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Circular 01/06 For Information Capital Capital Project Grant Support Transitional and Interim Arrangements 2001/02 Summary This circular confirms the arrangements for colleges applying to the Learning and Skills Council (the Council) for capital grant support in 2001/02. It includes: proposed arrangements for the receipt, assessment and determination of colleges’ applications, changes to the criteria against which such applications will be considered in response to the statement ‘Colleges for Excellence and Innovation’ by the Secretary of State for Education and Employment and proposals for consultation on capital policy arrangements from 2002/03 onwards. It also confirms how the Council will deal with detailed applications from colleges for projects that have already been determined on an in-principle basis by the Further Education Funding Council (FEFC). It also summarises previous announcements on Information Learning Technology (ILT) funding direct to FE colleges in 2001/02 Supplement Revised application and claims forms and explanatory notes
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Capital project grant support transitional and interim ... · group on 1 February 2001 and at the FEFC Council meeting on 14 February 2001.New applications received prior to 31 March

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Page 1: Capital project grant support transitional and interim ... · group on 1 February 2001 and at the FEFC Council meeting on 14 February 2001.New applications received prior to 31 March

Circular 01/06For Information

CapitalCapital Project Grant Support Transitional and Interim Arrangements 2001/02

SummaryThis circular confirms the arrangements for colleges applying tothe Learning and Skills Council (the Council) for capital grantsupport in 2001/02. It includes: proposed arrangements for thereceipt, assessment and determination of colleges’ applications,changes to the criteria against which such applications will beconsidered in response to the statement ‘Colleges for Excellenceand Innovation’ by the Secretary of State for Education andEmployment and proposals for consultation on capital policyarrangements from 2002/03 onwards. It also confirms how theCouncil will deal with detailed applications from colleges forprojects that have already been determined on an in-principlebasis by the Further Education Funding Council (FEFC). It alsosummarises previous announcements on Information LearningTechnology (ILT) funding direct to FE colleges in 2001/02

SupplementRevised application and claims forms

and explanatory notes

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Paragraph numbers

Summary

Transitional Arrangements 6

LSC Capital Arrangements 8

Colleges for Excellence and Innovation 15

Accommodation Strategies 22

Community and Adult Learning Institutions 25

AnnexesAnnex Capital projects criteria

Supplement Revised application and claims forms and explanatory notes

Contents

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Contents

ii

Further informationFor further information, please contact the appropriate Learning and Skills Council local office,or write to:

The Learning and Skills CouncilCheylesmore HouseQuinton RoadCoventry CV1 2WT

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iii

This circular confirms the arrangements forcolleges applying to the Learning and SkillsCouncil (the Council) for capital grant supportin 2001/02. It includes: proposed arrangementsfor the receipt, assessment and determinationof colleges’ applications, changes to the criteriaagainst which such applications will beconsidered in response to the statement‘Colleges for Excellence and Innovation’ by theSecretary of State for Education andEmployment and proposals for consultation oncapital policy arrangements from 2002/03onwards. It also confirms how the Council willdeal with detailed applications from collegesfor projects that have already been determinedon an in-principle basis by the FurtherEducation Funding Council (FEFC). It alsosummarises previous announcements onInformation Learning Technology (ILT) fundingdirect to FE colleges in 2001/02.

Summary

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Introduction 1 This circular confirms interimarrangements for the administration,assessment and determination of applicationsfor consent and capital project support. It alsosummarises those funds that will flow direct tocolleges for ILT expenditure.

Background 2 The previous arrangements for thereceipt, assessment and determination ofcolleges’ applications for capital project grantsupport were agreed by the FEFC in March1999 and confirmed in FEFC circular 99/26 –Capital Project Support Arrangements 1999/02.From 1999/2000 onwards colleges withqualifying projects could apply for a grant ofup to 35% of eligible project costs payableover a three-year period. Colleges could alsoapply for grants to assist with the costs ofimproving access and facilities for studentswith learning difficulties and disabilities andtowards the costs of employing consultants toassist with preparing feasibility studies for largerationalisation and Public Private Partnership(PPP) project proposals.

