College Capital Investment Fund (CCIF), Skills Infrastructure Capital Fund (SICF) and the College Condition Fund (CCF)
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AoC Capital Reference Group FE Capital Summary Paper – March 2014 Date of issue 28 March 2014 Security PROTECT-COMMERCIAL classification Introduction and Background 1 This report provides a high level summary of the capital allocations made by the Skills Funding Agency (the Agency) for the financial years 2013-14 and 2014-15. The report covers the College Capital Investment Fund (CCIF), Skills Infrastructure Capital Fund (SICF) and the College Condition Fund (CCF). College Capital Investment Fund 2 In December 2012, Ministers published the College Capital Investment Strategy and launched the College Capital Investment Fund (CCIF), with £550million of funding confirmed for 2013-14 and 2014-15. The objective of CCIF was to provide capital grant support for renewal, modernisation and rationalisation of the FE college estate with funding being targeted at those colleges in the greatest need of capital investment (colleges with buildings in poor condition and inefficient estates). It was also targeted at projects which demonstrate high value for money and can support growth in the economy. 3 CCIF operated on a 2 phase capital application process – an initial Expressions of Interest (EoI) phase which allowed colleges to outline their proposed project against agreed criteria; and a subsequent detailed application phase. This approach was developed with input from the AoC Capital Reference Group as a way to help manage demand, budgets, project development costs, and sector expectations. 4 The minimum project value for the CCIF was normally £3million unless an exceptional case was made for proposals with a lower project cost. There was no upper limit on project value, although the maximum grant support would normally be £10 million. Projects have to be complete and operational by September 2015, ready for the 2015/16 academic year. Upper Ground Floor, 1 Victoria Street, London, SW1H 0ET T 0845 377 5000 www.skillsfundingagency.bis.gov.uk 5 For projects to be eligible for the CCIF they needed to meet the key underpinning investment criteria identified in the FE College Capital Investment Strategy: i) benefits to learners/supporting economic growth, ii) property and estate considerations and iii) value for money. 6 The £550million CCIF allocation was split £220million in 2013-14 and £330million in 2014-15 with the Agency having no in-year budget flexibility. Colleges were expected to maximise their financial contribution to projects and the Agency expected colleges to provide a minimum funding contribution equivalent to two-thirds of project value. Colleges unable to meet the minimum funding contributions or requested more than the normal £10million grant limit were required to demonstrate a compelling business case for enhanced public subsidy. 7 A robust and comprehensive assessment of all eligible applications was undertaken by the Agency’s relationship, finance and capital teams. Assessments were subject to peer group review and internal moderation to ensure consistency of approach across assessors/geographical areas. The application and assessment process was reviewed in all rounds by an External Moderation Panel. The panel membership included 2 former college Principals on behalf of the AoC and an observer from BIS. 8 In CCIF Rounds 1 to 7 the Agency approved 95 CCIF projects (this includes 1 application that the Agency is minded to approve, subject to provision of additional information and clarification). The total grant approved for the 95 projects is £433million split £114million in 2013-14 and £319million in 2014-15. This will fund a total of £821 million capital investment in the sector. Of the 95 projects approved, just under two thirds (58) were approved with grant of 33% or below. The average grant of the 37 projects approved at a higher grant intervention rate was 79%. Annex 1 lists those colleges with successful detailed applications from CCIF rounds 1-7. Skills Infrastructure Capital Fund 9 The £10million Skills Infrastructure Capital Fund (SICF) was launched as a pilot fund in October 2013. The objective of the fund was to enhance and enable investment in college or training organsation the estate, facilities and equipment. This investment would enable skills acquisition, development and economic growth to a wider range of skills delivery partners. 