Paying more than LIP service

May 5, 2011

Last month saw the publication of the James Review of capital spend on education. Matthew Wolton examines the recommendation in relation to the use of Local Investment Plans and the implications for local authorities.

In July 2010, the Secretary of State for Education, Michael Gove, asked Sebastian James, Group Operations of Dixons Retail plc, to lead an independent review of capital spend on education. This was against the background of the incoming Coalition Government’s scaling back of Labour’s huge and much-criticised Building Schools for the Future (BSF) programme, and other concerns about the effectiveness of education capital spending. The Review panel was asked to look at the allocation and distribution of capital funds, at removing unnecessary burdens and at achieving value for money on capital investment.

One of the key findings of the James Review was that capital investment in education had not been allocated well enough to combat gaps in pupil place provisions. Rather than a multitude of funding streams it recommended that the Department for Education should fund local authorities via a single budget on the basis of what the individual authority’s needs are for pupil places and the condition of the school estate.

Once this budget is in place a Local Investment Plan should be drawn up to set out the priorities for how the capital funding is to be used.

The Review proposes that the “Responsible Bodies” should agree what these priorities are. This term is clarified as being a reference to those bodies that make strategic investment decisions and take ultimate responsibility for the use, maintenance and management of the schools – i.e. education providers. It suggests that this will usually cover the relevant local authority, diocese, Academy Trust or other charitable bodies.

The Local Investment Plan should not be a highly developed document (mention is made of not returning to “the burdens of Strategies for Change”) but there is no clear guidance as yet on what information should be included. The Review does suggest however that it should comprise:

a brief summary of the local priorities for expenditure covering new build, extensions or refurbishments;
high-cost maintenance projects, such as roof replacements; and
a plan for maintenance and upkeep of the estate and how local condition data will inform decision-making and demonstrate progress.

The Review specifically recommends that the local authority is given the leadership role in bringing all the relevant local Responsible Bodies together in a “fair, inclusive and transparent process” to agree the Local Investment Plan. Five bullet points are included covering what the process is designed to ensure:

there is a fair and inclusive prioritisation procedure involving all relevant partners, with simple and rapid avenues for appeal, and one that minimises bureaucracy;
that the need for new school places is met and offers parents a fit-for-purpose, diverse choice of education for their child, including in free schools where that opportunity exists;
that action is taken to address those schools most in need of refurbishment/replacement/urgent works, regardless of the type of school or VAT implications;
that maintenance responsibilities are clearly understood with relevant bodies accountable for the condition of their estate; and
that the local plan includes opportunities to benefit from other sources of capital such as Section 106, asset sale or philanthropic payments.

Once the plan has been agreed by the Responsible Bodies it must be approved by the new Central Body, set up to act as an ‘expert client’ for DfE capital investment.

The Review makes clear that although the initial assumption is that the plan would be based on an individual local authority’s geographical area there is nothing to prevent several local authorities coming together to create a single investment plan, for example covering London. If this is something that is attractive to a local authority it should start exploring the viability now of such an approach with neighbouring authorities.

It is plain from the summary proposals that local authorities will have to work ever more closely with other education providers to be able to produce these Local Investment Plans. There must be no bias towards the maintained sector which means local authorities will need to work hard to ensure the other bodies are fairly and equally represented and any tensions are managed. Whether this will be on a formal or an informal basis will depend on the organisations involved in each area, however the earlier parties start discussing the issues the easier it should be to agree in the future. Local authorities will need to give careful thought to how they will resource this role given the significant changes to their education departments with spending cuts on the one hand and the ever-increasing move towards free-standing academies, free schools and UTCs on the other.

The other work that should be started as early as possible is to pull together as much information as is available on the current condition of the educational estate and what work is needed to ensure facilities are fit-for-purpose.

Meanwhile we await further guidance and/or what information is provided on what the DfE expects should be contained in Local Investment Plans, as well as the thoughts and reactions of local authorities as they start to understand what will be expected of them in leading on the agreement of these plans.

Matthew Wolton is director of TPP Law and head of the firm’s specialist education practice. He can be contacted on 020 7620 or by email at This email address is being protected from spambots. You need JavaScript enabled to view it..