Agenda Item 10

Report to Cabinet

28 June 2017

Subject: Schools Capital Programme 2017/18-19/20 (Key Decision Ref. No. SMBC1698) Presenting Cabinet Leader of the Council Member:

1. Summary Statement

1.1 This report seeks approval to the next phase of the Schools Capital Programme, 2017/18-19/20 to fund new school places, and expenditure of part of the first phase of the Government’s recently announced Special Educational Needs and Disabilities (SEND) capital funding allocation.

1.2 The proposed projects within the Schools Capital Programme reflect the funding levels and the council’s priority to provide new school places. As reported to Cabinet on 11 January 2017, focus for the Schools Capital Programme now turns to the provision of a sufficient supply of secondary school places across the Borough, as those children born in 2007/08 start to enter year 7.

1.3 In April 2017, the Department for Education / Education and Skills Funding Agency (DfE/ESFA) announced that the Authority’s Basic Need capital allowance for 2019/20 is £13,478,717.

1.4 It is currently projected that an additional 3,845 places will be required in secondary schools by September 2025. To support this next phase of the programme the council’s in-house Architectural team have completed a number of feasibility studies on the majority of remaining secondary schools to determine options for expansion to meet the projected demand for new places from September 2019 onwards.

1.5 Funding to deliver 840 new school places at: Q3 Langley, Years 7 and 8, 390 places: Ormiston Community Academy, 1 form of entry, 150 places: RSA Academy, 2 forms of entry, 300 places, have already been approved by Cabinet to meet the initial demand for new places.

[IL0: UNCLASSIFIED] 1.6 The following projects have been identified to ensure the continued supply of sufficient secondary school places:

George Salter Academy (250 places) Shireland Collegiate Academy (275 places) Kelvin Way, West Bromwich (750 places) (220 places) RSA Academy (minor refurbishment works)

The above schemes will ensure the council can continue to meet the demand for secondary school places across the six towns.

1.7 As reported to Cabinet on 11 January 2017, whilst the unprecedented growth in the birth rate experienced over recent years has started to ease, the Borough continues to receive a high demand for school places, primarily due to increased migration and retention rates. In particular, remains the area where this demand remains high. A number of primary schools in Smethwick have already been expanded to meet demand and pressure for places in the secondary sector is similarly being experienced. In response there is a need to provide additional places in the Oldbury, Smethwick and West Bromwich areas.

1.8 The programme also includes a project for Yew Tree Primary School. Following a bid in Summer 2014 the School has now been successful for inclusion within the ESFA’s national Priority Schools Building Programme (PSBP). The programme is to fund the comprehensive refurbishment or rebuild of the worst condition school buildings.

1.9 The Authority’s decision to expand the school to 3 forms of entry to provide sufficient school places was made on the basis that the ESFA had agreed to include the school in the PSBP. The ESFA’s decision has now confirmed that a total contribution of £1.04m is required to fund the additional half form of entry. Cabinet approval to the allocation of an additional £0.58m Basic Need funding is sought to meet the total cost of the contribution.

1.10 The Schools Capital Programme aligns to service needs so that the council is able to meet its statutory responsibility of ensuring every child in Sandwell has access to a good school place by seeking to build on its commitment to expand successful and popular schools.

1.11 In addition, the Secretary of State for Vulnerable Children and Families has announced national funding to create new school places and improve existing facilities for children and young people with special educational needs and disabilities. The Authority is to be granted a

[IL0: UNCLASSIFIED] total of £1,564,386 over the period 2018/19-2020/21 (£521,462 per annum). Project ‘Evolve’, a comprehensive review of SEND provision across the Borough is well advanced, and the capital allocation can be used to support the project through the provision of new school places. In line with the expansion being experienced through the mainstream sectors, Special Schools are experiencing a proportionate increase in the demand for school places. Cabinet approval is sought to utilise £150,000 from the 2018/19 allocation towards urgent works to provide a new classroom block at (Residential). New places will support the Authority’s pupil place planning strategy for Key Stages 2 and 3.

1.12 It is proposed to meet the estimated capital cost of £13,868,000 from the total available resources of £24,715,816. Cabinet are requested to approve allocation of the capital funding to enable the proposed expansions and projects to be included within the Schools Capital Programme 2017/18-2019/20.

1.13 A full appraisal has been undertaken by Strategic Finance. A copy of the report can be found at Appendix 1. Some risks have been identified as a result of the appraisal and action points recommended to mitigate these risks.

1.14 With respect to the proposed new school at Kelvin Way, West Bromwich, any new school has to be considered under the Department for Education (“DfE”) “presumption” process, that the council will seek proposals to establish an academy or free school. Only if this process is unsuccessful can the council, with the agreement of the Secretary of State, consider establishing a maintained school through a competition. Before deciding whether or not to enter into a funding agreement with any proposer, the Secretary of State will need to be satisfied about their suitability to set up and run an academy / free school.

