03 March 2009

£919m ACCELERATION FOR SCHOOL BUILDING PROJECTS IN NEXT 12 MONTHS

Thousands of school modernisation projects across England can start 12 months early after £919 million was brought forward to boost the construction industry, Children’s Secretary Ed Balls and Schools Minister Jim Knight announced today.

More than 100 local authorities in England will share £499m brought forward from 2010-11 to the coming financial year, after bidding for capital investment made available in last November’s Pre-Budget Report.

Mr Balls has also accelerated another £390m of capital funding devolved to direct to every school head in England to invest in smaller projects as they see fit – from building new classrooms or science laboratories to fitting out new gyms or ICT facilities. A further £30m is now available for play areas

The announcement is a key plank of the Government’s fiscal stimulus package to boost the economy in the current downturn.

It means that overall schools capital spending in 2009-10 will be will now be £7.943 billion – up from under £700m a year in 1997.

Mr Balls also welcomed new measures to support long-term public capital investment programmes by enabling private finance to keep flowing into the Building Schools for the Future programme (BSF) and other PFI-funded projects, announced today by the Chief Secretary to the Treasury.

BSF is the unprecedented programme to rebuild or refurbish the entire secondary school estate in England – which will see the vast majority of local authorities fully completing their programmes by 2020 and the remaining ones in the closing stages.

Children’s Secretary Ed Balls said:

“Today’s measures are a vital boost for our unprecedented school building programme – with an immediate cash boost over the next year to accelerated smaller modernisation projects, alongside further longer-term financial support for BSF.

“The construction industry is one of the keys to a strong economy. We will never forgive ourselves if we turn our back on it during the current tough times and do not sustain it for the future.

“Accelerating £919m by 12 months is going to give immediate support to thousands of small and medium-sized businesses fitting out these new facilities.

“We’ve transformed the quality of school facilities – with 1100 new or rebuilt schools in the last decade, 27,000 new classrooms and fantastic new facilities springing up across the country. Every school and 116 local authorities can now bring forward planned modernisations and refurbishments instead of waiting for another year – meaning children and teachers can benefit from top quality, new facilities sooner.”

Schools Minister Jim Knight added:

“I welcome the Treasury’s announcement today giving further support to major public building programmes in the face of tightened lending in the financial markets. This gives us another important tool to support our unprecedented secondary school building programme on track.

“Overall, BSF is well-placed to weather the current challenging times in the finance sector – and though we are not out of the woods, there are positive signs that private lenders are still supporting the once-in-a-generation building programme.

“BSF projects continue to be signed off with the 29th local authority reaching financial close last month on a £50m PFI deal; 12 financial institutions, including six new players in BSF, being in the market to finance school PFI projects; and we have secured a commitment in principle from the European Investment Bank (EIB) for £300m to support BSF schemes that have PFI investment – which we expect to be approved shortly.”

The full details of today’s capital acceleration package are:

  • £499 million allocated to 116 local authorities who bid for £800 million capital made available in the Pre Budget Report to be brought forward from 2010-11 allocations to 2009-11. It includes:
    - £235 million for Local Authority Modernisation Grant
    - £76 million for Primary Capital Programme
    - £50 million for Locally Controlled Voluntarily Aided Programme
    - £138 million for Targeted Capital Fund for 14-19, SEN and disabilities fund
  • £390 million is being allocated a year early direct to every headteacher in the country – bringing forward 40% of all Devolved Formula Capital allocated for 2010-11 to 2009-10. A further £5.1 million is being allocated direct to academies. It means:
    - a typical unmodernised primary school of 250 pupils will now get £47,950 this year, including £13,700 brought forward from their 2010-11 allocations. A primary newly built, rebuilt or refurbished in the last decade will now get £23,975 up from £17,125.
    - a typical unmodernised secondary school of 1000 pupils will now get £158,200, including £45,200 brought forward. A secondary newly built, rebuilt or refurbished in the last decade will now get £79,100 up from £56,500.
  • £30 million of investment for play facilities brought forward from 2010-11 to 2009-10.

All accelerated spending will be taken off the 2010-11 local authority and school allocations. Ministers confirmed that 2010-11 capital allocations remain available for all local authorities to bring forward, including the 33 local authorities who have chosen not to bid so far.

In a separate announcement today, the Department for Children, Schools and Families also confirmed that nine more local authorities would get their 2010-11 Primary Capital Funding originally earmarked in the Schools Capital Settlement in 2007.

Fifty local authorities overall now have confirmed funding for their primary programme for the next two years – and department continues to work with a further 83 local authorities with confirmed funding only for 2009-10 and 15 who need to do more work before funding is confirmed for both 2009-10 and 2010-11.

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