15. Devolved Capital Allocations - Norfolk

Finance Procedure Manual

15. Devolved Capital Allocations 15.1

Scope This section provides details of the funding and control of devolved capital grants available to schools and Pupil Referral Units (PRUs). There are five types of capital funding available as follows. The project code is shown in brackets. • • • • •

15.2

Devolved Formula Capital Grant Seed Challenge Grant National Grid for Leaning E-Learning Credits (to Aug 09) Specialist Schools Capital

(ECAPFM) (ECAPSC) (ECAPNG) (ECAPEL) (ECAPSP)

Responsibilities The responsibility for spending this funding on projects lies with the governing body of the school. The governing body normally delegates day-to-day management of these funds to the headteacher.

15.3

Overview Devolved Formula Capital Grant funding is the main means by which the DfES can target funds towards addressing capital spending requirements of schools. Allocations should be directed towards essential capital expenditure on premises and the basis of such expenditure to be undertaken at a school should follow the priorities agreed locally and set out within the Asset Management Plan. It is expected that the highest priority items be undertaken first, such as urgent condition work. Seed Challenge funding is intended to provide "top-up" funding to schools who have already raised a significant proportion of external funding for curriculumrelated building projects which may otherwise have a lower priority for funding. Funding is allocated initially to the LA, but then delegated to schools as a result of a bidding process. Devolved capital allocations are earmarked sums for specific purposes in addition to the school’s budget share and should not be included as part of the budget plan, or used to support revenue expenditure.

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Devolved Capital Allocations National Grid for Learning (NGFL) funding is allocated annually to schools by the NGfL Project Manager in ICT Solutions and can only be used for the purchase of ICT equipment, including the costs of cabling, installation and adaptations to achieve the computer/pupil ratio targets. E-Learning Credit funding is a DfES grant consisting of a baseline figure for each school plus a per pupil allocation and can be spent only on multimedia resources, e.g. CD-ROMs, DVDs, software, site licences and on-line services, certified by registered Curriculum Online suppliers. Resources are aligned to the curriculum of subjects taught from Foundation/Early Years to Key Stage 4. Further details can be found on the Curriculum Online website. (www.curriculumonline.gov.uk). Schools that have been designated as specialist schools are eligible for capital grant to enable them to carry out capital projects to enhance their facilities for teaching the specialist subject. Approval has to be obtained from the DfES.

15.4

Process 15.4.1 Devolved Formula Capital Grant (DFCG) Schools except voluntary aided schools receive notification of their annual DFCG by 28th February each year from the LA on form LMSCAP and DFC Allocation Schedule. The year’s allocation is calculated using a DCSF formula based on a lump sum per school plus an amount per pupil on roll in the previous year. After the closure of the year’s accounts, the initial DFC allocation may be amended to include any over or under-spend from the previous financial year. Revised allocations will be notified to schools by the start of the autumn term. Schools can choose to: • use DFCG immediately to fund small capital projects. • carry forward unspent grant to the following financial year and the year after that to accumulate it to pay for a more substantial project. • bring forward to spend in advance the allocation for the following year and the year after that (but see note below concerning the availability of funding in total). • contribute DFCG to a larger project being funded from other sources, e.g. the LA. The LA monitors schools spending in total and must ensure that total commitments do not exceed the total grant received. Therefore, although schools can in principle spend from future years’ allocations, this is affordable only if other schools defer their capital building plans.

