Revised March 2007
Devolved Formula Capital
Guidance Note and Agreement Pro Forma
Community, Foundation and Voluntary Controlled Schools
Introduction
Since the 2000/2001 financial year, schools have received an allocation of Devolved Formula
Capital. This capital grant gives all maintained schools money to invest in their buildings,
grounds and ICT equipment to improve educational standards. In prioritising needs, the DfES
urges schools to consider the longer term responsibilities of governing bodies for the
maintenance of their buildings, grounds and ICT equipment. Priorities should reflect national
priorities and align with those of the Authority’s asset management planning process.
This document sets out the key issues that schools will need to consider when deciding how to
make best use of these funds and should be read in conjunction with advice issued by the
DfES and available on their websites.
Type of project
DfES guidance makes it clear that this devolved capital grant should be spent on the most
pressing priorities, agreed with the Authority, as identified in the Asset Management Plan
(AMP). Schools will be aware of these issues as a result of meetings with their Area Surveyor
and / or district Assistant Education Officer and have ensured that these are cross referenced
into individual school development plans.
Schools’ condition, suitability and sufficiency surveys should help to inform thinking on what
use might be made of these funds. Where schools have building elements which have a
condition rating of 1D or 2D (Urgent or Essential works) the assumption is that the devolved
capital will be used (possibly in conjunction with other funding from the Authority) to improve
those elements of building condition.
The funding has to be used for capital expenditure (as defined by the CIPFA Code of
Practice on Local Authority Accounting in Great Britain: A Statement of Recommended
Practice).
Devolved Formula Capital funding should be used for capital expenditure on school buildings
and not primarily on equipment other than in the circumstance given below. It cannot be used
for general maintenance, redecoration (unless part of a refurbishment scheme), day to day
repairs, purchase of books, software or training nor operating leases. It may not be used for the
hire of accommodation, unless this is a temporary inclusion in a larger capital development
scheme.
ICT Spending
Since 2006/07 Devolved Formula Capital (DFC) includes an element of funding for investment
in ICT equipment.
It is entirely up to schools to decide what proportion of their DFC grant should be spent on ICT,
and the DfES does not calculate indicative figures. Accumulated DFC from earlier years can be
spent on ICT in addition to the 2007-08 allocation.
Whilst ICT capital funding has now been incorporated within DFC, this does not allow for
spending on revenue costs within ICT such as software licences.
Expenditure may be subject to audit.
As a result of a request from Schools Forum, the Authority sought and obtained approval from
the DfES for schools to contribute DFC to the Authority’s Capital Programme in return for the
Authority releasing revenue to contribute towards schools’ Broadband costs. Further approval
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Revised March 2007
has been sought to extend this approach into 2007/08 and a response is awaited. The Head of
Finance will inform schools as soon as a decision is received from the DfES.
In addition, in considering funding large ICT schemes through DFC, schools should consider all
their longer term responsibilities taking into account national policies, and the schools asset
management plan.
Heads with any doubts about the appropriateness of expenditure should contact their district
Assistant Education Officer.
Accessible Schools
The SEN and Disability Act 2001 places a duty on schools to prepare an Accessibility Plan for
improving, over time, accessibility for disabled pupils. Within this responsibility is a need to plan
for access to the physical environment of the school; examples of these improvements include:
ramps, handrails, lifts, doorways, toilets, lighting and acoustics. The LEA takes a strategic
approach to increasing disability access to schools through specific improvements in support of
individual pupils and by incorporating improvements to the physical environment in its capital
projects.
However, schools must also consider what can be done to improve the physical environment of
the school within the devolved resources available to them, including DFC, which has
increased year on year to reflect responsibilities in this context and others.
Further advice on “accessible schools” is available on the Extranet.
Accumulating funds
Schools may wish to consider supplementing their DFC from elsewhere in order to enable a
larger project to be implemented. There is also the option of accumulating formula capital for up
to three years in order to address larger projects.
If a school wishes to accumulate DFC for more than three years to finance a specific large
project, it may do so. In this case, schools should apply for DCC Cabinet approval to carry
forward this funding prior to the end of the financial year in which the money becomes eligible
for claw back. Please contact your district Assistant Education Officer for further guidance.
Due to these new regulations regarding rolling forward funding, it will no longer be possible
for the Authority to re-allocate funding for minor schemes where schools have been
unable to meet the current three year spending requirement.
Monies not expended will be clawed back and reallocated to other school capital
schemes.
Authority schemes
Schools receiving funding for Authority funded capital schemes will be advised of the
required level of contribution required. This is based on the Authority’s policy that when
approving capital expenditure from within its resources (Modernisation, Planned
Maintenance etc) for schemes costing over £100,000, the receiving school will be
expected to contribute 100% of one year’s formula capital after 22% ICT deduction,
whilst schools with projects costing less than £100,000 will be expected to contribute on
a proportionate basis, up to a maximum contribution of 1/3 of the cost of any scheme.
