Subject:
Planned Maintenance Budget and Asset Management Fund
Allocations and Education Capital Resources and Capital Investment
Programme 2025-2026
Date of meeting: 20 March 2025
Report
of:
Cabinet Member for Finance & City Regeneration
Contact Officer:
Name: Nilesh Pankhania
Tel: 07795 823280
Email: Nilesh.pankhania@brighton-hove.gov.uk
Ward(s) affected: All Wards
Key Decision:
Yes
Reason(s) Key:
Expenditure which is, or the making of savings which are,
significant having regard to the expenditure of the City
Council’s budget, namely above £1,000,000 and is
significant in terms of its effects on communities living or
working in an area comprising two or more electoral divisions
(wards).
1.1
The purpose of the report is to inform the Cabinet of the level of
available capital resources allocated to support education
buildings and to recommend a capital programme for 2025/26 in
respect of School Condition Allocations (SCA), Basic Needs and High
Needs Provision Capital Allocation (HNPCA) funding.
1.2
The report also seeks approval for the annual revenue budget
allocation and programme of maintenance, improvements and Health
& Safety works for the council’s operational property
portfolio. In this respect, the report details the allocations for
two budget areas: The Planned Maintenance Budget
(“PMB”) and the Asset Management Fund
(“AMF”).
1.3
The Planned Maintenance Budget (PMB) covers essential repair works
to civic offices, historic, operational, commercial and
environmental buildings and consists of a combined revenue and
capital budget of £3,941,940 and a Social Care Planned Works
Budget of £500,000, totalling £4,441,940 for
2025/26.
1.4
The annual Asset Management Fund (AMF) is a capital budget for
property improvements and health & safety works totalling
£1,000,000.
2
Recommendations
2.1
Cabinet notes the level of available capital resources totalling
£4.200m for investment relating to education buildings.
2.2
Cabinet agrees the allocation of funding as shown in Appendix 1 for
inclusion within the council’s Capital Investment Programme
2025/26.
2.3
Cabinet grants delegated authority to the Director of Property
& Finance to procure the capital maintenance and basic need
works required, as set out in Appendix 1, and enter into contracts
in accordance with Contract Standing Orders.
2.4
Cabinet approves the annual programme of planned maintenance works
within the Planned Maintenance Budget as detailed in Appendix 2, at
a total estimated cost of £4,441,940.
2.5
Cabinet approves the allocations from the Asset Management Fund for
2025-26, totalling £1,000,000, as detailed in Appendix
3.
2.6
Cabinet delegates authority to the Director of Property &
Finance to take all steps necessary to procure the Planned
Maintenance Budget works and Asset Management Fund improvement
works and award contracts within these budgets and in accordance
with Contract Standing Orders.
3
Context and background
information
Education Capital Resources and Capital Investment
Programme
3.1
The annual capital finance settlement for education buildings from
central government includes Basic Need, School Condition
Allocations (SCA), High Needs Provision Capital Allocations (HNPCA)
and Devolved Formula Capital (DFC) for community schools.
3.2
Capital finance for Voluntary Aided Schools, academies and free
schools does not form part of the funding allocated to local
authorities as they have access to the separate Condition
Improvement Fund administered by the Department for Education
(DfE).
3.3
The table below shows the allocations of capital grant funding
announced for 2025/26 only and does not include any 2024/25 capital
grant forecast to be re-profiled into 2025/26.
|
Capital Grant
Settlement 2025/26
|
£m
|
|
School Condition
Allocation (SCA)
|
£3.700
*
|
|
Basic Need
Funding
|
£0
|
|
High Needs
Provision Capital Allocation
|
£0
|
|
Devolved Formula
Capital Grant (Passported entirely to schools)
|
£0.500
*
|
|
Total
|
£4.200*
|
* To be
confirmed. Estimate based on 2024/25 allocation.
3.4
In lieu of a final announcement the expectation is that there will
be no appreciable difference to the allocation for the 2025/26
financial year and therefore it is assumed that the SCA will be
£3.700m and the Devolved Formula Capital (DFC) allocation
will remain at £0.500m. This is considered to be a prudent
assumption and a reserve list of works has been complied in case
the actual settlement is higher than anticipated. This is common
practice and enables works and contracts to be set in train without
unnecessary delay while waiting for final confirmation of the
settlement. As in previous years, a formal variation to the capital
programme will be approved through Targeted Budget Management
reports to Cabinet if the final settlement is above or, very
unlikely, below the assumed funding level.