3 The Council is now responsible for theadministration of the FE capital programmeincluding the determination of newapplications, both on an in-principle anddetailed basis, and for the continuation ofgrant payments to projects previouslyapproved by the FEFC.

4 For 2001/02 transitional arrangementswill operate as set out in this circular pendingconsultation later this year on changes to thecurrent arrangements to reflect, for example,the priorities announced by the Secretary ofState for Education and Skills in his statement‘‘Colleges for Excellence and Innovation’.

5 The ILT funding arrangements for2001-02 were published in FEFC circular 99/45- ILT Implementation Plan.

Transitional Arrangements

Applications to FEFC for capitalproject grant support forprojects estimated to cost £1 million or more6 The FEFC had previously announcedthe arrangements for dealing with capitalapplications for the period to 31 March 2001.The final round of applications to the FEFC wasdetermined under the then chief executive’sdelegated authority at the capital programmegroup on 1 February 2001 and at the FEFCCouncil meeting on 14 February 2001. Newapplications received prior to 31 March 2001,addressed to the FEFC, were passed to theCouncil for the completion of the assessmentprocess and determination.

Capital Project Grant SupportTransitional and InterimArrangements 2001/02

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Capital Project Grant Support Transitional and Interim Arrangements 2001/02

Applications to FEFC for projectsestimated to cost less than £1million, disability access grantsand fee support for feasibilitystudies 7 Colleges were advised that they couldcontinue to submit applications in thesecategories to the FEFC to be determined underthe then current arrangements until 31 January2001. As for capital project grant support, newapplications received prior to 31 March 2001were passed to the Council for the completionof the assessment process and determination.

LSC Capital Arrangements

First year arrangements – capitalproject grant support 8 For the year commencing 1 April 2001the Council has adopted most of the capitalproject grant support criteria and procedurespreviously operated by the FEFC. These have,however, been modified to reflect the new andadditional priorities announced by theSecretary of State in the statement ‘Collegesfor Excellence and Innovation’ to which it isexpected capital funds will increasingly bedirected over the next two years (seeparagraphs 15 to 17 below).

9 The arrangements set out in the FEFCcircular 99/26 Capital Project SupportArrangements 1999-01 will continue to apply,therefore, subject to the following additionsand amendments:

a. from 1 April 2001 all applications forcapital project grant support, disabilityaccess grants and feasibility study fundingshould be made to the local Learning andSkills Council (local Council) withresponsibility for the college making theapplication. The local Council shouldreceive two copies of each application and

a third copy should be sent to theCouncil’s national Property Services teamin Coventry marked for the attention ofthe Area Property Adviser who in mostcases will be the previous FEFC RegionalProperty Adviser. The revised capitalprojects application forms (Form A) andother application and claims forms will befound in the supplement to this circular;

b. applications previously determined on anin-principle basis by the FEFC will beconsidered against and determined underthe previous FEFC capital projectsarrangements and, in particular, thecriteria as set out at annex C to FEFCcircular 99/26 but should be received bythe Council by 30 December 2001 ifprevious budget allocations are to be takeninto account. Such applications receivedafter this date will be considered as newproposals and the LSC cannot guaranteeany priority for such applications andprevious provisional capital budgetallocations towards these costs;

c. applications will continue to be consideredin 2001/02 against similar capital projectscriteria to those used by the FEFC circular99/26. The Council has, however,introduced some changes and additions,indicated in italics at annex A to thiscircular, which address the followingpoints:

• reinforcing the requirement forcolleges to have properly consulted allappropriate and interested partiesincluding other adult and 16-19learning providers;

• ensuring that new applicationsconsider and address, as appropriate,the priorities identified in thestatement ‘Colleges for Excellence andInnovation’.

