Learning Estate Improvement Programme (LEIP) - Phase Three- Project Bid to Scottish Government
North Lanarkshire Council · 29 September 2022
Back to Policy and Strategy Committee — 29 September 2022 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
Page 1
North Lanarkshire Council Report Policy and Strategy Committee Does this report require to be approved? ☒ Yes ☐ No Ref Date 29/09/22 Learning Estate Improvement Programme (LEIP) – Phase Three: Project Bid to Scottish Government From James McKinstry E-mail McKinstryJ@northlan.gov.uk Telephone 07939 281102 Executive Summary The council has the opportunity to bid for Scottish Government Funding linked to the Learning Estate Strategy (i.e., new school build programme) via the Learning Estate Improvement Programme (LEIP). As with previous rounds of funding, Scottish Government require councils to demonstrate that they have both financial and political approval for a project(s) as part of the bid process. A committee decision, via Education and Families Committee in February 2021, was to prioritise Wishaw Town Hub within any future bids to the LEIP programme. The funding for Wishaw Town Hub was always predicated on external funding being received (and could have been levered if funding was provided in phase two) along with the ability of the council to secure match funding. The financial position has changed in the last few years. Given the current pressure on the council’s financial resources, the council does not currently have funding allocated for this project at this time and therefore would require commitment to make funding available if Wishaw was approved for external funding. It is clear, through external pressures known to all (hyperinflation, increase cost in materials, increased costs for energy, etc.) that there is pressure on both capital and revenue budgets – as such the council may wish to concentrate on only bidding for projects which already have capital funds available through the hub programme – easing pressure on the overall programme budget. Two options are available to the council, outlined below and within the main body of this report: Option 1. Bid for Wishaw Town Hub as per the committee decision, recognising the burden on capital and revenue budget planning. Additionally bid for Chryston High extension, and Gartcosh Community hub – potentially maximising external funding to the council. Option 2. Bid for Chryston High extension and Gartcosh Community hub only. Option Two is recommended as it does not place any further pressure on the anticipated revenue savings required, whilst easing pressure on the capital programme.
Page 2
1. Background 1.1 In November 2018, the Scottish Government set out its plans to invest a further £1bn in the school estate. The key objectives of this investment are to: support the delivery of Scotland’s Learning Estate Strategy; improve the condition and suitability of the learning estate; establish links across the learner journey where appropriate; support sustainable estate planning and improved stewardship. 1.2 In September 2019, the Deputy First Minister announced the publication of the new Learning Estate Strategy which was co-produced with local government and other strategic partners. This agreed the collective vision of “a Learning Estate which supports Excellence and Equity for all”. 1.3 At the same time (September 2019), the Deputy First Minister also announced the first phase of projects to form part of the Learning Estate Investment Programme (LEIP). North Lanarkshire submitted a bid to phase one - for Chryston PS and Health Hub (as an already approved NLC project), but did not receive funding in the first phase. Alongside the announcement of the first phase of projects, there was a public commitment to announce the second phase of projects within a year. 1.4 On 15th September 2020, Scottish Government wrote to all local authorities requesting project bids for phase two of the LEIP funding announcements. Within the prioritisation matrix linked to the Town and Community Hub programme, approved at Policy and Strategy Committee on 19th March 2020, it was recognised that the council should lever external funding to support projects where possible. 1.5 On 13th October 2020, North Lanarkshire Council submitted a bid for phase two – for a Town Hub within Wishaw. The council received a letter on Friday 18th December 2020 via email to advise that the project would not receive funding as part of the Phase Two of this national funding framework. Recommendations Policy and Strategy Committee is requested to consider the two options presented and: 1. Approve the recommendation that Option Two is progressed – namely that Chryston High Extension, and the new build Gartcosh Community Hub are submitted to Scottish Government as North Lanarkshire Council’s bid for LEIP Phase Three. 2. Approve that by doing so, the council is evidencing that both political and financial approval is provided for the assurance required by LEIP criteria to support the associated bid. The Plan for North Lanarkshire Priority All priorities Ambition statement All ambition statements
Page 3
