Solar Panels on School Buildings

Environment Sustainability & Highways Major Programmes & Infrastructure

School Contributions to Maintenance Programme

Author Daniel Stanesby, David Gatheral, Yannick Stupples-Whyley

Date 19th September 2012

Status Formal Issue for Schools Forum

Version Distribution Head of Infrastructure Delivery Schools Children and Families Finance

Final Distribution Cabinet Member for Finance and the Transformation Programme

Classification Internal

Version History Number Location Version 1.0 First draft issue 2.0 Updated draft issue 3.0 Updated formal issue 4.0 D:\Docs\2017-12- Updated based on consultation 28\0076f06ff2bed14b56b73b50badb feedback. 5032.doc

of 9 Contents

1. Objective...... 3 2. Background...... 3 3. 2012/13 Contribution Approach...... 4 4. 2012/13 Contributions Analysis...... 5 5. Contribution Options...... 5 Appendix 1...... 8 Appendix 2...... 9

of 9 1. Objective

1.1 The objective of this paper is to explain the history and methodologies for calculating schools’ contributions to capital maintenance projects, present a number of options, and make a recommendation.

2. Background

2.1 In 2004 maintenance work was prioritised by analysis of condition survey data and high priority work at each school was listed in a letter to each school. Head teachers were invited to bid for that work to be done by firstly setting out the effects the maintenance would have on improving the operation of the school and secondly by declaring an amount of the school’s own money that they would contribute to the work. Decisions on what funding would be undertaken were decided based on these bids.

2.2 In 2006 or thereabouts, the prioritisation method changed because it became clear that the approach was not creating a consistent and fair way of prioritising the amount of work done. This meant that work not likely to close schools or pose risk to health and safety would be carried out at schools with the best understanding of the process, while boilers and dangerous roofs at schools that hadn’t grasped the importance of the bid process, or where the email/letter containing the bid forms hadn’t even reached the appropriate person, missed out on maintenance projects.

2.3 The new school maintenance prioritisation process relied on the ECC professional property consultants advising what maintenance would be most likely to prevent school closure and minimise risk to health and safety. School contributions were sometimes requested during conversations but the method of determining the level of contribution is unknown and it was certainly not a formulaic method.

2.4 In 2009/10 a method of calculating contributions was proposed and approved by the ECC Asset Management Consultative Group. This formula and accompanying information is set out in Appendix 1.

of 9 3. 2012/13 Contribution Approach

3.1 During this year it was felt that the formula could be simplified as well as adjusted to produce more appropriate contributions from schools. This was because the criteria concerning the age of the building and the flexibility of the school didn’t seem to be useful. The revised contribution formula is set out in Appendix 2.

3.2 Formula Capital Grant (FCG) that is devolved to schools for capital projects, which includes maintenance, has been severely reduced over the past two years and is now around 20% of prior year levels. In recognition of this fact the calculated contribution has been capped. However, in all cases where a contribution is calculated, the school’s FCG budget is reviewed and where schools have a healthy balance, and it is felt justified, a larger contribution is requested. Whilst this approach is not entirely formulaic it does allow the flexibility to agree a contribution that maximises available funding whilst being reasonable.

3.3 Due to the reduced capital budgets there are instances where a project has a borderline score for being successful to receive funding. In some cases these projects have the potential to close a school or cause disruption but because of the restricted budget the Authority is unable to fund the work. On these occasions the school’s FCG balance is investigated and where a healthy balance exists a “joint funding” arrangement is offered to the school. In recent months the Authority has also received letters from schools offering their FCG balance in support of work that might otherwise be deemed not serious enough to be awarded funding. By employing these type of joint funding arrangements the Authority is able to implement the maintenance work and achieve better value for money.