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Capital Project Grant Support Transitional and Interim Arrangements 2001/02

Note: The Council will give priority towardsapplications that clearly address these priorities(see paragraphs 15–17 below).

d. stage three criteria relating to costs andvalue for money and floorspace criteriawill continue to be applied. For 2001/02FEFC ISR data will be used for thepurposes of calculating floorspaceutilisation factors. A new floorspacemethodology will be developed in2001/02 using data collected by theCouncil;

e. for all new applications including thosefollowing previous in-principledeterminations the grant of 35% ofeligible project costs will usually beregarded as a maximum. Exceptionallyadditional grant may be available, ifjustified on affordability grounds, forprojects addressing the rationalisation ofpremises for 16-19 provision and, inparticular, the recommendations of areainspections and area reviews. Applicationsfor any particular level of grant supportwill need to be justified on affordabilitygrounds and a smaller grant may beoffered by the LSC if it considers this to beappropriate;

f. applications for capital grant support willbe determined under the schedule ofdelegations set out below that wereagreed by the Council at its meeting on 1March 2001. All applications will requirethe endorsement of the local Council;

g. regardless of the estimated costs ofproject proposals, fully completedapplications (in a form previouslydiscussed and agreed with the AreaProperty Adviser and other members ofthe local Council’s assessment team) willneed to be received in good time. Forproperty related consents not involvinggrant support, this should be no later thanfour weeks before the consent is required.Applications requesting grant support shouldbe received two calendar months prior tothe appropriate Council cycle. For 2001/02the appropriate dates are as follows:

h. the Council may consider applications forprojects costing less than £2.5 million tobe approved by the Chief Executive underdelegated authority at other times. Suchapplications should still be received atleast two months prior to a decision beingrequired;

i. colleges should continue until advisedotherwise to submit claims for grantpayment to the Council’s NationalProperty Services team in Coventry inaccordance with the arrangements set outin FEFC circular 99/26 and using theclaims form B in the attached supplementto this circular.

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Applications to be Council decisionreceived by likely during

Project cost Delegated authority

Chief executive Capital Committee Council

Up to £2.5 million ✔

Up to £10 million ✔

Above £10 million ✔

Consents only ✔

1 July 2001 September 2001

1 September 2001 November 2001

2 January 2002 March 2002

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Capital Project Grant Support Transitional and Interim Arrangements 2001/02

First year arrangements –disability access grants and feesupport for feasibility studies 10 The Council will continue to acceptapplications for disability access grants to amaximum of £50,000 on a matchedexpenditure basis against the criteria set out inFEFC circular 99/26. Colleges wishing toundertake such works during the yearcommencing April 1 2001 should apply to theLSC using form D in the attached supplementto this circular by no later than 30 September2001. Further applications may be invited laterin the year depending on the availability offunds.

11 Colleges likely to seek financial supporttowards the costs of carrying out feasibilitystudies for major rationalisation and PPP/PFIproject proposals during 2001/02 shouldinform the Council’s Area Property Adviser assoon as possible. Applications for feasibilitystudies to be carried out in 2001/02 should bemade to the Council’s Infrastructure andProperty Services team in Coventry using formC in the attached supplement to this circularby 30 September 2001. A copy should also goto the local Council at the same time. Funds willbe available to a maximum of £100,000 on amatched expenditure basis.

First year arrangements for othercapital consents and approvals 12 Applications for property relatedconsents not involving requests for capitalgrant support should be made to the appropriatelocal Council using the application form A inthe attached supplement to this circular. As forapplications for capital grant support, twocopies of the application should be sent to thelocal Council and one copy to the Council’snational Property Services team in Coventry.

13 Colleges are reminded of therequirement to seek the consent of the Councilunder paragraphs 24 and 25 of the Council’s

financial memorandum with colleges (see FEFCcircular 99/48 and subject to the issue of arevised financial memorandum later this year)for any land or buildings transactions with agross cost (including fees, related ancillaryexpenditure and VAT) of more than 5% of thecollege’s annual turnover or £1 million,whichever is the lower.