1.6 Subsequently, the Education & Families Committee on 23rd February 2021, decided that the plans for Wishaw Town Hub be reviewed and resubmitted at the earliest opportunity. LEIP Phase Three is the earliest opportunity. 2. Report 2.1 On 1st July 2022, local authorities received details linked to LEIP Phase Three. Bids are to be submitted to Scottish Government by 31st October 2022. 2.2 North Lanarkshire Council have not received any funding as part of LEIP Phase One, or Phase Two and are at a funding disadvantage in this regard. Therefore, North Lanarkshire are proposing a sizable bid to LEIP Phase Three to request funding for multiple projects. Rationale for bids 2.3 Whilst it is advantageous to receive external funding for projects, it must be recognised that there is significant impact on council finances. Funding from this programme will only ever provide up to 50% of total project costs - for educational elements of the projects only - and in many cases the external funding received will not meet 50% of costs. As such, whilst external funding is welcome - if the match funding is not available through the council’s capital plan, this external funding could place a burden on the council’s financial resources. 2.4 As outlined in section 1.6 above, the decision made at Education and Families Committee in February 2021, was to ensure Wishaw Town Hub was prioritised for future LEIP funding. It is estimated, as at this time, that this project will cost in the region of £150million, with approximately £100 million of this being learning estate elements. As such, based on the funding formula, this would amount to a maximum contribution from Scottish Government of £40-50million, requiring NLC to fund at least £100million. Note that these figures are indicative only to illustrate the potential funding sums – more detailed estimated costs are being prepared ahead of the bid being submitted. 2.5 Currently, there is no funding allocated to the Wishaw Town Hub project within the current five-year capital plan. Funding for the Wishaw Town Hub bid in phase two was to be found if the bid was successful. 2.6 Given the previous instruction via Education and Families Committee, should the council remain true to this instruction (and keep Wishaw as the priority project for any future bid), the council would require to provide additional capital funding through borrowing (for match funding element), thus creating an additional revenue burden of around £4.866m annually. 2.7 Alternatively, it is argued that the council could bid for projects that are contained within the current five-year plan, and which require to be taken forward to meet demand. These projects are referred to as “capacity” related projects – projects which are intended to increase capacity at specific schools to match current or future demand. These projects must be progressed as the pupils will present whether the additional spaces are provided or not – to not provide the spaces would place significant pressure on the service delivery of education at the specific establishments.
Page 4
LEIP Bid - Potential Projects Wishaw Town Hub – New Build 2.8 This project would be covered under the ‘condition’ criteria for LEIP and would request funding for both a high school (replacement for St Aidan’s High School, Wishaw), and a primary school (replacement for St Thomas’ Primary School, Wishaw). This project is anticipated to cost in the region of £150m (including the high school, primary, early years, and sports centre provision) with potential external funding of around £40-50m. Chryston High School – Extension 2.9 LEIP includes allocations for extensions as well as new builds – where the increase is required due to population growth. Chryston High requires an extension to mitigate the impact of housing growth in the Northern Corridor area. An indicative cost of £36million would lever in potential external funding of up to £10m. Gartcosh Community Hub – New Build (funding for Growth element only) 2.10 As with Chryston High, the Gartcosh Community Hub is growth related, and meets the requirements from a growth perspective. As a capacity related project, any external funding would help mitigate the pressure on the overall hub programme budget. It is anticipated that around £9m could be received in external funding for this project. LEIP Bid – Option One 2.11 Approving option one, the council would bid for three projects in the following priority order: Wishaw Town Hub, as per the Education and Families committee decision in February 2021; Chryston High extension; and Gartcosh Community hub (growth element). 2.12 Wishaw Town Hub would be put forward as priority number one as it is the project that can lever in the most amount of external funding. This project is also priority number one based on a previous decision of Education and Families Committee in February 2021. It does, however, require additional capital funding into the programme to progress this project. 2.13 Chryston High extension would be put forward as priority number two as this project is anticipated to lever in more funding than Gartcosh but less than Wishaw. This project must be delivered to deal with future capacity issues at Chryston High school. There is funding for this project within the current hub programme budget. 2.14 Gartcosh Community Hub would be put forward as priority number three. This project would be subject to a ‘growth’ bid. A growth bid provides funding for the additional pupils (i.e. the growth in spaces). Gartcosh Primary school currently has 188 permanent spaces and the primary school element within the Community Hub is expected to hold 434 pupils. Therefore, this bid would potentially secure funding for 246 (434-188) of the primary school element (or 56% of the school cost) with Scottish Government providing up to 50% of the 56%. For example: if the school element was to cost £20m, the growth element would be 56% of £20m = £11.2m with Scottish Government providing funding for up to 50% of the £11.2m. Therefore, whilst external funding is welcome – in this example it would provide a maximum of £5.6m against a £20m cost – resulting in a 28% contribution from Scottish Government. Note that there may also be an opportunity to bid for ASN