3.4 By taking the approaches set out above Infrastructure Delivery believe that it is able to have a flexible arrangement that can ensure school contributions are sought wherever possible and are justified to the school based on sound analysis of the maintenance issue balanced against available funding. This assists with acceptance of the contribution by the school and ensures that opportunities to collect contributions are maximised.

of 9 4. 2012/13 Contributions Analysis

4.1 During 2011/12 the total contributions from schools received was circa £136,000, which based on a £9m budget worked out to approximately 1.5%.

4.2 To date the 2012/13 method of school contributions has been much more successful and we have already identified £98,000 of contributions, which is 2.7% of the £3.7m programme. With 7 months remaining it is anticipated that this figure will increase further.

5. Contribution Options

Option 1: Continue With 2012/13 Methodology

5.1 Pros  Allows flexibility to maximise the potential for getting an appropriate level of contribution.  The level of contribution is based on analysis of the situation therefore is justified and fair.  Takes into consideration schools that have pro-actively managed the maintenance of their buildings.  Encourages schools to maintain their buildings by rewarding them with a lower contribution to larger scale maintenance projects.  This policy has already been agreed in principle with the AMP Consultative Group

5.2 Cons  Small to medium level workload to calculate the contribution and negotiate with the schools.  Difficult to establish the expected school contributions in a year, as dependent on specific schemes, hence it is difficult to predict overall income level.

of 9 Option 2: 2012/13 Methodology with Contribution Cap Removed

5.3 Utilise the current methodology but with no cap on contributions

5.4 Pros  Has the potential to increase the level of contributions.  Allows flexibility to maximise the potential for getting an appropriate level of contribution.  The level of contribution is based on analysis of the situation therefore is justified and fair.  Takes into consideration schools that have managed the maintenance of their buildings.  Encourages schools to maintain their buildings by rewarding them with a lower contribution to larger scale maintenance projects.  The principles of the policy are already agreed.

5.5 Cons  Medium level of workload to calculate the contribution and negotiate with the schools.  Has the potential to increase the number of appeals against the calculated level of contribution.  Difficult to establish the expected school contributions in a year, as dependent on specific schemes, hence it is difficult to predict overall income level.

Option 3: Minimum Contribution From FCG

5.6 Capital responsibilities are currently split between schools and the Authority, where schools are responsible for capital works between £2,000 and £10,000 and the Authority is responsible for all works where the project value is £10,000 or more. This option proposes to apply a standard minimum school contribution for all maintenance project set at £10,000.

5.7 Pros 5.7.1 Simple to implement as no calculation is required.

5.8 Cons 5.8.1 Schools may not have £10,000 to contribute. 5.8.2 FCG is devolved to schools for a number of purposes and is particularly used to purchase ICT and other equipment that assist the pupils with their learning needs. This level of minimum contribution is likely to leave schools with little or no FCG. 5.8.3 Schools are likely to become disgruntled and either appeal or refuse to pay. 5.8.4 Schools that have managed their buildings well and demonstrated good stewardship will be penalised by a high contribution. This may encourage schools to avoid pro-active maintenance of their buildings.

Option 4: Minimum 10% Contribution from Revenue Balance

of 9 5.9 This option involves schools being required to contribute 10% of their revenue balance as at the end of the previous financial year. Maintained school’s revenue balances increased by £17.783 million (58.17%) to £48.354 million at 31 March 2012.

5.10 Pros 5.10.1 Utilises school revenue balances.

5.11 Cons 5.11.1 Schools may have earmarked their revenue balances and therefore 10% may not be available to contribute to capital maintenance schemes. 5.11.2 Whilst balances have substantially increased not all schools have large revenue balances therefore 10% may be a small contribution. Schools with large revenue balances will feel they are being treated unfairly as schools with lower revenue balances will contribute less. 5.11.3 If a blanket agreement is reached, revenue balances are likely to reduce as schools will spend more so that their contributions are lower. 5.11.4 Difficult to establish the overall expected value of contributions in a year, as dependent on revenue balances.

of 9 Appendix 1 2011/12 School Contributions to Capitalised Maintenance Schemes

This method of determining appropriate level of school contribution to capitalised maintenance schemes has been developed by Atkins in partnership with Essex County Council and is designed to be clear, transparent and consistently applicable to all schemes. Schools will be expected to contribute to capitalised maintenance schemes being delivered in this and future financial years.