ILT expenditure 2001 to 2002 14 The proposed expenditure for ILTfunding in 2001/02 has been previouslypublished. In summary, the total funds to bepaid direct to colleges are:

a. £2 million for the development of learningmaterials at a college level;

b. £3.7 million for Managed LearningEnvironments software licences;

c. £16.2 million for IT equipment and LocalArea Network infrastructure.

Colleges will not need to apply for these funds.The amount received under each category willreflect college size. £3 million has beenreserved to fund the PCs for FE Teachersinitiative. Details of this scheme, includingeligibility, will be published at a later date.

'Colleges for Excellence andInnovation'

Secretary of State’s statement 15 The Secretary of State in the statementColleges for Excellence and Innovation hasconfirmed that central to the vision of thefuture of further education is themodernisation of the role colleges will play.

16 Capital resources are being madeavailable in the period 2001/04 towardsmeeting existing and new commitments of£110 million in each of 2001/02 and 2002/03including:

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Capital Project Grant Support Transitional and Interim Arrangements 2001/02

a. £15 million per year for capitalexpenditure to support local action arisingout of area inspections of provision for 16-19 year olds as indicated in theSecretary of State’s statement; and otherrestructuring of 16-19 provision;

b. £10 million in 2001-02, £20 million for2002/03 and £30 million in 2003/04 willbe made available towards the capitalcosts of colleges establishing centres ofvocational excellence;

c. £15 million in 2002/03 to support projectsto improve access and facilities to studentswith learning difficulties and disabilities.

17 The Council will meet previous FEFCcapital grant payment commitments. In allfuture new capital applications to the Council,colleges are asked to confirm the extent towhich their applications arise from or addressthe priorities in paragraph 9 above. In theevent that capital funds may be oversubscribed, applications materially arising fromor addressing these priorities may be givenpreference.

Changes to capital projectscriteria for 2001/02 18 For 2001/02 Council will continue toconsider capital applications against theprojects criteria set out at annex C to FEFCcircular 99/26. These will be subject, however,to the following amendments that reflect: theestablishment of the Council; the Secretary ofState’s statement Colleges for Excellence andInnovation; and the Council’s statutoryrequirements to ensure ‘proper and reasonablefacilities’ for further education and work basedtraining.

19 Revised capital projects criteria forprojects due to be determined in 2001/02 areincluded at annex A. The main changes aresummarised as follows. Colleges will now also

need to demonstrate in the context of theirstrategic plans:

a. how and to what extent the projectproposal reflects the new priorities forchanges in local provision for 16-19 yearold learners, collaboration with other localproviders and, where appropriate, theoutcomes of area inspections and reviews;

b. how and to what extent the projectproposal will establish or further developcentres of excellence and specialisationwithin the college and/or in collaborationwith other local providers;

c. that the college has consulted fully on itsproposals with local learning partnershipsand with other providers.

20 Colleges are reminded of the request toprovide a post project review to the Councilwithin 12 months of the practical completionof the project. A revised form of return isprovided at form E in the attached supplementto this circular.

Consultation on arrangementsfor 2002/03 onwards 21 The Council will formally consult withFE sector colleges and other interested partiesduring autumn 2001 on further changes to theapplication process and projects criteria as setout in FEFC circular 99/26 and in this circular.This will reflect recently announcedgovernment priorities including thosecontained in: the Council’s remit letter; thestatement Colleges for Excellence andInnovation; and other matters such as revisedcost and space utilisation factors. Followingconsultation, new arrangements for 2002/03onwards will be announced in winter 2001.

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Capital Project Grant Support Transitional and Interim Arrangements 2001/02

Accommodation Strategies 22 Under the financial memorandum thatindividual colleges have with the Council theyare expected to keep their premises underperiodic review. The usual three-year rollingrequirement that would have meant collegesproducing fully revised accommodationstrategies by the end of 2000 was deferredpending the confirmation of strategic planningrequirements. It can now be confirmed thatcolleges should provide fully revised andupdated accommodation strategies to theCouncil at the same time as the revisedstrategic plan submissions due in July 2002.Colleges will be invited to share emergingaccommodation strategies in substantive draftform with local Councils in December 2001.The Council will publish updated advice andrequirements for the preparation ofaccommodation strategies in autumn 2001.This will update and revise the advicepreviously published in the FEFC circular 97/19Guidance on Accommodation Strategies andwhich can be found on the Council’s website.

Centres for vocational excellence 23 Further details of the Centres ofVocational Excellence initiative have beenannounced. This was first revealed in theSecretary of State’s statement Colleges forInnovation and Excellence to the AoCconference, in November 2000 (see paragraphs15-17 above). The first stage in implementingthe initiative was a consultation documentsent jointly by the Council and the DfES tocolleges; employers; National TrainingOrganisations; Group Training Associations;other private training providers; and otherinterested parties setting out a framework forCentres of Vocational Excellence; how collegesmight establish them and build on existinggood practice; and the contribution centrescould make in taking colleges to the forefront

of skill development in new and traditionalsectors. Concurrently a pilot programme hasbeen established whereby 16 colleges alreadyoperating to high standards of quality andinnovation in vocational education have beenselected as pathfinders. This exercise will firstly,help determine the criteria and approach theCouncil should adopt to help establish suchcentres across the sector and, secondly,promote the dissemination of good practice toaspiring colleges.

24 Support from local Councils was a keyqualifying criteria to the selection ofpathfinders and in due course for all areas ofvocational excellence. A prospectus has beenissued and application details will be publishedin September 2001 inviting colleges to applyfor capital and recurrent funding to help themachieve and maintain ‘Centres of VocationalExcellence’ in key vocational curriculum areas.The government's target is that 50% of collegesshould be operating at least one such centreby 2003-04 and it has earmarked £100 millionof capital and recurrent funding over the nextthree years to help achieve this aim. Furtherdetails of this initiative can be found on theCouncil’s and the DfES's websites.

Adult and CommunityLearning Institutions 25 Ministers announced on 30 January thisyear that the Council would be inaugurating anew capital budget for adult and communitylearning from 2002/03. Further advice on thedetailed arrangements relating to this budgetwill be published later this year.

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John Harwood, Chief Executive

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Annex Capital projects criteria

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Annexes

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(Paragraphs with substantive changes from theprevious FEFC criteria are indicated in italics)

Stage 1: Validation Criteria 1 Before making an application to theLearning and Skills Council (the Council) forsupport, each college will apply the followingvalidation criteria to its own proposals.

Consistency with strategic planand accommodation strategy 2 Each college should be able todemonstrate how its proposals assist its overallplan for:

a. accommodating its learners and activities;

b. curriculum areas requiring specialistprovision;

c. the provision of work based learning toemployers (if appropriate);

d. new provision in both new and existingcurriculum areas.

Necessary steps in preparing and reviewing acollege accommodation strategy were set outin the supplement to FEFC circular 97/19,Guidance on Accommodation Strategies.Revised guidance will be issued in autumn 2001.

Confirmation of collegecontribution 3 Given the scarcity of capital funds,each college will be expected to contribute asmuch as it reasonably can to the costs of itsprojects.

4 In 2001/02, the Council’s maximumcontribution towards the costs of a project willusually be no more than 35% of the eligibleproject costs net of any other public sectorgrant contributions, and calculated aspreviously confirmed in the FEFC’s circular99/26, but excluding £50,000 on the first£100,000. Colleges will be expected todemonstrate the need for any particular level ofgrant support in confirming the affordability ofthe project.

5 An appropriate figure should beprovisionally confirmed with the financedirector of the appropriate local Learning andSkills Council before proposals are finalised.Under the stage 3 criteria (see below),preference will be given to colleges applyingfor less than the maximum available Councilsupport. The Council may consider waiving theselimits on affordability grounds where warrantedby exceptional circumstances (see paragraph 9eof circular 01/06). Examples of projectfinancing and the calculation of the Council’scontribution towards project costs are providedin the supplement to this circular.