1.15 An Equality Impact Assessment (EIA) initial screening has been undertaken. The screening identified that there will no adverse impact on people or groups with protected characteristics as a result of the proposals contained within the report. A full EIA is not therefore required. However, it has revealed that as the council has a statutory duty to provide a sufficient number of school places for all children in Sandwell, all groups are potentially affected by the policy of expansion. This proposal demonstrates that this is uniformly applied in response to where pupil demand is expected although size and type of expansion is restrictive as it is dependent on the availability of government capital funding.

Further details are attached for your information.

[IL0: UNCLASSIFIED]

2. Recommendations

2.1 That, funding for the following proposed projects be approved as part of the Schools Capital Programme 2017/18-2019/20:-

George Salter Academy, Davey Road, West Bromwich, B70 9UW; Shireland Collegiate Academy, Waterloo Road, Smethwick B66 4ND; Kelvin Way, West Bromwich (secondary); Wood Green Academy, Wood Green Road, Wednesbury, WS10 9QU; RSA Academy, Bilston Road, Gospel Oak, , DY4 0BZ; Yew Tree Primary School, Birchfield Way, Yew Tree Estate, Walsall, WS5 4DX.

2.2 That, subject to 2.1 above, the remaining £10,847,816 funding be retained until feasibility has been undertaken on proposed schemes for 2018-2021, which will be subject to a further report submitted to Cabinet.

2.3 That, subject to 2.1, 2.2 and 2.5, the Director – Education, Skills and Employment be authorised to award a contract, either:-

(i) through the New Project Development procedure as established under the Strategic Partnering Agreement with Sandwell Futures Limited; or (ii) following a compliant procurement exercise, in conjunction with the the Section 151 Officer, and in consultation with the Cabinet Member for Children’s Services, subject to meeting the criteria as set out in paragraph 3.1.3 of the report.

2.4 That, subject to 2.1, 2.2, 2.3 and 2.5, the Director – Monitoring Officer enter into any legal agreements on terms agreed by the Director – Education, Skills and Employment, as required, to allow building works to be completed on all proposed sites.

2.5 That, in connection with 2.1 and 2.3 above, the following action points identified within the appraisal report be implemented to reduce any risk to the council:-

• Produce project programmes for each scheme within the Schools Capital Programme to ensure that effective project monitoring can be undertaken to aid the timely delivery of each project;

• Review Risk Registers for each project to ensure all risks are identified and can be mitigated adequately;

[IL0: UNCLASSIFIED] • Ensure that a financial appraisal of the proposal for a new school in West Bromwich is undertaken by Strategic Finance and reported to Cabinet for approval;

• Regular financial monitoring updates on individual projects should be provided to the Leader of the Council, highlighting variations of spend against original estimated costs. Remaining funds should be returned to the unallocated Schools Capital Programme;

• That the Council enters into such form of legal agreements as required to allow extension works on all proposed sites; and

• Post project evaluation should include specific outcomes, along with benchmarking of final costs to ensure value for money is achieved.

2.6 That, subject to 2.5 above, approval be given to allocate £150,000 from the Special Educational Needs and Disabilities 2018/19 capital funding to provide a new classroom block at Shenstone Lodge School (Residential), Birmingham Road, Shenstone, Lichfield WS14 0LB.

2.7 That, subject to 2.1 above, approval be given to proceed with the “academy / free school presumption” process to establish secondary provision on land at Kelvin Way, West Bromwich.

2.8 That a further report is subsequently submitted to the Cabinet for approval to submit details of the council’s preferred proposer to the Secretary of State for decision.

Jim Leivers Interim Director of Children’s Services

Chris Ward Director – Education, Skills and Employment

Darren Carter Executive Director - Resources

Contact Officer: Martyn Roberts, Team Lead – Planning, Education Support Services, Education, Skills and Employment Directorate Tel: no. 0121 569 8341

[IL0: UNCLASSIFIED] 3. Strategic Resource Implications

3.1 The estimated cost of the identified new work is £13.9 million and is allocated as follows:

Project Contractor Design F&E Total £000’s £000’s £000’s £000’s George Salter Academy 3,334 603 204 4,141 Land off Kelvin Way 0 665 0 665 West Bromwich (Phase 1) Shireland Collegiate Academy 4,731 404 277 5,412 Wood Green Academy 0 380 0 380 RSA Academy (Phase 2) 380 55 15 450 Yew Tree Primary School 588 0 0 588

Programme Contingency (@5%) 452 105 25 582

School Condition 1,275 225 1,500 SEND capital 129 21 150

10,889 2,458 521 13,868

3.1.1 The direct allocation of Basic Need funding received from the DfE is based on the annual School Capacity return submitted to the Department. With the latest announcement of £13,478,717 for 2019/20 this provides total available resources to the Authority of £24,715,816 to fund the Schools Capital Programme.

