Chapter 9.      School Premises and Capital Investment - Download this file
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9   SCHOOL PREMISES AND CAPITAL INVESTMENT

CHAPTER SUMMARY

            School land and buildings are important public assets. The replacement value of school buildings alone is £130 billion.^[1] By 2010, £8 billion a year of capital will be being invested to improve them. Governors have a range of legal and other responsibilities, depending on the category of school, for:

·                     capital investment

·                     building projects

·                     maintaining buildings and land.

There are particular provisions which apply to investment at voluntary aided schools, as a consequence of the 1944 Education Act, as subsequently amended. These are discussed separately below.

LAND AND BUILDINGS

1.            The land of community schools is owned by the Local Authority (LA). The land at foundation schools is owned by the governing body, a foundation body or trustees. Land at voluntary schools is owned by trustees, although the LA will often own the playing field land.

2.         School land is usually in freehold ownership, but leaseholding interests are possible.

3.         In the majority of schools procured through PFI, the buildings are funded by a private sector contractor and are then operated and maintained by that contractor for an agreed period, typically 25 years. In these cases, it is usual for the contractor to be granted either a lease or an operating licence covering the buildings for the duration of the contract; the buildings then revert to the LA at the end of the term. The LA, the governing or foundation body, or the trustees, as the case may be, retain the freehold interest throughout.

4.         These contracts will remain in force even if the LA transfers its interest in the school land to the governing body where it changes status. The LA's interest in such a case is the freehold and the provision for the buildings to revert at the end of the contract term.

5.         Governing bodies will acquire the ownership of their school land where they change category to foundation status. It is the duty of the LA to transfer its interest in the land to the governing body where it changes status.[2] Where a foundation school acquires a foundation and becomes a Trust school the interest in the land will transfer to the trustees. Where there is disagreement on what land will transfer, the Schools Adjudicator will determine. This is one of the provisions of Schedule 22 of the School Standards and Framework Act, as amended by the Education and Inspections Act 2006 which relate to the transfer and disposal of publicly provided or enhanced school land. Where a school acquires a Trust, the ownership of its land will be transferred to the trustees.

Disposal and protection of publicly funded school land

6.         From 25 May 2007, the governing body of a foundation or voluntary school will no
            longer require the Secretary of State’s consent to dispose of surplus non-playing
            field land or school buildings which have been acquired or enhanced in value by
            public funding. They will be required to notify the LA of its proposals and seek local
           agreement on them. Where there is no local agreement the matter can be referred
           to the Schools Adjudicator to determine. Details of the new procedure can be found
           in the Department for Children, Schools and Families (DCSF) published guidance
           The Transfer and Disposal of School Land in England: A General Guide for
            Schools, Local Authorities and the Adjudicator.

Playing field land

7.            Particular protection has been given to school playing field land. Where the governing body, foundation body or trustees of a foundation or voluntary school wishes to dispose, or change the use of any surplus school playing field land that has been acquired and/or enhanced at public expense it will require the Secretary of State’s prior consent, under Section 77 of the School Standards and Framework Act 1998. Further information can be found in the Department’s published guidance The Protection of School Playing Fields and Land for Academies 2007.

8.             A foundation body or the trustees of a voluntary or foundation special school will also need the prior consent of the Secretary of State for Children, Schools and Families, under Section 77 of the School Standards and Framework Act 1998, to dispose of playing field land that has been acquired or enhanced at public expense.

9.            There are some limited circumstances in which approval has been delegated; the governing body, foundation body or trustees disposing or changing use of the land must notify the LA and then provide the Department with specific information. Further information can be found in Mukund Patel’s letter of 17 July 2007.

Discontinuance of a foundation or voluntary school

 10.     When a foundation or voluntary school is to be discontinued the governing body is
          required, under Part 2 of Schedule 22 to the School Standards and Framework Act
          1998, to apply to the Secretary of State to exercise his powers in relation to any land
          held by the governing body for the purposes of the school. The Secretary of State
          will make a direction as to what should happen to such land when the school is
         discontinued.

CAPITAL FUNDING

11.       Capital funding is allocated each year to LAs and to schools. It can be used to build and improve school premises and for other capital purposes including the provision of ICT. It is allocated to schools and LAs by needs-related formulae, and expenditure priorities are determined locally. LAs and schools can also use funding from other sources, including revenue funding and prudential borrowing, to invest in their buildings and assets.

12.       The major government formulaic funding streams for LAs are Modernisation, New Pupil Places (also known as Basic Need), and Schools Access Initiative. Individual LAs may also receive Basic Need safety valve funding. Devolved Formula Capital funding is allocated, via LAs, for schools’ own use. Capital funding is also available for projects which support the diversity and inclusion agendas (for example, to provide kitchens where currently there are none); to support the expansion of successful and popular secondary schools; for schools which acquire a specialism; and for those which have sustainable transport plans agreed.

13.       Building Schools for the Future aims to rebuild or renew all secondary schools that have not been replaced by existing funding streams or through the Academies programme. The first authorities were able to access funding in 2005–6. Announcements have been made of the first six waves of investment, prioritised on the average educational and social need of groups of schools proposed by authorities. 

14.       From 2008–9, additional funding will be available to authorities for the Primary Capital programme, which aims to renew at least 50 per cent of primary schools over 14 years, subject to future spending plans.

 15.       Voluntary aided schools receive capital funding on a comparable basis to those in
            the maintained sector.
 

16.       Maintained schools of any category may not enter into contracts which involve borrowing without the consent of the Secretary of State for Children, Schools and Families (Education Act 2002). In practice, because borrowing scores directly against the Department's budget, permission to borrow is not given. Where there is doubt on the nature of a contract, particularly regarding leasing plans, advice should be sought from the LA. 

17.       The DCSF relies upon LAs to prioritise how their formulaic funding is spent. Similarly, schools prioritise how they spend their Devolved Formula Capital. The normal spending rules apply. That is, capital allocations can only be used for a capital purpose, allocations for specific projects must be spent on those projects, and there are time limits within which allocations must be spent depending on the type of funding provided. 

18.       More detailed guidance on each type of allocation, how it is determined and how it must be spent, is available on the DCSF website before each financial year.

Value Added Tax

19.       The DCSF cannot give guidance on matters relating to liability for value added tax (VAT) on investment or building projects. Where you have questions, your LA or your local HM Revenue and Customs office may be able to help.

INVESTING IN SCHOOL BUILDINGS

20.       The Building Regulations (principally made up of the Building Regulations 2000 and the Building (Approved Inspectors etc.) Regulations 2000) which set standards for the design and construction of buildings apply to all buildings including schools. The Department for Communities and Local Government (DCLG) is responsible for setting these standards which are mainly to ensure the safety and health of people in or around buildings, but also cover energy conservation and accessibility. The Regulations apply to most new buildings and many alterations of existing buildings in England and Wales, whether domestic, commercial or industrial.

21.       The DCLG publishes guidance on meeting the requirements of the Building Regulations in what are known as “Approved Documents”. Some of these Approved Documents refer to the standards in the DCSF’s Building Bulletins as a satisfactory means to meet the requirements of the Regulations in school buildings.

            Further information on the Building Regulations is available on the government Planning Portal. General public users and professional users can access building regulations guidance, including the Approved Documents and associated guidance.

In addition there are regulations which apply to maintained schools – the Education (School Premises) Regulations 1999 (see below).

Education (School Premises) Regulations

22.       LAs must ensure that maintained schools in England and Wales comply with the Education (School Premises) Regulations 1999. The current regulations, which came into force on 1 February 1999, set minimum standards for the premises of all existing and new schools maintained by an LA in England and Wales; that is, to nursery, community, community special, foundation, foundation special and voluntary schools. They are not, in general, very detailed, except in relation to maintained boarding schools, and with regard to the provision of school playing field land that is suitable for playing team games. Independent schools including Academies and City Technology Colleges have to meet the requirements of the Education (Independent School Standards) (England) Regulations 2003.

23.       Minimum areas of team game playing fields must be provided in schools with pupils over the age of eight years. This applies to all maintained schools, including special schools, with pupils over the age of eight years but does not apply to pupil referral units.

            It should be borne in mind that the minimum requirements for the provision of team game playing fields are just that – the minimum requirement. They are not a target to which existing team game playing fields should be reduced.

24.       Team game playing fields are defined as “playing fields which, having regard to their configuration, are suitable for the playing of team games and which are laid out for that purpose.” They may include hard games courts, tennis courts, grass and all-weather artificial pitches. Playgrounds may also be considered to be team game playing fields provided they are set out for team games, that is: netball; basketball; tennis; five-a-side soccer or hockey; volleyball; rounders; or other team games normally played on marked out pitches or courts. Playgrounds or other play areas that include play equipment do not count as team game playing fields. Team game playing fields need not be grass. However, the grassed part of any team game playing fields must be capable of sustaining the playing of team games by pupils at each school for 7 hours per week per school during term time. Rotation to allow grass to recover may mean that the markings of team game pitches require adjustment from time to time.

25.       The responsibility for ensuring that a school complies with the minimum statutory team game requirement rests with the school’s maintaining LA. In cases where the minimum standards cannot be met, the maintaining LA will need to make an application to the Secretary of State to relax the statutory requirement.

ARRANGEMENTS FOR FUNDING PREMISES-RELATED WORK AT VOLUNTARY AIDED SCHOOLS

26.       The arrangements for funding premises-related work at voluntary aided (VA) Schools were changed by the Regulatory Reform (Voluntary Aided Schools Liabilities and Funding) (England) Order 2002.

Who is responsible for what?

27.       Responsibility for work to VA school premises is shared between the school’s governing body and the LA. The way this is split is summarised below.

