Select Committee on Deregulation and Regulatory Reform Fourth Report

Imposition and reenaction of burdens

  24. As a result of the reassignment of liability for premises-related work at VA schools, however, the proposal also has the effect of creating new burdens on both governing bodies and LEAs. Additionally, the transitional provisions reenact certain burdens imposed by the existing legislation. These burdens are as set out in the following paragraphs.


  25. Liability for internal capital work; capital items connected with excepted buildings; and some additional capital items, including furniture, fixtures and fittings, will be transferred to governing bodies. These burdens are ameliorated in the following ways:

  • the rate of grant support available from the Secretary of State is raised from 85% to 90%;
  • there would be provision to pay grant at 100% for a five­year period in respect of any agreed backlog of condition­related work in excepted buildings at the point at which liability for them transfers to VA governing bodies. The explanatory memorandum says, "this would ensure that VA schools would not inherit a backlog of such work when taking on the liability, and we consider that this is a sufficient period to allow all the associated work identified as at the point of transfer of liability to be approved for funding";
  • all funds available from the Department for capital work will be available to governing bodies, including that which was previously paid to LEAs for their capital liabilities;[30]
  • VA governing bodies will no longer have to make any contribution towards revenue work, which will now be the responsibility of LEAs (previously they would have had to pay at least 15% of any revenue liabilities falling to them);
  • governing body capital expenditure on excepted buildings which they do not own (see above) will be protected by a requirement on LEAs to reach an agreement with VA governing bodies regarding the distribution of proceeds of sale, should the LEA dispose of such buildings.

26. An additional burden will also be created in that VA schools which do not own those excepted buildings capital items in respect of which they will be liable for will have to keep records of the capital investment they make in them, if that investment is to be protected if the building is disposed of by the LEA.


  27. Liability for external revenue work will be transferred to the LEA. The additional funding needed to meet this new burden would be paid to LEAs by the Department (in lieu of previous payment directly to VA schools). Normally, such funding would be included in the amount allocated to the authority concerned as a result of its Standard Spending Assessment (SSA). However, methods of calculating SSA do not currently take account of the number and size of VA schools in an authority area. For the first year in which the new system would be in operation, therefore, the Department propose to pay the relevant amount directly to LEAs through the "Standards Fund". Thereafter, SSA methodology, currently under review, will be changed so as to ensure that SSA allocations accurately reflect the amounts needed for this new liability.

28. The imposition of a statutory de minimis level, beneath which no expenditure can be considered as capital, could be considered to increase the burden on LEAs associated with their liability for revenue work, especially since the level is currently set (administratively) at only £1000.


  29. The transitional provisions would reenact (in the circumstances described in paragraph 8 above) the burdens imposed on both LEAs and VA governing bodies by the current legislation in respect of projects begun before the commencement of the Order, but not at that point financially complete. In the circumstances described in paragraph 8(b), they would, however, also reduce the burden on the Secretary of State (and affecting VA governing bodies) arising out of the 85% limit on grant, by increasing it to 90%. The purpose of this latter provision is to ensure that schools will not be given an incentive to delay work, or not to claim grant for the work concerned until after commencement of the Order, either of which could lead to a potential underspend on the VA capital baseline in the current year (2001-02).[31]

30   See explanatory memorandum, Annex G. Back

31   Appendix 2, page 33, para 13. Back

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2002
Prepared 5 February 2002