In 2010/11, the contribution was made up of two parts. Firstly, a fixed contribution of £3000 for a secondary school and £1000 for a primary school and secondly, a variable amount calculated by assessing the four criteria below. In 2011/12, the fixed contribution has been removed to reflect the reduction in Devolved Formula Capital.

The four criteria are building age, stewardship, benefit and summer holiday work. Each criterion is scored and these scores are aggregated and converted to a percentage as per table 1 below. This is the percentage of the total cost of the project that will be added to the fixed sum to make the total contribution.

Schools can appeal the contribution amount with Essex Property and Facilities if unhappy with the decision.

Contribution Criteria and Scoring

1) Building factor - the age of building. An older building requires higher maintenance than a newer building, therefore the contribution on an older building is less. 0 = Built before 1945 and temporary buildings 1 = Built between 1945 and 1976 2 = Built after 1975

2) Stewardship factor - the level of maintenance carried out by the school. The higher the amount of demonstrated maintenance, the lower the contribution. 0 = Significant evidenced maintenance 3 = Some evidenced maintenance 6 = No evidenced maintenance

3) Benefit factor - the benefit the school may gain from the work. Resultant energy savings or alternative material usage which removes/reduces a maintenance liability will increase contribution from the school. 0 = No benefit 2 = Benefit less than 5% of project value 4 = Benefit more than 5% of project value

4) Summer holiday factor – Any work that the school insists be carried out during the summer holiday but which similar work has been successfully delivered during term time at other schools. The school will contribute to the premium in prices for summer holiday work. 0 = School will accommodate term time access or work can only be carried out during holiday 2 = School will not accommodate term time access where past experience demonstrates that this could be achieved

Additional contribution Total score Secondary Schools Primary Schools <5 0% 0% 5 2% 1% 6 4% 2% 7 6% 3% 8 8% 4% 9 10% 6% 10 14% 8% 11+ 16% 10%

of 9 Appendix 2 2012/13 School Contributions to Capitalised Building Maintenance

Method Statement This method of determining appropriate level of school contribution to capitalised maintenance schemes has been developed by Atkins in partnership with Essex County Council and is designed to be clear, transparent and consistently applicable to all schemes. Schools will be expected to contribute to capitalised maintenance schemes being delivered in this and future financial years.

The criteria are stewardship and benefit. Both criteria are scored, aggregated and converted to a capped percentage as per table 1 below. This is the percentage of the total cost of the project that will be added to the fixed sum to make the total contribution.

Schools are able to appeal the contribution amount with [email protected].

Contribution Criteria and Scoring

5) Stewardship factor - the level of maintenance carried out by the school. The higher the amount of demonstrated maintenance, the lower the contribution.

0 = Significant effective maintenance 1 = Significant partially effective maintenance 2 = Fair amount of effective maintenance 3 = Fair partially effective maintenance 4 = Limited partially effective maintenance 5 = Limited and ineffective maintenance 6 = No evidenced maintenance

6) Benefit factor - the benefit the school is likely to gain from the work. Energy savings or alternative material usage which removes/reduces a maintenance liability will increase required contribution.

0 = No benefit 1 = Benefit less than 1% of project value 2 = Benefit less than 3% of project value 3 = Benefit less than 5% of project value 4 = Benefit more than 5% of project value

Total score Secondary Schools Primary Schools <4 0% 0% 4 7% capped at £7,000 6% capped at £6,000 5 9% capped at £9,000 7% capped at £7,000 6 11% capped at £11,000 8% capped at £8,000 7 13% capped at £13,000 9% capped at £9,000 8 15% capped at £15,000 11% capped at £11,000 9 17% capped at £19,000 13% capped at £13,000 10 20% capped at £20,000 15% capped at £15,000