main content Bromley schools missing out on £34 million

Capital investment in Bromley Schools is being held back by the Government’s rules on funding. Only a fraction of the Government’s announced totals for capital investment in schools will be available.

Speaking to Council, Cabinet Executive Member for Children and Young People’s Services, Cllr Ernest Noad detailed the problem

“There has been a long-standing issue of the Authority being unable to access stated levels of Government funding to deal with school building issues. Going back as far as 2002 the Authority expressed concerns to Government ministers that funding was being provided in the form of credit approvals which were of no direct financial benefit to a financially prudent, debt free authority.”

Since changes to Government funding rules in 2004 the position has worsened. These changes together with the Council’s position as a ‘grant floor’ authority have combined to mean that the Council does not receive the revenue support to meet the cost of borrowing that is indicated in Government spending announcements.

Over the last three years, the scale of difficulties faced by secondary schools as a result of a lack of major investment has increased. An exercise undertaken with schools indicates that schemes with an approximate value of £20 million are needed to address the capital needs identified.

The Children and Young People Portfolio Holder wrote to the then Chancellor of the Exchequer, Gordon Brown setting out the Council’s concerns. This followed up an earlier letter from the Leader of the Council to the Minister of Local Government and Social Cohesion, Phil Woolas MP, in which the whole problem relating to grant to the Council was set out. The response did not address the problem directly but suggested that the ‘grant floor’ provision seeks to protect Bromley from greater grant reductions than would otherwise be the case and should therefore be seen as a benefit rather than a handicap.

Following the change of Prime Minister and Chancellor of the Exchequer, the Children and Young People Portfolio Holder wrote to the new Chancellor. This was followed up with a further letter. Neither has elicited a response.

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The Council has sought to manage this difficult situation imaginatively by utilising funding that would otherwise be directly available to schools. In 2007-08 a total of £4.8 million has been used either directly or as a source of borrowing to maintain a programme of major maintenance in school buildings and to progress major schemes to create a new special school and to reconfigure an existing special school. However, the Authority’s ability to raise funding via this means is limited and in any event is utilising funding that would otherwise be available to address other key school priorities. The fundamental issue remains, to address needs with an estimated value of £20 million across the secondary school estate.

The recent announcement by the Secretary of State for Children Schools and Families contains a 3-year allocation to Bromley of £55.2 million. Of this, £12.2 million remains in the ‘trap’ of supported borrowing and although the Authority in this spending round will have a further £9.2 million to address priorities there remains a significant shortfall between the announced allocation and funding available to Bromley.

ENDS

Councillor Ernest Noad is available for interview

Notes to editors: 

• Bromley is only able to access a fraction of the announced totals due to the ‘grant floor’ rules. In the period 2004-2007, Bromley was allocated £56.6 million. Of this £22.7 million came in the form of grant which £17.1 million went direct to schools in the form of Devolved Formula Capital or Voluntary Aided Schools’ Grant. 
• Only £5.5 million was available over a three year period for the Authority to deal with its major strategic investment in schools
• The remaining £34 million should have been available in the form of revenue support to borrow but, because of ‘grant floor’ status, there was no revenue stream to support this. 
• The Council has made strong representation to Government on this issue, the key aspects of which are 
• 2006 – Bromley raised concerns over the difference between the Government’s capital announcements and the actual funding received 
• January 2007 – Bromley’s Director of Children and Young people Services (CYP) wrote to the DfES setting out a strong case for the need for capital investment in Bromley schools to address the increasing building constraints 
• March 2007 – Cllr Ernest Noad met with senior officials from the DfES to discuss Bromley’s case 
• May 2007 – Bromley’s Director of CYP and Director of Resources met with senior officials from both the DfES and HM Treasury 
• 11 June 07 – Cllr Noad wrote to the former Chancellor of the Exchequer, Gordon Brown 
• June 2007 – Leader of Bromley Council made representation to the Minister of Local Government and Social Cohesion. 
• 6 August 2007 - Cllr Noad wrote to the new Chancellor of the Exchequer. 
• 18 September – Follow up letter to the Chancellor of the Exchequer 
  
  For media enquiries, please contact John Skillicorn-Aston, Communications Officer, on 020 8313 4310, or email john.skillicorn-aston@bromley.gov.uk