The Corporate Director – Education and Family Support and the Interim Head of Finance and Section 151 Officer submitted a joint report, that updated Council with regards to the Welsh Government (WG) change in the Mutual Investment Model (MIM) intervention rate for Band B; sought Council endorsement of the revised financial commitment required for the delivery of Band B of the School Modernisation Programme, and finally, to approve a change to the Capital Programme to reflect the updated commitment.

The Interim Head of Finance and Section 151 Officer confirmed that in 2010, Cabinet approved the recommended schemes included in each of the four bands of the School Modernisation Programme (A-D) which were subsequently detailed in Bridgend’s 21st Century Schools Strategic Outline Programme (SOP). The SOP was submitted to WG in 2011 and ministerial ‘approval in principle’ was received, subject to the completion of the WG business case process. 

A strategic review into the development and rationalisation of the curriculum and estate provision of primary, secondary and post-16 education undertaken in 2016 identified that there are revised Band B priorities from those identified within the 2010 SOP.

An updated SOP, which reflects the revised priorities, was submitted to WG in July 2017. Cabinet subsequently approved to discontinue the original Band B schemes identified in November 2010 and approved the revised list.

Paragraph 3.6 then outlined details of the schemes in question.

In December 2017, WG ‘approval in principle’ was received for Bridgend’s second wave of investment, which at this stage has an estimated programme envelope cost of £68.2m. 

In January 2018, Council approved in principle the financial commitment required for Band B of the School Modernisation Programme, subject to sufficient resources being identified and allocated to meet the match funding commitment.

The Interim Head of Finance and Section 151 Officer proceeded, by advising that in 2018 WG revised the approach to procuring MIM. A single Private Sector Delivery Partner (PSDP) would be procured to become the majority shareholder in a Welsh Education Partnership (WEP), with local authorities (LAs) and further education institutions (FEIs) together the participants; WG would hold the remaining shares. The WEP would be capable of delivering capital schemes, with the exception of Band B projects. WG’s review of MIM identified that special schools were now considered unsuitable for delivery under that funding arrangement.

In November 2018 Cabinet reconsidered the funding options for the programme determining that, having compared the likely cost to the local authority over a 30-year period, delivering Band B via a combined capital and MIM route would make best use of Council’s financial resources.

She added that, after the November Cabinet decision and prior to Council’s meeting, WG announced that they had reviewed their capital grant intervention rate, increasing the rate from 50% to 75% for special school and pupil referral unit schemes, and from 50% to 65% for all other schemes; WG advised that the MIM intervention rate would remain set at 75%.

In December 2018 Cabinet abandoned the decision made in November (as detailed in 3.11 of this report), and gave approval to pursue an option whereby all schools within Band B would be funded via capital grant, subject to sufficient resources being identified and allocated to meet the match-funding commitment. Council approval to amend the capital programme was subsequently received. 

On 7 February 2019, WG advised that the Ministers of Education and Finance had made a change to the intervention rate for Band B MIM schemes. The revised MIM funding model will benefit from a 6% increase on the WG grant intervention rate ie from 75% to 81%.

The Interim Head of Finance and Section 151 Officer stated that in progressing Band B MIM, there was a requirement for WG to formalise the procurement of the PSDP and consequently, WG have asked LA’s to confirm their commitment to Band B MIM by 31 March 2019.

The contract notice (which will be published via the Official Journal of the European Union), must stipulate the names of the LAs/FEIs that will be able to access partnering services. WG has indicated that beyond Band B it may be possible to deliver capital schemes (ie design and build projects) via the WEP.

WG has advised that they will fund the public sector share of working capital in the WEP and therefore they have indicated that they do not anticipate that there will be any cost or risk associated with being named in the contract notice or signing up to the SPA.

The Interim Head of Finance and Section 151 Officer added that notwithstanding the above, it was necessary for the Authority to be completely satisfied with WGs draft legal documentation in this regard. WG have been asked for sight of the documentation so that it can be reviewed, considered and approved from this Authority’s perspective, prior to entering into such a commitment.

She then concluded her submission by referring Members to the report’s financial implications, concluding that of the 4 funding Options shown in paragraph 8.1 (of the report), that Council considers pursuing Option 3 for the reasons detailed in the report.

Members then asked a number of questions and these were suitably responded to by Officers.

The Leader then concluded debate on this item, by advising that Council and Cabinet had a separate role to play when considering schemes that fall within the Capital Programme. Council’s role was to approve funding for capital programme commitments, whilst Cabinet considered and approved the various schemes per se.

RESOLVED:                    (1)   That Council gave approval in principle for the revised financial commitment for Option 3, as approved by Cabinet, required for Band B of the School Modernisation Programme. The approval would be subject to sufficient resources being identified and allocated to meet the match funding commitment.

                                       (2)   That Council further gave approval for the revised budget required in respect of Band B of the School Modernisation Programme to be incorporated into the capital programme.