The Authority’s policy of seeking a contribution from DFC towards Authority sponsored
schemes is, in essence, to increase the number of large schemes, which are frequently beyond
the means of individual schools that the Authority can address within any given year. Therefore,
the final decision to include a school capital scheme into the Authority’s Capital Programme
(Modernisation, Targeted Capital or Planned Maintenance) will be dependant on a written
commitment from the school confirming a contribution based on the formulaic calculation as
described above.
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Revised March 2007
Where a school has made a commitment to an Authority scheme, this commitment should be
reserved for the Authority, as, due to accounting procedures this money is not deducted from
school budgets until after completion of the scheme.
Where a school is required to commit to more than one scheme within a financial period this
will be to a maximum of 100% (one year’s DFC allocation less 22% for an ICT deduction).
Bringing forward monies
The DfES scheme allows for one year’s funds to be “brought forward” in order to finance a
larger scheme and Heads wanting to access this arrangement should discuss this situation with
their district Assistant Education Officer. Heads should be aware that any approval to bring
forward DFC will not result in monies being credited to budgets but is, in essence an approval
to overspend that budget heading.
However the Authority has received no confirmation that DFC funding will continue after 200708, hence any anticipation of funding must be entirely at the risk of the School.
Project approval
School Governing Bodies are empowered to approve projects up to £15,000 with the proviso
that the project is within the spirit of both the Asset Management Plan and the Devolved Capital
Scheme.
However, the Authority must still approve all projects over £15,000 in value and which may
affect the schools net capacity, in particular those that:•
increase or reduce the number of, or area of classrooms or;
•
involve new buildings or significant structural alterations or demolition.
For such projects, you should submit the attached notification form B and gain the
agreement of your district Assistant Education Officer before undertaking any commitment. It
would also be wise to consult your School Surveyor who will have a role to play in gaining
Landlord’s approval.
Variations to Allocations
Schools that open in, or move into completely new buildings (or fully refurbished buildings) are
not allocated DFC for their first three years. Consideration should therefore be given, in
advance, to budgeting for potential ICT needs within these years.
Where schools are due to close, the DFC allocation will be limited to essential expenditure, e.g.
remedying defects to achieve disposal and any accumulated DFC will be transferable to the
Authority’s replacement capital scheme.
Where schools are due to amalgamate, at any time other than the start of the financial year, an
adjusted allocation will be made - schools concerned will be contacted individually.
Practical considerations
It is essential that schools secure appropriate professional advice before undertaking any
capital project. The Authority can provide this service, initially through the Area Surveyor. The
level of professional advice required by schools will vary according to the scale and type of
project proposed. Sometimes, architectural advice will be needed; for example in the
production of a masterplan; for others the Area Surveyor or other suitably qualified
professional, will be able to provide the required advice and guidance. Schools should contact
their Area Surveyor initially for estimated costs associated with Authority services.
In addition to Authority guidance, Building Bulletin’s are produced by the DfES providing design
guidance for Primary, Secondary and Special Schools. These guidelines emphasise that “It is
important that the brief for any building project is seen in the context of the overall strategic
masterplan, to avoid work being done in the wrong place or in the wrong order”.
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Revised March 2007
Where Authority support is provided, the funding available is strictly limited, within the terms
outlined above, to the amount of monies and project agreed by Cabinet. Thus any project
agreed by Schools must cover the full cost of the scheme, including professional fees,
planning approval, contingencies etc. It is therefore vital to secure sound professional advice
from individuals conversant with the needs of schools and to budget accordingly. Fees must not
account for more that 15% of the overall project and in practice ought to be less than this with
the proviso that sound professional advice should never be under funded.
Your project may require planning permission, building regulation approval and must comply
with all relevant legislation e.g. Construction Design Management (CDM), Control of Asbestos
at Work Regulations, etc. It is essential that your professional adviser addresses all these legal
requirements.
Heads must agree their projects with the owners of the school buildings. In the case of
Voluntary Controlled schools, the buildings are usually owned by the Diocese, and heads will
need to seek Diocesan approval for work. For Foundation schools, the Governors own the
buildings and are empowered to make decisions. In all other situations, where the Authority is
the landlord, applications for Planning & Building Regulations approval must be made through
County Property, (c/o Glen Oxley), Chatsworth Hall, Matlock. DE4 3FW.
Devolved Formula Capital grant is distributed through the Standards Fund and thus the
conditions of Standards Fund schemes also apply.
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Revised February 2005
Form B
2007-08 Devolved Formula Capital – Project Requiring AUTHORITY Approval
Name of School
Current Devolved Formula Capital Balance
£
Total estimated cost of project (including fees)
£
Date:
Brief description of the overall proposal
Justification for the proposal
Urgency
Value for money
Contribution to improving
standards and attainment
for AUTHORITY
use
Received
Approved
Application DFC Scheme
YES/NO
Officer
referred to Property
Division
Date
Copy to School
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