Education Estates Strategy

Schools Forum

SEND Invest to Save Business Case

21 May 2014

Objectives of SEND Invest to Save

Aims:•To improve outcomes for all children and young people in Essex•To provide more appropriate placements of children and young people with complex and severe needs with associated challenging behaviour and ASD in Essex

Our Objectives:•To reduce the number of students placed in out of county placements for complex and severe needs with associated challenging behaviour and ASD•To stem the growing cost of out of county placements and its impact on school budgets

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The Effects of lack of Provision

•Parents quite rightly win tribunals because they can point to the lack of appropriate ‘in county’ schooling

•Some students are directed to mainstream placements where they fail.

•The financial impact of lack of provision is increasing the Out County placement costs

•The cost of out of county placements has risen by £3m each year from 2009 in 2012, slight reduction last year due to push on better negotiation/ renegotiation of placement costs, but its still £21M pa

Story so far…

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Schools Forum:• December 2012 – The Education Estates Strategy and Principle

of SEND Invest to Save• February 2013 - More on SEND Invest to Save plus pupil place

planning projections• May 2013 – financial model, process and costs• July 2013 – agreed to the maximum cap of £4M pa for 10 years

plus the £2M surplus from 2012• December 2013 – financial impact on all schools plus

considered potential sites

Council – has agreed to forego expected capital receipts on possible sites for new special schools - Former Passmores site Harlow, former St Peters Chelmsford and former Wickford CDC Developments also possibly at former Heath site Colchester, Bishops Park and Langham.

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YearFinancial Year

Capital Expenditure

Remaining Loan c/f

Interest Charge

Cost of Loan + Interest

Schools' Contributions to Capital

Reserve

Scenario of savings in independent placements at 2.5% of cost Variance

Scenario of savings in independent placements at 5% of cost Variance

Scenario of savings in independent placements at 10% of cost Variance

    £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000  2013/14 - - - - 2,000           1 2014/15 16,500 16,500 404 404 4,049           2 2015/16 21,000 35,667 885 2,718 4,049 300 3,749 590 3,459 1,190 2,8593 2016/17 4,500 35,708 902 5,360 4,049 600 3,449 1,190 2,859 2,380 1,6694 2017/18 - 30,607 781 5,882 4,049 890 3,159 1,790 2,259 3,570 4795 2018/19 - 25,506 656 5,757 4,049 1,190 2,859 2,380 1,669 4,770 -7216 2019/20 - 20,405 531 5,632 4,049 1,490 2,559 2,980 1,069 5,960 -1,9117 2020/21 - 15,304 406 5,507 4,049 1,790 2,259 3,580 469 7,150 -3,1018 2021/22 - 10,202 281 5,382 4,049 2,090 1,959 4,170 -121 8,350 -4,3029 2022/23 - 5,101 156 5,257 4,049 2,380 1,669 4,770 -721 9,540 -5,49110 2023/24 - 0 31 5,132 4,049 2,680 1,369 5,370 -1,329 10,730 -6,681Total   42,000  5,035 47,035 42,494 13410 23,031 26820 9,613 53,640 -17,200Net Present Value 37,981    31,681 31,681           

Assumptions

Note 1:

Borrowing is based upon a Public Works Loan Board fixed rate loan that is repayable by the Equal Instalments of Interest (EIP) method

Per the UK Debt Management Office Technical Note dated 21 December 2012, EIP loans are repayable by: equal half-yearly instalments of principal together with interest on the balance outstanding at the timeLoans are assumed to be taken out at the start of the financial yearPrincipal repayments start in the year following the start of the loanFinancing charges are based on a 10 year loan at 2.45% (PWLB EIP rate as at 9th July 2013)

Financing charges start 6 months after the start of the loan

Note 2:Schools contributions will be made over a period of 10 years from 2014/15 until 2023/24 (plus £2m in 2013/14)

Financial Implications

Out of authority placements

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DfE Approval of use of DSG to fund Invest to Save

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The DfE attended Essex County Council on 17 April to find out more about the proposals and the wider SEND strategy.

They were positive about the proposals and asked helpful questions about effective implementation of managing the demand for special school places.

We will inform DfE of Schools Forum decision and then expect shortly formal approval by DfE.

Prioritised Proposals for SEND Invest to Save

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1. Bishop’s Park, Clacton (existing PFI building) - 72 place secondary special school (including 10 Year 6 places) no residential (plus 50 place PRU)

2. Former Passmores site - 100 place secondary special school (including 10 Year 6 places), 30 residential plus 6FE secondary required in 5 years’ time

3. St Peters, Chelmsford - 100 place all-through Autism Spectrum Specific special school, 30 residential (plus 100 place PRU)

4. Wickford CDC - 100 place secondary special school (including 10 Year 6 places) with 30 residential

5. 30 place residential accommodation (proposed to be at existing Langham) for young people with ASD who attend day provision at Market Fields.

6. Lexden Springs expanded to 150 places and relocated to The Heath site.

Draft initial cost estimates based on viability studies prior to formal discussions about specific sites

Bishops Park 72 place special school £1,200,000

Passmores 100 place special school + 30 place residential

£12,900,000

St Peters 100 place ASD school + 30 place residential

£12,260,000

Wickford 100 place special school + 30 place residential

£12,330,000

Langham 30 place ASD residential £3,260,000

£41,950,000

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Developing Outline Business Cases (OBCs)

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The OBC is the document that sets out the delivery of the project in detail. It will evaluate/test the following issues:• The site - access, parking, road network, topography, ground

contamination etc.• Any existing buildings that may be remodelled as part of scheme

– surveys etc.• Proposed design of new building – form, height, orientation,

materials• Relationship with other uses on site• Legal arrangements • Delivery programme• Detailed cost plan

The technical work is proposed to be completed by 30 June 2014, so the OBCs can be drafted by the end of July 2014 with schools built for 2016/ 17

Schools Forum, 21 May 2014

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Schools Forum asked to confirm commitment to up to £4m a year to fund this programme with the understanding that each year there will be an attempt to reduce this from any other budget areas that can be reduced (2014-15 amount to be £2.9m) and that DSG savings will reduce this contribution from 2017.