Page 5
and Early Years spaces as part of this project – the 28% allocation is provided above for illustration only to demonstrate that the council will always be in a position where 50% or more of the funding must be provided by the council through capital. There is funding for this project within the current hub programme budget. LEIP Bid – Option Two 2.15 Approving option two, the council would not bid for Wishaw Town Hub and would elevate Chryston High extension to priority number one, and Gartcosh Community Hub to priority number two. 2.16 This option is put forward for consideration due to the current and anticipated strain on both the capital and revenue budgets within the council. As Wishaw Town Hub does not currently have match funding allocated – the council would require borrowing additional funding to facilitate delivery of the Wishaw Town Hub. This will place further pressure on both existing capital and as a result recurring revenue. 2.17 Option two recognises that capacity at both St Aidan’s High and St Thomas’s Primary can be managed through alternative action – new build is not required to deal with capacity. Due to capacity pressures in the Northern Corridor, both Chryston High and Gartcosh Primary require new builds to meet future demand. 2.18 This option would require Policy and Strategy Committee to review the previous decision of Education and Families Committee, recognising that the global financial market has changed significantly since the LEIP phase two bid was submitted and rejected in 2020/21. Bid priority order 2.19 The prioritisation order of the bid to the LEIP programme has been structured to ensure alignment with previous council decisions within Option One. Option Two is presented to recognise the changes in the global and local financial conditions and is considered the best approach to both levering external funding and easing pressure on the current five-year capital plan. Finance 2.20 Due to the increased costs being experienced both globally and locally, there is pressure on the current Town and Community Hub Programme and associated budget. A report will be provided to the appropriate committee on the action required to manage this budget – once costs for the associated projects within the programme are known. It is recognised that the funding of Wishaw Town Hub will place further pressure on this and the wider capital programme budget. 2.21 If Option One is chosen and the Wishaw Town Hub is prioritised and receives external funding, the Council could agree to finance this through additional revenue funded borrowing. It is anticipated that for around £100m to funding the council portion of Wishaw Town Hub a recurring revenue funding source of £4.866m would be required. 2.22 It should be noted that the Council already has an anticipated revenue budget gap of around £75m from 2023/24 to 2025/26. Any additional borrowing would add to that revenue budget gap. This approach would require approval at Policy and Strategy
Page 6
Committee and the identification of additional savings to bridge the increased revenue budget gap. 2.23 Should Option Two be chosen, this is not anticipated to require any additional revenue funding and as a result should not impact on or increase the anticipated revenue budget gap. 3. Measures of success 3.1 Demonstration of both political and financial support for the bid to be submitted to LEIP Phase Three. 3.2 Clear council instruction on what the bid should contain. Submission of bid for agreed projects to Scottish Government ahead of the deadline of 31st October 2022. 4. Supporting documentation James McKinstry Head of Asset and Procurement Solutions
Page 7
5. Impacts ( http://connect/report-template-guidance ) 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality-and-fairer- scotland-duty-impact-assessments Yes ☐ No ☒ 5.2 Financial impact Does the report contain any financial impacts? Yes ☒ No ☐ If Yes, have all relevant financial impacts have been discussed and agreed with Financial Solutions? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? The financial implications are outlined throughout the report. Depending on the preferred option agreed through the Policy and Strategy Committee, the impact will have to be incorporated into future planning from the Strategic Capital Delivery Group and / or the Council’s overall budget strategy for 2023/24 to 2025/26. 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts have been discussed and agreed with People and Organisational Development? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ If Yes, have all relevant legal impacts have been discussed and agreed with Legal and Democratic Solutions? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☒ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☒
Page 8
5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Where the impact identifies a requirement for technology, has an assessment been carried out (or scheduled) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☒ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☐ No ☒ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed?