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Agenda Item No

The Vale of Glamorgan Council

Cabinet Meeting: 29 July 2013

Report of the Cabinet Member for Children's Services

Capital Loan Scheme for Schools

Purpose of the Report

1. To seek Cabinet approval for the Capital Loan Scheme for Schools.

Recommendations

1. That the Capital Loan Scheme for schools, attached at Appendix 1, be approved and implemented with immediate effect to enable planning and tendering of works to progress over the summer break.

2. That the 2013/14 Capital Programme be amended by £300,000 to include the scheme which is to be funded from the Schools Rationalisation and Improvement Fund.

3. That the Chief Learning and Skills Officer has delegated powers to receive and approve or otherwise, loan applications from schools.

Reasons for the Recommendations

1. To ensure the Council has an approved scheme.

2. To enable to scheme to proceed this financial year.

3. To ensure decisions are taken in accordance with the scheme.

Background

2. Capital investment in school buildings and education resources can be an important driver of pupil attainment and school improvement. A number of schools have building improvements highlighted in school inspection reports. Such projects might be a priority for the individual school but would not be considered a priority for the Council when compared to competing and increasing demands for limited capital funding across the Council.

3. Schools often undertake works of a capital nature but are limited to the extent of the works by the funding available. In most cases the only way schools can afford the larger and more expensive schemes is to accumulate what might appear to be excessive balances over a number of years.

4. The Capital Loan Scheme for Schools will assist schools to deliver projects in a shorter timescale without the need of accumulating excessive balances. This should eliminate high balances in most schools and avoid peaks and troughs in balances where schools save year on year to fund a project and then spend the accumulated balance on the project.

Relevant Issues and Options

5. The Capital Loan Scheme for Schools is attached and outlines the process and information required from the school in support of the application. Loans cannot be used for staff costs or day-to-day running expenses. 

6. Each application will be considered on its own merits and will be considered in relation to the need for the project, the expected outcomes and the funding available.

7. The scheme also outlines that such loans can only be approved if the school is able to demonstrate that repayment will not put the school budget into a deficit. Schools with excess balances would be expected to use all or most of the excess balance to reduce the level of the loan required.

8. For nursery and primary schools the size of the loan should not exceed 10% of the school’s delegated formula budget.  Applications from secondary and special schools will be limited to 5% of their delegated formula budget; however, schools may be able to borrow larger sums providing the funds are available and the school can demonstrate that it can repay the loan within the agreed period. The minimum loan will be £10,000.

9. The funds available will be limited to £300,000 per annum and depending on the demand it will be necessary for applications to be prioritised in relation to the Council’s school investment priorities and school inspection reports.

Resource Implications (Financial and Employment)

10. The Scheme should eliminate the need for schools to accumulate excessive balances thereby enabling them to spend their funding on pupils in school in the year in question rather than future years.

11. For nursery and primary schools the size of the loan should not exceed 10% of the school’s delegated formula budget applications from secondary and special schools will be limited to 5% of their delegated formula budget

12. The funding for the Scheme will be the Schools Rationalisation and Improvement Fund, funds available will be limited to £300,000 pa and depending on the demand it will be necessary for applications to be prioritised in relation to the Council’s School Investment priorities and school inspection reports.

13. The schools will be required to adhere to the Council's Financial Regulations and Standing Orders regarding any expenditure incurred in relation to the school and its resources and operate within the conditions of the Council's Fair Funding Scheme for Financing Schools and any relevant legislation and regulations.

14. Interest will be charged on the value of the loan based on the Public Works Loan Board (PWLB) rate equal instalment principle calculated at the time the loan is agreed and fixed for the term of the loan; as an indication the current PWLB rate is 1.41% for loans between 2.5 and 3 years. Repayments will be made over a period of a maximum of 5 years.

Sustainability and Climate Change Implications

15. This scheme is intended to contribute to the delivery of education and improvement of school buildings. Investments to reduce carbon emissions will be considered alongside other applications.

Legal Implications (to Include Human Rights Implications)

16. There are no legal implications arising from this report.

Crime and Disorder Implications

17. There are no crime and disorder implications arising from this report.

Equal Opportunities Implications (to include Welsh Language issues)

18. The scheme applies to all local authority maintained schools.

Corporate/Service Objectives

19. The objectives of the scheme are consistent with the Council's priorities to ensure that learning provision meets changing educational needs and that the learning environment's stimulating, safe, healthy, secure and efficient, ensuring learners have access to an appropriate range of high quality provision.

Policy Framework and Budget

20. This is a matter for Executive decision.

Consultation (including Ward Member Consultation)

21. Not applicable.

Relevant Scrutiny Committee

22. Lifelong Learning.

Background Papers

None.

Contact Officer

Ian Teagle, Operational Manager - School Support

Officers Consulted

Paula Ham - Head of Strategic Planning & Performance

Clive Teague - Head of Financial Services & S151 Officer

Alan Jenkins - Head of Accountancy & Resource Management

Jane Wade - Operational Manager (Property)

Jodi Winter - Operational Manager (Legal Services)

Responsible Officer:

Jennifer Hill, Chief Learning and Skills Office

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