Approval to the Schools Capital Programme 2017/18-2019/20 is sought to allocate a proportion of those resources to fund individual school projects and ensure a sufficient supply of school places.

School Condition funding continues to be allocated on a yearly basis and is based on the number of maintained schools the council remains responsible for.

This provides a total available budget of £24.7 million and is made up as follows:

£000’s Unallocated Basic Need resources (as 7,792 reported to Cabinet 11 January 2017)

[IL0: UNCLASSIFIED] Basic Need 2019/20 13,479 SEND capital 521 School Condition 2,924

There is no time limit on the resources being spent.

A programme contingency of 5 per cent has been estimated at £0.58m for the six projects listed in the table in section 3.1 above. If expenditure against contingencies is required this will be reported to members as part of the quarterly monitoring report. Any unspent programme contingencies will be reported for reinvestment in future phases of the Schools Capital Programme.

3.1.2 Without the expansion of the identified secondary schools there would be an immediate shortfall in supply of places to meet demand for places for the academic year 2019/20.

To ensure a sufficient supply of places there is a need to continue to fund expansion of secondary schools to match projected demand.

It is proposed to hold back the remaining £10.85 million to match fund the expected Basic Need allocation 2020/21, in order to fund the first phase of the proposed new school at Kelvin Way, West Bromwich, Phase 2 of and the next phase of the secondary school expansion programme.

3.1.3 For those projects in the programme with a capital value exceeding £100,000, delivery of the scheme will fall within the scope of the New Project Development procedure, as established under the Strategic Partnering Agreement with Sandwell Futures Limited.

A separate procurement exercise(s) will be carried out to identify the most suitable and value for money supplier / suppliers for those projects that will not be procured through the New Project Development procedure. The procurement approach will follow the council’s Procurement and Contract Procedure Rules to ensure that UK and EU legislation is adhered to, and value for money is achieved. In order to ensure a streamlined process, this report requests delegated authority to the relevant Chief Officer, the Director – Education, Skills and Employment to award the contract at the end of the procurement, in conjunction with the Section 151 Officer, and in consultation with the Cabinet Member for Children’s Services.

[IL0: UNCLASSIFIED] Where the outcome of the procurement exercise identifies that the value of the contract is more than that specified in this report, or the council has not received the minimum number of tenders required, then a further report will be submitted to Cabinet to award the contract.

3.1.4 In connection with the proposed new school at Kelvin Way:

Under the academy / free school presumption rules the council is responsible for providing the site and meeting all associated capital and pre/post opening costs. The DfE will provide a one off payment of £25,000 to the successful proposer for legal costs.

The successful sponsor of an academy, who will have a successful track record of attracting funding, would also have the opportunity to secure additional resources through their own DfE funding streams.

The successful proposer will need to consider the financial implications of low pupil numbers in the first few years of operation. Whilst it will the proposer’s responsibility to discuss this with the ESFA at the appropriate time, the Authority is obliged to meet pre-opening and any diseconomy of scale costs. The current school funding arrangements allow local authorities to hold back a contingency for pupil number growth and basic need academies are eligible to be allocated funding from this contingency. With agreement through Schools Forum, Sandwell's criteria allows for such a pupil growth contingency. However, future funding, especially with the proposals for a national funding formula would need to be clarified.

3.1.5 A total of £1.56m SEND capital funding has been announced by the Government for the period 2018/19-2020/21. To accelerate the provision of new special school places it is proposed to allocate £150,000 from 2018/19 to fund urgent works to provide a two classroom block at Shenstone Lodge School (Residential). Project ‘Evolve’ is subject to further review of special school provision across the Borough and a further report will subsequently be presented to Cabinet to detail proposed expenditure for the remaining £1.41m SEND capital funding.

3.2 Risk Implications of the Proposal

3.2.1 The Corporate Risk Management Strategy (CRMS) has been complied with – to identify and assess the significant risks associated with this decision/project. This includes (but is not limited to) political, legislation, financial, environmental and reputation risks.

[IL0: UNCLASSIFIED] Based on the information provided, it is the officers’ opinion that for the significant risks that have been identified, arrangements are in place to manage and mitigate these effectively.

The council’s strategic risk register currently includes an amber risk around school place planning: SR040 - If the LA is unable to exert sufficient strategic control over school place planning and the direction of capital investment, then it will be unable to deliver on its statutory duties. The recommendations above if approved, will assist in the continued mitigation of this risk. If, however, these recommendations are not approved or delayed, this may have the potential to increase the strategic risk assessment to red.

If this report is not agreed, then the council will risk having an insufficient level of school places which is contrary to the council’s statutory responsibility. If there is an insufficiency of school places this will have a detrimental impact on children's future access to school places within Sandwell and the council’s reputation will be detrimentally affected. The risk that the report is not agreed is assessed as amber.

