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Capital Works

As for leases and licences, permission is required from the Site Trustee for any alterations to buildings.

In terms of funding:

  • Basic Needs funding is available via the LEA for those cases where there is not sufficient capacity in existing schools for the local population. This does not apply when a successful school is attracting children at the expense of others nearby.
  • Major capital expenditure
    • Voluntary Controlled Schools are dealt with by the LEA
    • Voluntary Aided schools bid into the LCVAP pot (see separate notes)
    • Academies apply for funding to the CIF
  • Smaller capital expenditure
    • Voluntary Controlled Schools receive a Devolved Formula Capital (DFC) grant each year and manage this alongside their budget
    • Voluntary Aided Schools also receive DFC – see separate notes
    • Academies have an equivalent capital allowance built in to their Annual Grant.

LCVAP

Local Education Authority Co-ordinated Voluntary Aided Programme – LCVAP

Some notes about LCVAP for background or as a reminder.

  • LCVAP funds the larger capital works for VA schools
  • A pool of funding available from Education Funding Agency via the Local Authority to be allocated amongst VAT schools each year
  • Allocation is agreed between Church of England Diocese (via LDBE), Roman Catholic Diocese and Local Authority
  • The funding available (under £500,000 for 23 CofE schools in the Diocese at 100%) is approximately one quarter of the amount needed each year
  • Projects must run within a funding year – (1 April to 31 March)
  • It has been announced that the amount of funding made available for 2015-16 will be maintained through to 2018-19, except that it will reduce when VA schools convert to academies or join a multi-academy trust.

Practicalities and administration – reminders and changes

  • VAT may not be reclaimed on LCVAP projects. Contractors and advisers will usually quote a VAT-exclusive amount: if they say £10,000, the actual cost is £12,000
  • Very often when costing a project we concentrate on the headline cost of works – contractor’s tender price of, say, £100,000 (which means £120,000), but on top of that there will typically be professional fees of around 15% (+ VAT), so the actual project cost is £138,000
  • Have you included fixtures, fittings and furniture?
  • LCVAP will only actually pay up to 90% of project costs. So for the £138,000 project, the governors (typically the school itself) will have to find £13,800
  • LDBE is able to help by allowing this to be paid over 3 years, but it must be settled in full if the school converts to an academy or joins a multi-academy trust.

It can be very confusing trying to keep a handle on figures with and without VAT and grants stated at 100% (because this is how we usually talk about the LCVAP allocated amount) or 90% (because this is the actual cash grant).

In October 2014 the way the LCVAP is administered was changed.

  • We must still submit an Application for Approval in order to secure the funds, with detail of tenders and an outline profile of spending.
    • Formal tendering is a lengthy and costly process: Governors have discretion as to whether this is necessary for their project or whether less formal quotes can be requested.
    • There is no rule about how many tenders or quotes must be obtained, but Governors have a duty to ensure value for money as always.
    • It is necessary to be very careful that the tenders or quotes are comparable and to choose the best (maybe not the cheapest) option. Professional advisers will help with this.
  • LCVAP monies will then be received by LDBE in accordance with the profile of spending. Contractors and suppliers will be paid by LDBE only after the architect’s certificate or Governors’ confirmation is received
  • Each year LDBE is required to certify the amount of LCVAP spent
  • A sample of projects will be selected by the Education Funding Agency for detailed audit.

Devolved Formula Capital – DFC

Voluntary AIDED Schools

  • DFC funds the smaller capital works for all schools
  • Each school is given a sum calculated with reference to the number on roll early in the funding year (1 April to 31 March)
  • For almost all VA schools, the grant comes to the Diocese and is held in individual CBF deposit accounts

Practicalities and administration – reminders and changes

  • VAT may not be reclaimed on DFC projects. Suppliers will usually quote a VAT-exclusive amount: if they say £2,000, the actual cost is £2,400
  • DFC will only actually pay up to 90% of project costs, so for the £2,400 project, the governors (typically the school itself) will have to find £240
  • Project value must be at least £2,000
  • Typically, the school will ask the Diocesan Board of Education (DBE) to raise purchase orders for the project, the supplier invoices – addressed to the Governors – are sent to DBE for payment:
    • Fao Bridget Starling
    • Lincoln Diocesan Board of Education, 103 Newport, Lincoln, LN1 3EE
  • DBE will settle the invoice (so long as you confirm your approval) in full. 90% of the cost will then be drawn from the school’s CBF deposit account and the remaining 10% requested from the Governors.

In March 2015 the way the DFC is regulated was changed -

  • If your DFC is held by DBE, your school will not be required to make a year end declaration
  • DBE must still make that declaration on a summary form
  • A sample of declarations will be selected by the Education Funding Agency for detailed audit.

The three year rule and clustering

  • If not spent within 3 years, the DFC will be clawed back: ie, at 31 March the school should hold at most the last 2 years’ DFC grant
  • We can share surplus DFC around the Diocese to help avoid losing it to claw-back.
    • When these rules were introduced, VA schools in the Diocese of Lincoln agreed to these clustering arrangements
    • DFC grants are very much smaller than used to be the case so the problem of surplus has almost disappeared but it can still be very helpful
  • DFC can be used to supplement an LCVAP project, but not to pay the 10% Governors’ contribution