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Property


1. Voluntary Schools

Charities

Voluntary (aided or controlled) schools usually comprise two charities that work interdependently, the governing body, a corporate body created under the SSFA 1998, which runs the school the charity usually called the foundation, which holds the land and buildings on trust for the provision of a school and/or for specified religious and educational purposes.

Each of these charities has its own charity trustees. Governors are charity trustees. Refer to Assistant Director Business & Premises for information of the trustees of the foundation.

The ‘school’ is the charitable activity of the governing body, not an entity in itself.

Use of the site

It is implicit in the purpose of the charity that the governing body can use the site for its charitable activity ‘school’ without lease, licence or other agreement.

The governors have ‘control of the premises¹’ to decide on occasional or regular lettings. Governors also decide on significant other uses e.g. Pre-School, Out of Hours Clubs etc. Where these are not run by the governing body, the foundation trustees will be party to the legal agreement that allows the other party to occupy the site. The legal agreement will be a lease or licence. The legal agreement is on commercial terms.

The governing body should not agree to a use of the premises that is contrary to the purposes and practices of the Church of England.

The governing body should not agree to a use of the premises that is contrary to the purposes and practices of the Church of England. For advice on what is ‘contrary’ consult vicar.

The governing body can be directed by the Local Authority to allow use for certain purposes e.g. youth work. This rarely happens.

Legislation allows for certain uses e.g. for political meetings before elections.

Only the Foundation governors of the governing body can decide the use of the premises on Sundays.

Revenue or Capital Expenditure

All revenue work to the premises is LA liability, but the funding is delegated to schools being part of the Direct Schools Grant (DSG). There is no governing body contribution to revenue work. All work costing less than £2,000 is automatically revenue expenditure.

All capital work at Voluntary Controlled (VC) school premises is LA liability, but certain responsibilities will have been delegated to schools in agreement with the Schools Forum.

All capital work at Voluntary Aided (VA) school premises is governing body liability except work to the playing fields.

Here are some examples that are intended to provide guidance on how to decide what might be regarded as revenue (paid for from revenue budgets) and capital expenditure (which can be met from capital grant).

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 damaged furniture 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

Capital Includes - Purchase of computer hardware and software where these are to be capitalised. However capital cannot be used for leasing of IT equipment and warranties as these must be funded from revenue

Capital Grant

Devolved Formula Capital (DFC)

DFC is allocated annually to all schools on a formula. As VAT cannot be reclaimed by VA schools their DFC allocations are greater.

The local authority holds grant for VC schools. There is a LA process for accessing and recording the DFC grant.

For VA schools the Education Funding Skills Agency directs the grant direct to a separate Governors bank account.

VA school governing bodies contribute 10% of the grant.

The EFSA undertake an annual assurance exercise direct with the Governing Body of the School.

School Condition Allocations

This is grant distributed to a ‘Responsible Body’ for allocation on priority condition work. Priority condition work are those items that if left unattended could close the school e.g. boiler replacement or renewing a flat roof.

The ‘Responsible Body’ for VC schools is the Local Authority; for VA schools their diocese.

The VA strand of Condition capital is the Locally Co-ordinated Voluntary Aided Programme (LCVAP). LCVAP is an annual programme that runs with the financial year (April to March). VA head teachers receive a letter from the Diocese during the Autumn Term inviting them to submit a bid for funding in the next financial year. The bid includes; what the work is, why it needs to be done; the budget cost; how long it will take. VAT is applicable to condition works. Charities cannot reclaim VAT.

Advice should be sought from a Principal Designer (the Diocese holds a list of “approved” Principal Designers. School governors contribute 10% of the grant. A few VA school foundations have endowment funds which may assist governors with their liabilities. Diocesan consent is required for capital works above £10,000.

The DfE Blue Book provides guidance on VA Capital.

Approval should be sought for any capital work on buildings by completing the attached forms.

Key

VC - Voluntary Controlled

VA - Voluntary Aided

DfE - Department for Education

LA – Local Authority

EFSA – Education Funding Skills Agency

2. Academies

Hereford Diocesan Board of Education - Guidance for Church of England Schools moving to Academy Status

Charities

Standalone academies

Academies comprise of three charities that work interdependently.

i) The academy trust (academy proprietor) is the charity. The academy is the charitable activity of the academy trust.

ii) The governors of the academy trust are charity trustees and company directors.

iii) The charity usually called the foundation, which holds the land and buildings on trust for the provision of a school and/or for specified religious and educational purposes

Groups of academies

An academy trust that run a number of academy schools is called a multi-academy trust. The above three charities applies but;

  • the academy trust is one single charity
  • the directors of the academy trust are the charity trustees and company directors
  • each individual school may have its own governors (sitting on a local governing body), but in this arrangement they are not charity trustees; they are sub-committees with delegated authority.
  • Use of the site

    Unlike Voluntary schools academies occupy the premises through formal agreements.

    The Playing Fields

    These are usually owned by the local authority. The agreement is a 125 year lease. The Academy Trust is responsible for maintenance and insurance. Consent is required for works. A sub lease cannot be granted

    The Buildings

    The agreement for the land and buildings owned by the charitable foundation is the Church Supplemental Agreement (CSA). It is most akin to a Licence that allows the academy trust to occupy whilst it fulfils the purposes of the foundation. The academy trust is responsible for maintenance and insurance. Consent is required for works. Insurance is to be in the joint names of the foundation and the academy trust. The foundations assets are not to be valued in the academy trust accounts

    Capital and Revenue Expenditure

    The definitions used in the voluntary schools section above apply. The academy’s Funding Agreement with the Secretary of State applies.

    Capital grant

    Devolved Formula Capital (DFC)

    The formula allocation for VC schools applies. DFC is paid to the academy trust.

    Condition Improvement

    Condition Improvement Fund (CIF)

    This is the equivalent fund for academies for condition work. It is subject to a competitive bid process.

    Details of the annual fund can be found at

    www.gov.uk/guidance/condition-improvement-fund

    Remember the Church Supplemental Agreement requires approval to works.

    School expansion

    The Local Authority has the duty to ensure sufficient school places are provided. Governing bodies cannot be directed to expand their school. The process should be one of agreement.

    The LA responsibility to provides places does not automatically mean it commissions and undertakes building work at VA schools or academies. This should be by agreement and protect the governors’ premises responsibilities by way of collateral warranties from the contractor and any party with a design role.