3.5
In March 2022 the Government updated their medium-term allocation
figures for Basic Need capital funding for 2025/26 setting the
level at £nil for this authority.
3.6
HNPCA funding for the 2025/26 financial year may be contingent on
the outcomes of future Spending Reviews. HNPCA for next year cannot
therefore be guaranteed; consequently this is included in the table
as a zero allocation at this time.
3.7
DFC grants are passed directly to schools and therefore are not
available for the Local Authority to spend.
3.8
In addition to the funding from central Government, there is a
Services to Schools buy back option for the council’s
strategic property function to provide schools with a full
condition survey, statutory compliance contracts and access to
advice and support on all property matters. It is anticipated that
this will generate £0.600m for the 2025/26 financial year.
There is a forecast drop in income next year as a result of the
anticipated academisation of the Orchard Schools Partnership and
the closure of two one form entry primary schools.
3.9
This service buy-back resulted from a change in the rules around
the ways in which schools were funded in 2017/18. As a result of
this change a buy-back scheme was created for schools. Since the
change, all community schools have purchased the service while
Voluntary Aided schools buy a partial service (in recognition of
their different status with the council when it comes to property)
and the free schools and academies do not buy the service due to
their direct relationship with the DfE. It is for this reason that
the total buy-back amount has reduced over time.
3.10
The table below shows the level of new resources available for the
Local Authority to commit in the 2025/26 financial year:
|
Capital Resources
2025/26
|
£m
|
|
Capital Finance
settlement
|
£3.700
|
|
Services to
Schools Income
|
£0.500
|
|
High Needs
Provision Capital Allocation
|
£0.000
|
|
Total
|
£4.200
|
3.11
Additional grant funding may be made available throughout the
forthcoming financial year and will be reported separately as
appropriate.
3.13
Any capital underspend arising from the 2025/26 Capital Programme
will be incorporated into the 2026/27 programme when the capital
accounts are closed at 31 March 2026.
3.14
In addition to the Capital Resources set out above, there is an
existing pot of £4.085m of section 106 developer
contributions for education. This is not intended for planned
maintenance of schools but instead is to mitigate the impact on
schools of new developments. There is an emerging programme of
spend in place for this funding, and delivery of that expenditure
will complement this education capital investment programme.
Planned
Maintenance Budget (PMB) & Asset Management Fund
(AMF)
3.16
The council’s property is managed strategically and operated
through a mixed economy Corporate Landlord Model that
centralises the council’s property functions to professional
teams in the Finance & Property Directorate. The aim is to make
best use of council assets to support corporate objectives and
improve the utilisation, efficiency and effectiveness of our land
and buildings. This is supported by the council’s property
asset data and systems that help to inform the process.
3.17
Rolling condition surveys are undertaken
to ensure a robust assessment of the council’s 5-year
requirement for planned maintenance to help prioritise future
programmes of work in conjunction with future service delivery
plans.
3.18
The total available resources of £4.442m approved by Budget
Council relate to those operational buildings where the council has
a repairing liability but excludes council housing, highways, farm
buildings and educational establishments (see earlier) that have
their own budgetary provisions. It includes a planned budget of
£0.111m for Environmental buildings in parks and recreation
grounds, and adopted cemetery walls, etc.
3.19
The Corporate Building Maintenance Strategy sets out a robust
framework to optimise the contribution that property can make to
the council’s priorities and strategic and service
objectives. The aim is to ensure that finite maintenance resources
are prioritised and targeted at key operational assets. In line
with the Budget Strategy to reduce the council’s overall
footprint, the Director of Property & Finance and Head of
Strategic Property will drive a cross-council Operational Asset
Review across all directorates to ensure that any investment in
buildings fits with future service delivery plans and identifies
any possible disposals. This applies to all corporate PMB and
Social Care PMB buildings as well as others e.g. non-school
properties in Families, Children & Well-being. As well as
understanding condition survey requirements over a 5-year period
and an assessment of alignment with Council Plan and Service
priorities, reactive, term maintenance and energy efficiency
implications are also considered. Where potential disposals,
leasing or re-gearing are identified, income generation becomes a
key consideration through either disposal for a capital receipt or
generating revenue from rentals.