Financial viability 6 Each college should be able todemonstrate that it is financially viable aftertaking account of its contribution to theproject; has no major weaknesses in itsfinancial systems; and has made satisfactoryarrangements to manage the project.

Annex: Capital Projects Criteria

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Planning requirements 7 Each college should be able todemonstrate that appropriate planningpermission for the proposal will be or has beenobtained.

PFI and PPP 8 Colleges will be required todemonstrate that they have diligentlyexamined whether better value for moneymight be obtained by private sector investmentand participation in the provision andsubsequent management of the assets to becreated and in the delivery of relevant services.

Stage 2: Application to theCouncil9 The kind of factors that an applicant isadvised to consider in developing a capitalproject proposal are illustrated below. Not allthe factors listed will be equally relevant toeach case and there may be other factors thatmay attain significance in certain cases. Inaddition, there may be different outcomes forthe same factor in different projects. TheCouncil will wish to be assured that aparticular outcome is appropriate for theproject in question.

Strategic plan 10 The following factors apply to thecolleges’ strategic plans:

a. that the project is consistent with thecollege strategic plan;

b. that the strategic aims of the project havebeen set out in a measurable form toenable a satisfactory post-projectimplementation review to be conducted;

c. the extent to which the project relates tospecialist provision;

d. whether the student number projectionsfor the college are soundly based;

e. whether the project would help to servethe needs of the college’s normalrecruitment area and, in particular,contribute to securing proper andreasonable provision;

f. whether there is under-utilised space incolleges and other educational institutionsserving the same market and the extent towhich that should be taken into account;

g. whether appropriate collaborative ventureshave been considered and, whereappropriate, whether the development hasbeen considered in terms of the localplanning of provision;

h. where a merger/potential merger is likely,the rationale must include the impact ofthe development on the mergedinstitution;

i. to what extent the project mightjeopardise the financial viability ofneighbouring colleges and othereducational institutions, and the extent towhich these colleges have been consultedabout the project;

j. the project should not engender wastefulcompetition or, for example, an undueduplication of specialist facilities within alocality or a replication of courses resultingin uneconomic learning groups.

Colleges putting forward projects should seekthe endorsement of their local learningpartnerships, local education authorities andother relevant parties to reinforce their evidencethat the project will not promote wastefulcompetition.

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Annex: Capital projects criteria

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Quality 11 The following factors apply to qualityissues:a. whether the existing provision has, at

least, a balance of strengths andweaknesses and that the college hasachieved at least a current inspectiongrade three for both governance andmanagement;

b. how the project might enhance and helpto maintain the quality of the provision.

Property indicators 12 The following factors apply to thecolleges’ property. Colleges should considerwhether:a. the project improves the quality of the

college buildings;

b. the proposed buildings are of anappropriate type;

c. the building design enables access bypeople with physical disabilities and willmeet the requirements of the DisabilityDiscrimination Act 1995 and other relevantlegislation;

d. the building is energy-efficient;

e. the gross/net floor area is appropriate;

f. whether listed buildings are involved andthe implications of this;

g. health and safety issues have beenconsidered and all legal requirements met;

h. there will be continuity of provision forlearners during construction;

i. opportunities are being taken for site andpremises rationalisation and for their morecost-efficient operation.

Economic appraisal 13 The following factors apply to theeconomic appraisal. Colleges should considerwhether:a. the options considered are economically

appropriate;

b. all reasonable options have beenevaluated;

c. the appraisal includes all relevant costsand benefits; only relevant costs andbenefits; and that the cost of land hasbeen included;

d. the project could be broken down intoseveral smaller projects, including at leastone project which has a higher NPV thanthe proposal;

e. the project secures a satisfactory returnfor the UK economy;

f. the college’s contribution to the project issatisfactory, including any windfall gains,for example from sales of property;

g. the planned profile of expenditure hasbeen realistically constructed and takenaccount of the college’s financial forecasts.

Borrowing appraisal 14 The following factors apply to theborrowing appraisal:a. whether the college’s overall borrowing

will exceed the permitted levels set out inthe Council’s financial memorandum withthe college;

b. whether there are onerous conditionsattached to the loan, and whether theinterest rate is reasonable.