An appropriate programme management structure is in place, and the School Organisation Programme Board meets on a regular basis.

Key programme risks and mitigation include:

▪ The financial downturn and competing capital pressures: - Projects rely heavily on DfE allocations and are not reliant on capital receipts; ▪ Government policy changes could reduce future capital allocations - Phased programme approvals, avoiding unfinanced commitments; and ▪ Failure to accurately anticipate the changing pattern of demand for school places: - Pupil place planning strategy in place; - Schools’ Organisation Programme Board to drive the delivery of Sandwell’s pupil place planning strategy.

3.2.2 Project documentation is being prepared, including a project plan and project risk registers, to ensure effective management. Each individual project is subject to risk analysis and project risk monitoring.

[IL0: UNCLASSIFIED]

4. Legal and Statutory Implications

4.1 In accordance with the Education Act 1996 the Council has a statutory duty to ensure there are sufficient schools available for the children of Sandwell. Any school organisation changes arising out of the development of the projects will be subject to the relevant statutory processes.

4.2 The council shall ensure that any procurement of contracts necessary for these proposals are undertaken in accordance with the public procurement rules, the Council’s Procurement and Contract Procedure Rules and Standing Order Regulations.

4.3 The council’s selection of its preferred proposer for a new school at Kelvin Way, West Bromwich will be subject to the approval of the Secretary of State for Education.

4.4 In accordance with the Education Act 1996 the council has a statutory duty to ensure there are sufficient schools available for the children of Sandwell. Any school organisation changes arising out of the development of the projects will be subject to the relevant statutory processes.

5. Implications for the Council’s Scorecard Priorities

5.1 The recommendations in this report relate to the continuation of a programme that will support all four of the Council’s Scorecard Priorities. The engagement of parents in the feasibility stage of the major projects will be used to encourage active citizenship. Attention to the provision of spaces for physical education and recreation, projects will support active and healthy lifestyles.

5.2 We will improve the educational chances children have in life by ensuring there are enough good school places in the borough.

We will continue to work with those schools that want to remain in partnership with the council by providing the services that they require and continuing to co-ordinate school place planning, capital investment, school improvement activity and school governance options.

6. Background Details

6.1 A satisfactory capital appraisal rating of 70% has been given by Strategic Investment. A full copy of the report can be found at Appendix 1.

[IL0: UNCLASSIFIED]

6.2 Whilst this report seeks approval for the 2017-20 Schools Capital Programme, it should be noted that this forms part of an on-going school place planning strategy covering the period up to 2018 for primary provision and 2025 for secondary, which has identified a need for at least 3,845 new secondary school places by 2025 based on current projections (although this continues to be under review as increased migration and retention could increase this need still further).

6.3 Work will continue to monitor future demand and the projections for new secondary places, with development of further options to meet provision, which will inform the next phase of the Schools Capital Programme.

6.4 In response to the unprecedented rise in the primary school population over recent years, Smethwick continues to be an area of growth, with an increasing pressure on demand for secondary school places. Whilst additional places will be provided at the new Q3 Academy Langley, and from September 2019, Shireland Collegiate Academy have indicated a willingness to expand by 275 places (55 per year), and George Salter Academy by 250 places (50 per year). Both Academy’s will need to undertake formal consultation in connection with their proposed expansions. An additional 150 places are required to serve the Oldbury, Smethwick and West Bromwich areas, and in this respect, further approval is requested to fund the initial design phase of a new 750 place secondary school in Kelvin Way, West Bromwich. Cabinet will be presented with a further report regarding progress on the presumption process to secure a sponsor for the new school.

6.5 A further report will be submitted to Cabinet in connection with funding of the construction phase for Wood Green Academy once design work has been significantly progressed for the proposed project.

6.6 In order to prioritise expansion schemes to provide for immediate pressures for secondary school places, a request to approve funding for Phase 2 of Q3 Academy Langley will be delayed until late Spring 2018 once confirmation is received from the DfE / ESFA on the Basic Need allocation for 2020/21, and a capital programme is prepared for 2018-21.

[IL0: UNCLASSIFIED]

6.7 The opportunity to re-allocate the Kelvin Way site for education purposes has arisen at a time of increasing demand for secondary school places. To establish new provision the council can either select a new provider to open an academy or free school or expand an existing maintained school.

6.8 Any new school has to be considered under the DfE’s “presumption” arrangements which require the council to seek proposals to establish an academy or free school. Only if this process is unsuccessful can the council, with the agreement of the Secretary of State, consider establishing a maintained school through a competition.

6.9 An alternative option would be to extend and expand an existing maintained school, however the council’s options here are extremely limited and there are added complexities and costs of operating a successful school over two sites.

[IL0: UNCLASSIFIED]