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Devolved Capital Allocations Schools are sent a Formula Capital Allocation Schedule which shows not only the amount of grant allocated each year, but also the deadline for spending each year’s allocation, which like other Standards Fund grants is August each year rather than the end of the financial year on the 31st March. At the end of each financial year, schools over or under spends are carried forward and the new year’s allocation is adjusted accordingly, subject to the principle that any allocation not spent within three years will be lost. Schools may supplement their capital budget by using their current delegated revenue budget for building improvements but must not use DFCG for revenue purposes. Further guidance on the use of DFCG is available from Planning and Transportation or Children’s Services Finance or from the DCSF website www.teachernet.gov.uk/devolved, which describes the purpose of the grant, eligible expenditure, arrangements for new and closing schools and schools in PFI, roll-over and pooling arrangements. There are separate arrangements for voluntary aided (VA) schools. They receive devolved capital funding directly from the DCSF not via the LA and must contact their Diocesan Officer for advice on the use of delegated funds. When schools have decided how they wish to spend their DFCG they must first submit their proposal to Children’s Services Finance (Financial Accounting section) for approval. The proposal form can be obtained from Children’s Services Finance (Financial Accounting section) and is available also on Esinet. After the approval of a project, details of the amount to be funded from DFCG are passed to Children’s Services Finance Support who monitor schools’ commitments and where necessary, arrange for additional money to be advanced to the school’s bank account, to ensure the school has the funds available to pay the contractor. Schools must follow Construction Industry Scheme requirements when paying invoices from building contractors. DFCG funding can only be used for capital expenditure where the project amount is greater than the LA’s minimum capital spend threshold of £2,000. DFCG cannot be spent on the following: • Revenue costs e.g. staffing • Purchase of books, ICT software or training materials and services • Furniture and equipment purchases – unless this is incidental to a building project and is not a major element of the project costs

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Devolved Capital Allocations • • •

Routine repairs, general maintenance or redecoration To fund operating leases (schools are not permitted to enter into finance leases) Hire of temporary accommodation

15.4.2 Seed Challenge Grant The Senior Officer (Asset Management) writes to schools each year to invite bids for the available funding for the following financial year. If a bid is successful, the annual grant is shown on form LMSCAP, which is th included in the pack of budget information sent to schools by 28 February each year. Schools have a total of 17 months to spend the grant, from 1st April to the 31st August of the following year, after which any unspent grant will be lost. Schools are notified of the balance carried forward at the end of the financial year 31st March. Schools must ensure that the full cost of the project is charged to the accounting code for Seed Challenge (project code ECAPSC) and the schools own contribution to the cost of the scheme is credited to the same project code, subjective (analysis) code C865. The amount of Seed Challenge Grant Payable towards each project might vary from year to year. The current terms are as follows, and the figures represent the percentage of the estimated total cost of the scheme: Secondary Schools

All other Schools

Seed Challenge Grant

max. 33%

max. 50%

School’s Contribution - New Money (eg: proceeds of fund-raising, external grant)

min. 50.25%

min. 37.5%

Formula Capita Allocation or Budget Share

max. 16.75%

max. 12.5%

-

15.4.3 Specialist Schools: Capital The DCSF writes to schools designated as specialist schools to invite them to seek approval for capital support. Designation does not give automatic approval to begin a capital project. The DCSF letter sets out the process for obtaining approval.

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Devolved Capital Allocations Capital support is provided through Standards Fund Grant and the maximum allocation for a school is £100,000. This must be supplemented by sponsorship generated by the school, in cash or relevant goods, to a minimum of £50,000. As with other Standard Fund grants, the deadline for spending the allocation for the financial year in which it is awarded is 31st August of the following financial year. The LA will advance the amount of the grant in one instalment to the bank accounts of schools with bank account type A.

15.5

Project Management It is essential that schools seek appropriate professional advice about capital projects. Professional advice will be particularly essential in ensuring compliance with relevant health & safety and other legislation. Associated fees and other similar costs must be considered as part of the total project costs, so value for money considerations must be applied when selecting professional help. Before undertaking any capital project, it is essential that the school is aware that no additional funding can be expected from the LA and therefore if costs exceed original estimates, if the project is undertaken, these will be borne by the school. All work undertaken using the funding must comply with standard NCC financial procedures, tendering arrangements and Construction Industry Scheme (CIS) requirements.

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15. Devolved Capital Allocations - Norfolk

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