3.20
In common with the majority of local authorities, the council faces
an unsustainable backlog in its required
planned maintenance and severe budget challenges, resulting in the
limited maintenance resources being inadequate to meet identified
need. Budget limitations and restrictions applied over a number of
years have therefore meant substantial restrictions on what can be
achieved; that in turn increases prioritised volumes of required
maintenance with growing associated risks.
3.21
Inadequate Planned Maintenance Budget resources are also compounded
by reactive maintenance budgets also being under significant
pressure for effectively maintaining the large and complex
Corporate Landlord portfolio to a reasonable standard. For a number
of years, necessary budget and spending restrictions have been put
in place whereby only urgent, Health and Safety issues could be
addressed. This has resulted in the cumulative effect of buildings
not being maintained to a good standard, which can impact building
user satisfaction and, potentially, revenue generating
opportunities.
3.22
Ultimately, more money is then spent on dealing with emergency and
planned maintenance projects. These become larger in scope and cost
rather than addressing issues in a more timely and proactive manner
when they are small and first realised. Funding reform of Local
Government is therefore important to not only to meet growing
demands across services, but is also important to help councils be
financially sustainable and avoid unnecessary future costs and
liabilities in areas such as property maintenance.
3.23
The annual planned maintenance budget allocation is prioritised in
consultation with services to address the highest critical and most
essential maintenance works and supports
service re-design and delivery. It also aims to ensure that
statutory compliance works, and high-risk Health and Safety issues
are addressed. Essential maintenance includes works of a structural
nature and those that keep buildings watertight. Officers aim to
ensure best use of resources available, secure value for money and
ensure that funding is prioritised. A substantial part of the
planned maintenance budget covers the costs of statutory compliance
testing, routine servicing and maintenance contracts as detailed in
Appendix 2.
3.24
In accordance with the Council’s 50-year lease agreement with
the trustees of the Brighton Dome Complex
on the Royal Pavilion Estate that commenced in
1999, a figure estimated at £0.299m
has been top-sliced from the PMB budget to a sinking fund to
contribute towards maintenance works at the Dome. There is an
obligation within the lease agreement that the council provides a
contribution to this sinking fund each year (that increases by
Retail Prices Index) to go towards helping to maintain the fabric
of the building, items of plant, statutory compliance testing,
routine servicing, etc.
3.25
The Royal Pavilion & Museums buildings were transferred to the
Royal Pavilion & Museums Trust on a
25-year contract on 1st October 2020. The lease
arrangements mean that the Trust is fully responsible for all forms
of external and internal maintenance, health and safety and
compliance for the leased buildings. To financially contribute
towards the upkeep of these council-owned buildings, the council
retains an annual sum within this budget for a planned programme to
be prioritised and agreed between the Trust and the council. For
2025/26 the estimated sum allocated is £0.627m for PMB
from capital reserves and delegated budgets to support the total
maintenance commitment to the Trust.
Summary of the Proposed Annual 2025/26 Planned Maintenance Budget
Programme of Works
3.26
The financial allocation to each
main service area is listed within Appendix 2. For Corporate
Landlord (“CL”) premises the PMB is primarily used for
works relevant to but not exclusive to, for example, safe
Legionella Management and water monitoring, passenger and goods
lifts, boiler refurbishments and replacements, electrical
installations, fire and intruder alarms, automatic doors
etc.
3.27
In the case of Freedom Leisure, the
council would only be responsible for the replacement of main plant
i.e. boiler or air handing plant and main structural repairs of the
premises i.e. roofs and floors. The provision of cyclical
maintenance and reactive repairs remains the responsibility of
Freedom Leisure.
3.28
Flexibility is available during the
year to reprioritise the programme to meet any changing service
priorities, spending restrictions and respond safely to any
emergency requirements within specific buildings.
3.29
There are sums to fund the ongoing
structural propping and engineer checks
to Madeira Terraces whilst the major project of refurbishment
develops. Each service area also has a sum allocated for Health and
Safety risk management works that is to address any unforeseen
required remedial works throughout the course of the
year.