VA school governing bodies are liable for:

·              the existing buildings (internal and external), including those buildings previously known as ”excepted” (kitchens, dining areas, medical/dental rooms, swimming pools, caretakers’ dwelling houses);

·               perimeter walls and fences, even if they are around the playing fields;

·               playgrounds;

·               furniture, fixtures and fittings – including ICT infrastructure and equipment;

·               other capital items (which can include capital work to boilers or other services).

LAs are liable for:

·                playing fields (including sports pitches and hard surfaced games areas);

·                buildings on those fields and related to their use.

De minimis level

 28.       There is a threshold below which any expenditure is not considered to be capital
              and should not be met from capital budgets. For all VA schools this is £2,000.

Capital grant

29.       The standard rate of grant support to VA school governing bodies from the DCSF

            is 90 per cent. LAs have the power to help VA school governing bodies with their 10
            per cent contributions. In exceptional circumstances the DCSF has the power to
            pay grant at up to 100 per cent.

Further information on capital funding for VA schools is available in the Blue Book guidance document on the TeacherNet website.

Provision of school sites at voluntary aided schools

30.       Who should provide the site for a new VA school is determined by the reasons for
            purchase. In cases of non-statutory transfers and non-significant enlargements,
            the LA provides the site. Where a site is required to implement statutory proposals,
           it is provided by the governing body. LAs may use their powers to help the
           governing body in buying a site, or can provide a site or building free of charge. The
           circumstances in which the LA can do this are set out in Paragraph 8 of Schedule 3
           to the School Standards and Framework Act 1998 and Paragraph 30 of Schedule 2
           to the Education and Inspections Act 2006.

31.       Where there is a competition to establish a new primary or secondary school, and
            the competition is won by a VA school, then, if the site is to be established on the
            site proposed by the LA, the LA must provide the site and should convey this to the
             trustees of the proposed VA school (Schedule 2 to the Education and Inspections
             Act 2006).

Loans to VA school governing bodies

32.       Paragraph 7 of Schedule 3 to the School Standards and Framework Act 1998
            provides that the Secretary of State may grant an interest-bearing loan towards the
            cost of any initial expenses required in connection with the school premises on
            application by the governing body of a VA school, or a Diocesan Authority or school
            trustees acting on behalf of the governing body, or the promoters of a new VA
            school. The circumstances in which approval would be given are very limited.

Proceeds from sale of assets – voluntary aided schools

33.       The arrangements for dealing with sale proceeds released as a result of a building

            project funded by capital grant are set out in The Education (Grants in respect of
            Voluntary Aided Schools) Regulations 1999 and The Education (Grants in respect
            of Voluntary Aided Schools) (Amendment) (England) Regulations 2002.

34.       The above Regulations set out the arrangements whereby the sale proceeds,
            released as a result of a building project funded by capital grant, will be deducted
            from the governing body’s expenditure. The DCSF applies this policy in all cases
            where proceeds accrue, or are expected to become available, to the trustees,
            governing body or promoters. More information on proceeds of sale can be found
            under Sale of Assets on the TeacherNet website.

 THE LAW

N.B. As legislation is often amended and Regulations introduced, the references made in this Guide may be to legislation that has been superseded. For an up-to-date list of legislation applying to schools, please refer to the GovernorNet website, www.governornet.co.uk

Building Regulations 2000: SI 2000/2531

Building (Approved Inspectors etc.) Regulations 2000: SI 2000/2532

The Education Act 1993

The Education Act 2002

The Education and Inspections Act 2006

The Education and Inspections Act 2006: Schedule 22 and Section 77 as amended by the Act

The Education (Grants in respect of Voluntary Aided Schools) Regulations 1999: SI 1999/2020

The Education (School Premises) Regulations 1999: SI 1999/0002

The Regulatory Reform (Voluntary Aided Schools Liabilities and Funding) (England) Order 2002: SI 2002/906

The School Standards and Framework Act 1998: Sections 43–53 and Schedules 14 and 15 (as amended by Sections 41–43 and 45 of the Education Act 2002 and Section 101 and Schedule 16 of the Education Act 2005)

GUIDANCE

Building Regulations on the Communities and Local Government website

Building Schools for the Future, the website

Capital funding guidance on TeacherNet

Capital Funding for Voluntary Aided (VA) schools in England (2006–7 version), also known as the Blue Book, guidance on TeacherNet

Disability Discrimination Act guidance on TeacherNet

Disposal of Playing Fields, Mukund Patel's letter of 17 July 2007

Health and safety guidance on TeacherNet

Primary Capital Programme on TeacherNet

Planning Portal, the government’s online planning and building regulations resource for England and Wales

The Protection of School Playing Fields and Land for Academies July 2007

The School Premises Regulations, review and guidance on TeacherNet

The Office of the Schools Adjudicator

The Transfer and Disposal of School Land in England: A General Guide for Schools, Local Authorities and the Adjudicator