraying all the expenses of maintaining it, except any expenditure that by virtue of paragraph 3 of Schedule 3 is to be met  by the governing body,

Schedule 3 Part II Voluntary aided schools

 Obligations of governing bodies

3(1) In the case of a voluntary aided school, the governing body of the school are responsible for meeting all capital expenditure in relation to the school premises

The exception is that the local authority is responsible for the playing fields, but not the boundary fencing which is a governor responsibility.

What Capital funding is available to an aided school governing body?

 There is School Condition Allocation (SCA) and Devolved Formula Capital (DFC).

School Condition Allocation (SCA)
There is an annual bidding process managed by the Diocesan Board of Education (DBE), described below. LCVAP is intended for Condition works. Priority is given to items that, if not addressed would close the school, e.g. boiler replacement and roof replacement. The DBE operates financial management of grant. Works are to be completed in the year the grant is awarded i.e. by 31st March. The works are to be insured and conditions of the insure meet.

Devolved Formula Capital (DFC)
Each school is allocated DFC to spend on its capital needs. This is calculated as a lump sum and then an amount/pupil. DFC has to be spent within three years of it being allocated or it will be clawed back. ESFA operate an assurance scheme to monitor the grant is spent as intended. Grant is paid either into the Diocesan or school account.

 Common features of SCA and DFC
Grant is quoted in 100% terms. The grant received is 90% with the governing body responsible for the remaining 10%. Grant is to the governing body and therefore the contract for the works or supply is from the governing body. Funding of any overspend is a responsibility of the governing body.

The governing body is a ‘charity. Charities cannot reclaim VAT. VAT is to be included in the costs (unless the work is zero rated).

The grant can cover the costs of the works, consultant fees, statutory fees, the diocesan fee on SCA projects and VAT.

It has to be used on ‘capital’ as against ‘revenue’ expenditure. The examples below illustrate the difference.

  • Example 1
    Localised repairs to a roof (patching or mending) should usually be met from revenue funds, because this would be regarded as 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.
  • Example 2
    Small repairs to playgrounds (filling individual potholes etc.) should usually 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.
  • Example 3
    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 that it must be revenue because it is below the ‘de minimis’ threshold of £2,000.
  • Example 4
    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.

All expenditure below £2,000 is ‘revenue’, regardless if it would otherwise qualify as ‘capital’ expenditure. Note, works can be grouped together to exceed the £2,000 threshold.

ICT hardware and infrastructure is capital expenditure. Software and maintenance is not.

How does the capital funding operate?

SCA application process
The DBE sends a letter in the Autumn term inviting bids for the following financial year (1st April to 31 March).

  • Bids to be submitted early in the new year.
  • The DBE considers all bids to set priority schemes in each local authority (LA) area.
  • Education and Skills Funding Agency (ESFA) announces level of available funding in each LA area in late March or early April.
  • The local authority notifies the DBE of the total allocation available to its schools
  • The DBE notifies the LA of its allocation to individual schemes
  • The DBE writes in April to head teachers notifying them of the outcome of their bid.

SCA scheme delivery

  • Governors or their consultant to provide a minimum three tenders to the DBE.
  • DBE submit to ESFA for ‘Start on Site’ consent.
  • ESFA send letter to DBE approving expenditure of the grant and pay over the grant.
  • DBE issues a 10% invoice to governors
  • Governors pay the 10% invoice
  • Governors or their consultant to let the works.
  • Governors or their consultant to monitor the performance of the works
  • Governors or their consultant to submit invoices/certificates for properly completed works to the DBE for payment on their behalf

DFC application

  • Governors to obtain three quotes for works or supplies to the DBE
  • DBE set up a DFC project
  • DBE issues a 10% invoice to governors
  • Governors pay the 10% invoice.
  • Governors to let the works/supply
  • Governors to submit invoices to DBE for payment once they are satisfied the work or supplies are properly completed.

The SCA bid letter will ask you to describe;

  • What you want to do,
  • Why you need to do it,(if not obvious)
  • How much it will cost (works and VAT, fees and VAT)
  • How long it will take to deliver.

You would be wise to;

  1. Plan ahead and take professional advice in good time.
  2. build a 10% contribution into your budget
  3. develop a premises plan based School development priorities
  4. have gutters cleaned out
  5. not ignore big condition items as too difficult
  6. make the most of what you have, following good practice e.g. salford.ac.uk/cleverclassrooms/1503-Salford-Uni-Report-DIGITAL.pdfwww.carbontrust.com/media/39232/ctv019_schools.pdf

The DBE makes a 2.5% charge on the SCA grant. This can be treated as a fee.

Funding for an SCA project can be topped up by including DFC or budget should school wish. DFC can’t be used as the governors 10% contribution.

The DBE will consider an application for governors for a loan to cover their 10% contribution. Loans are on a commercial basis.

The DBE estates officer is available for talking through ideas/problems you may have.