3.30
Examples of areas of
work to the adult and children’s Social Care portfolio
include a variety that address risk reduction to support some of
the most vulnerable, such as roof repairs, structural works, window
repairs and internal and external redecorations.
3.31
The Asset Management Fund 2025/26 is
an annual capital fund of £1.000m to support priority
property improvements, property related
Health & Safety requirements and access improvements under the
Equality Act 2010. It forms part of the corporate Capital Strategy
2025/26 along with the Strategic Investment Fund of £0.250m
and the Information, Technology & Digital Fund of
£0.500m.
3.32
The proposed overall Asset
Management Fund allocation is as follows and details of the proposed allocations can be found in Appendix
4 which includes support for a computer aided facilities management
system to support compliance of our operational buildings, a
breakdown of the reprioritised Workspaces Innovation programme,
important health & safety improvements to major operational
buildings, and property related health & safety and Equality
Act requirements:
|
Description
|
Funding
£m
|
|
1.
General Property Improvements
|
|
|
1a
Computer Aided Facilities Management (CAFM) System
|
0.150
|
|
1b
Corporate core
buildings – security, customer centres
Energy
Performance Certificates
|
0.100
|
|
1c
Workspace
Innovation Programme - Corporate programme project support, service
delivery changes, Operational Accommodation strategy
|
0.130
|
|
|
|
|
Subtotal general
property
improvements
|
0.380
|
|
2.
Equality Act Improvements
|
|
|
2a
Rolling programme of access improvements to corporate Buildings-
incl. Hove & Brighton Town Hall evacuation lift and Accessible
WC provision / changing places to various locations
|
0.355
|
|
3.
Property Related Health & Safety Legislation
|
|
|
3a
Asbestos Management
|
0.040
|
|
3b
Legionella Management
|
0.075
|
|
3c
Fire Risk Assessment Works
|
0.150
|
|
Subtotal
Equality Act & property related Health & Safety
|
0.620
|
|
TOTAL
OVERALL
|
1.000
|
4
Analysis and consideration of
alternative options
4.1
For Education Capital resources the allocations are driven by need
assessed by DfE. Resources are not sufficient to clear all backlogs
or meet all demands and are therefore prioritised according need,
including health & safety requirements, and in consultation
with schools.
4.2
For the Planned Maintenance Budgets, failure to provide maintenance
of the council’s building stock, conform to Health and Safety
and other statutory legislation to meet liabilities would increase
existing risks, inhibit service delivery, lead to a negative
perception of the council, reduce the value of the assets and
prevent fulfilling the council’s priorities, aims and
objectives as stated in the Asset Management Plan and Council Plan.
Property teams work closely together to ensure that these
programmes of work align with services and the limited funding is
prioritised to meet service objectives and/or meet accessibility or
health and safety requirements.
4.3
For the Asset Management Fund, failure to improve the
council’s core office accommodation, address property related
access obligations under the Equality Act 2010 and property related
Health & Safety legislation would increase council risks and
liabilities, inhibit service delivery, may lead to a negative
perception of the council, reduce the value of our assets and
prevent fulfilling the council’s priorities, aims and
objectives as stated in the Asset Management Plan and the corporate
priorities in the Council’s Plan.
5
Community engagement and
consultation
5.1
Regarding Education Capital investments, as individual projects are
developed, the necessary consultation is undertaken and reported to
the Cabinet Member or Cabinet depending on value and in accordance
with Contract Standing Orders. As part of the Community Engagement
Framework, consultation with school Heads is undertaken to
establish where urgent works may be required.
5.2
Regarding PMB, consultations have taken place with all services
and with technical officers across
property functions.
5.3
The Workspace Innovation Programme will
involve extensive internal and external consultations on customer
and service delivery requirements. This includes extensive
engagement with community stakeholders and residents affected by
the Moulsecoomb Hub works and supporting widespread consultation of
staff through the Future Ways of Working programme and Operational
Accommodation Strategy.
5.4
The procurement of planned maintenance
frameworks and the cyclical, term and reactive contracts are either
covered by the Procurement Forward Plan or, where a new
requirement, will be reported to and considered by either the
relevant Cabinet Member or Cabinet depending on value.