10 SICF was available to eligible applicants (approved training providers and FE colleges on the Register of Training Organisations, with a direct contract with the Skills Funding Agency in the 2013/14 academic year) on a single stage competitive basis. The fund had two elements: . Capital development projects – including building and enhancing specialist facilities where an urgent need exists. Minimum project value: normally £500,000; and . Purchase of high cost specialist equipment. Minimum eligible purchase price: normally £100,000 exclusive of VAT. 11 Capital grant support for SICF was only available for costs incurred from 2 September 2013 to 31 March 2014 and successful applicants had to incur and evidence sufficient expenditure to draw down grant funding by 31 March 2014. Projects and funded items had to be complete, in place and operational by September 2014. The normal rate of grant support for projects was 33%, however, where organisations could make a compelling case in terms of need, value for money and benefits, the Agency considered an enhanced level of funding up to 50%. 12 The Agency received 115 applications from 90 providers (72 FE colleges and 18 private providers). The Agency maintained its stance adopted in CCIF relating to the receipt of late/unsigned applications; 11 applications were ineligible due to failure to comply with the published guidance. Of the 104 eligible applications, total project costs were £100million with total grant requested of £45million. 13 As with CCIF, a robust assessment and moderation of all eligible applications was undertaken resulting in the Agency approving 16 projects (6 private providers and 10 FE colleges) with total project costs of £13.5million and grant of £4.6million. Prior to receiving any capital grant, private providers were required to provide the Agency with a detailed, formal written State Aid opinion confirming how the project complies with the EU State Aid rules. Annex 2 lists successful SICF applicants. College Condition Fund 14 The College Condition Fund (CCF) was launched in December 2013 with the objective of supporting improvements in college estates condition by making capital funding available for FE colleges with more than 20% of their estates in eMandate condition categories C and/or D. To be eligible for the fund, colleges should not have received more than £30 million capital support from the Agency or LSC (excluding estates acquired via merger). 15 Colleges with 50% or more their estates in condition categories C and/or D were eligible to apply for the first tier allocation of up to £540,000 CCF by 28 January. The Agency subsequently confirmed a second phase of tiered allocations to colleges with between 33% to 49% (tier 2) and 20% to 32% (tier 3) of their estates in condition categories C and D. These colleges were eligible to apply for CCF allocations of up to £520,000 and £500,000 respectively by 18 February. In all cases the Agency expected colleges to provide a 2:1 funding match unless a case for waiver or reduced match was agreed by the Agency’s Finance Team. 16 In total the Agency has approved CCF allocations for 114 colleges; 44 in tier 1, 37 in tier 2 and 33 in tier 3. The total amount of CCF grant awarded is £48.4 million resulting in an investment of £108.6 million to address poor building condition in the FE estate. Colleges with CCF allocations are listed in Annex 3. FE Capital Budget 17 With the CCIF, CCF and SICF, the Agency will achieve a balanced capital budget for 2013-14, and full allocation of available funds for 2014-15. Skills Funding from 1 April 2015 18 From 1 April 2015, Skills Capital Funding (previously FE Capital) will be allocated to FE Colleges and other eligible providers by those Local Enterprise Partnerships (LEPs) that are successful in securing capital funding through the Local Growth Fund (LGF). 19 Under the new arrangements, LEPs will be able to bid to the LGF for access to Skills Capital funding through their Strategic Economic Plan (SEP). It will be for LEPs, based upon their assessment of local economic and skills priorities, to determine how they wish to use any capital funding secured through their Growth Deal. 20 The policy rationale for making £330m of Skills Capital available through the LGF is to demonstrate a commitment to supporting local decision-making, providing LEPs with a significant amount of funding they can access from 2015-16 with which to influence and drive change in the areas they serve. Colleges will need to work with and influence their LEPs to ensure that skills strategies and plans for capital investment feature prominently within their SEP. 21 The Agency, in conjunction with BIS Local, is working closely with LEPs to support them in the development of the skills aspects of their SEPs. The Agency has also offered support to LEPs in the allocation of Skills Capital. Author Catherine Davies Cleared by Mary Rogers Date created 28 March 2014 Annex 1: Colleges with approved detailed College Capital Investment Fund (CCIF) applications in Rounds 1 to 7 Abingdon and Witney College (2 Colchester Institute projects) Accrington and Rossdendale College College of West Anglia (The) Activate Learning Cornwall College Barking and Dagenham College