Financial health 15 The following factors apply to thecollege’s financial health:

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Annex: Capital projects criteria

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a. whether there appears to be any currentrisk to the financial health of the college;

b. whether the project creates a risk to thefinancial health of the college;

c. whether appropriate risk analysis andsensitivity studies have been conducted.

16 Software has been developed by theCouncil which assists with the calculationsrequired in the economic appraisal, theborrowing appraisal and the appraisal offinancial health. The software is available to allcolleges and may be obtained by contactingtheir local Council or area property adviser.

Stage 3: Selection ofProposals by the Council 17 The Council will consider each proposalwhich has passed the first two stages of theprocess against the seven selection criteriadescribed at paragraphs 18–24 following:

Proper and reasonable facilities 18 The Council will have available, asappropriate, the view of the relevant localCouncils on the contribution each project wouldmake to ensuring that there are proper andreasonable facilities for further education andwork based training in their areas, and in thelight of sixth form and other reorganisationsproposed or any mergers in progress.

19 In particular the Council will considerthe following:

a. to what extent the project proposal reflectsthe new priorities for changes in localprovision for 16-19 year old learners andcollaboration with other local providersand, where appropriate, the outcomes ofarea inspections and reviews;

b. how and to what extent the projectproposal will establish or further developcentres of vocational excellence and

specialisation within the college and/or incollaboration with other local providers;

c. that the college has also consulted fully onits proposals with, for example, the relevantlocal learning partnerships, local educationauthorities and other providers.

Quality assessments 20 The Council will take into accountrelevant FEFC quality assessments and, as theybecome available, those from OFSTED and ALI.The Council would not support a proposalwhere, under FEFC arrangements, the provisionhas been classed on inspection as having moreweaknesses than strengths (grades 4 or 5 onthe FEFC inspection grading scale) unless thecollege were able to show that it hadaddressed satisfactorily the shortcomingsidentified in the relevant area, or that theproject was necessary to improve its provision.Should there be competing proposals in thelocality, the Council would give preference tothe college where the provision had receivedthe highest quality classification, unless therewere overriding reasons not to do so.

Economy 21 The Council will compare the cost perm2 of the net added space of each proposalwith that of similar constructions in the samearea of the country.

Value for money 22 A measure of value for money will becalculated for each proposal by dividing theNPV to the United Kingdom economy of theproposal at the Treasury test discount rate bythe value of the proposed Council contribution.This indicator is specifically recommended bythe Treasury for situations in which decisionsabout rationing capital need to be made. It will

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Annex: Capital projects criteria

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be weighed against the other selection criteriain reaching a decision on any proposal.

Space utilisation 23 The Council will require evidence insupport of a project proposal that the collegeconcerned has fully addressed the efficient useof floorspace and facilities in itsaccommodation strategy. (For further advice,see FEFC Circular 97/37, Guidance onFloorspace Management and annex C to FEFCcircular 99/06.) Further advice will be publishedby the Council later this year.

Health and safety relatedbuilding repairs, DisabilityDiscrimination Act and otherlegal requirements 24 The Council will give preference to:

a. projects with evidence of a significantamount of remaining urgent health-andsafety-related works on buildings to beretained;

b. other legally required works such as thoserequired, for example, under the DisabilityDiscrimination Act 1995;

c. works intended to widen participation bythose attending the college and, inparticular, to improve access and facilitiesfor learners with learning difficultiesand/or disabilities.

Financing 25 The Council will give preference tofirstly PFI or PPP projects and secondly loan-financed projects.

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Annex: Capital projects criteria

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© LSC 2001Published by the Learning and Skills Council. Extracts from thispublication may be reproduced for non-commercial educationalor training purposes on condition that the source isacknowledged and the findings are not misrepresented.

This publication is available in an electronic form on theCouncil’s website: www.lsc.gov.uk

Reference CIRC/0023/01