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.
BURDENS ON GOVERNING BODIES
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.
BURDENS ON LEAS
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.
TRANSITIONAL PROVISIONS
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
|
