How and who will pay for £170m schools transformation?
Councillors have been discussing today how Powys County Council (PCC) intends to fund its decade-long plan to transform and reorganise schools.
The first phase of school closures, mergers and new building projects, due to be rubber-stamped at a Cabinet meeting on Tuesday is estimated to cost over £170 million.
PCC hope that they will only have to pay 35% of the building costs with the Welsh Government picking up the rest of the tab.
At their meeting on September 15, the Cabinet voted to enter into an agreement with the Welsh Education Partnership company (WEPco).
This is a Mutual Investment Model (MIM) that will be another funding stream available for building projects.
But, the report shows control of projects for those financed in this way, could be taken out of the council’s hands.
A maintenance contract with a private sector partner and subsidiary of the Welsh Development Bank of Wales, would also run for 25 years after the building work is finished.
Education portfolio holder, Cllr Phyl Davies, explained: “It’s a very comprehensive document of some 1,500 pages, but the principle is the fact that it gives us another option other than capital funding for our schools estate.
“We are not saying that we will go down this road for our schools’ transformation, but it gives us the ability of looking at both options for each business case.”
Head of Transformation and Communications Emma Palmer, said: “We need to sign up to that framework sooner rather than later to keep that door open.”
Adult Social Services portfolio holder, Cllr Myfanwy Alexander, said: “The economic climate is changing rapidly and we don’t know what sort of circumstances we will be borrowing in, interest rates we might be facing, and what impact inflation might have on projects?
“If we rule something like this out at this stage, it’s too late five or 10 years down the line to say I wish we had that option.”
The Cabinet has also voted to allow the Chief Executive, Dr Caroline Turner, in consultation with the Head of Legal and Democratic Services, Clive Pinney, to make necessary tweaks to the contract and sign it off.
The report in front of councillors says that only some 21st century school building projects will qualify for the MIM.
The criteria is that the project would have to be a complete new build, or be worth more than £15 million. This could include several new build schools under one project banner.
School building projects – before the “Transformation Strategy” - had been split into Band A and Band B.
In four years, PCC has completed 10 projects, one is in the construction phase (Welshpool CIW Primary School) and a further eight at the design or early development stage.
The report says: “All projects to date have been funded through capital funding through a combination of supported borrowing, prudential borrowing, and use of reserves.”
Band A have mostly been completed and received 50% from the Welsh Government’s 21st Century schools funding pot.
Band B are the developments that have been approved and planned up to 2024. They expect to receive 65% funding, and special schools qualify for 75% from the 21st Century schools funding pot.
The report shows that for the Band A school building projects, PCC borrowed £27.4 million.
This costs PCC over £1 million a year in interest.
The remaining Band A and B projects to be competed are set to cost £45 million which the report says: “all of which will be borrowing.”
This debt will cost another £2.6 million a year to service.
Overall the report says that delivering the 10-year school transformation strategy will cost £350 million, which is on top of the £202 million that Band A and B projects will cost.
Band A is:
Brecon High School
Gwernyfed Catchment Primary
Carno, Glantwymyn Federation
Welshpool C in W School
Gwernyfed High School
Ysgol Calon Cymru – merged Llandrindod and Builth Wells High Schools
Band B is:
Ysgol Bro Hyddgen – Machynlleth
Ysgol Brynllywarch – special school near Kerry
Developments in Newtown – Cedewain Special School, new Welsh medium high school, new school building for the merged Ladywell Green Infants and Hafren Junior Schools
Welshpool High School refurbishment
Ysgol Gymraeg y Trallwng (Welshpool Welsh medium school)
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