6
Financial
implications
6.1
The report sets out the allocation of Education Capital resources
included in the Capital Investment Programme 2025/26. The capital
resources will meet ongoing capital maintenance requirements as
well as addressing refurbishments, additional provision and other
matters including SEND requirements.
6.2
The report details the resources available for investment into the
Education Capital Investment Programme for 2025/26. The report
includes assumed Government grant contributions for Education
Capital Maintenance of £3.700m and Devolved Capital Formula
of £0.500m which are subject to confirmation from the DfE in
due course. Any change to this assumption from the final settlement
will be reported in future TBM reports. The capital resources
include income estimated at £0.600m for 2025/26 that relates
to Services to Schools buy-back associated with the strategic
property function. This income will further assist with maintenance
spend identified in this report.
6.3
The council’s Planned Maintenance Budget for 2025/26 provides
a total £4,441,940 for annual planned maintenance expenditure
on the council’s civic offices, historic, operational
(excluding schools, housing and highways) social care buildings,
environmental buildings and commercial buildings. Included within
this annual budget and overall programme of works are items that
will be capitalised and included in the 2025/26 Capital Investment
programme. As noted, a permanent annual contribution toward the
Dome Complex sinking fund estimated at £298,675 has been top
sliced from the Corporate Planned Maintenance Budget. The Royal
Pavilion & Museums buildings will receive a contribution of
£627,000. The proposed budget allocation to the respective
building portfolios reflects the risk prioritisation outlined in
the report and is shown in Appendix 2 to this report.
6.4
The Planned Maintenance Budget will be met from a combination of
recurrent revenue resources and capital borrowing. The borrowing
costs have been factored into the Medium-Term Financial
Strategy.
6.5
The council’s capital programme also provides £500,000,
for essential repair works to Social Care premises. This is funded
from borrowing with the financing costs met corporately within the
General Fund capital financing budget.
6.6
The programme of works set out in the appendices can be funded from
within the agreed budget allocations for 2025/26. Emerging
compliance risks will be addressed by reprioritising the allocation
as required. Risk and priorities will be reassessed and considered
in the development of the allocation for 2025/26.
6.7
The General Fund Revenue Budget, Capital & Treasury Management
Strategy 2025/26 to Budget Council approved the allocation of
£1,000,000 capital resources to support the Asset Management
Fund 2025/26. The Asset Management Fund allocation will be met from
capital receipts. The Asset Management Fund allocations will be
incorporated into the council’s Capital Investment Programme
2025/26 to support the schemes identified within the table at
paragraph 3.30 and Appendix 4.
6.8
Any running costs associated with the investments in this report
will be met from existing budgets.
Finance officer consulted: John
Lack Date consulted:
20/02/25
7.1
The works contemplated by this report must comply with relevant
lease conditions, health and safety and other applicable
legislation. All forms of procurement outlined in this report must
comply with the Council’s Contract Standing Orders and public
procurement regulations.
7.2
The access improvement works proposed
will assist the Council in meeting its obligations under The
Equality Act 2010.
Lawyer consulted: Hannah
Bassett
Date consulted: 27/02/2025
8.1
The key risks that need to be mitigated and regularly monitored
are:
a)
Insufficient BHCC
technical officer capacity to undertake and manage schemes. It is
currently proposed to recruit suitably qualified staff to fill
current vacancies.
b)
Potential
increases in scope from original briefs that could require
additional funding. Early contact with schools needs to be
established to ensure original briefs are accurate and no
variations in scope are experienced.
c)
Any
delays to decision-making could result in general deterioration of
assets that could prevent schools from running in a safe
environment. This is supported by ensuring that condition surveys
are done in a thorough and exhaustive manner to avoid the incidence
of urgent works.
9
Equalities
implications
9.2
The provision of on-going access works under the rolling programme
will assist in the council in meeting requirements under the
Equalities Act 2010.
10
Sustainability
implications
10.1
The detailed planning of projects at educational establishments
will take account of the implications of Brighton and Hove’s
policies in relation to sustainability issues generally.
10.2
The council will consider how best to undertake the planned
programme in a responsible, sustainable way. Projects within the
planned programme are procured using new building maintenance
frameworks put in place in 2023/24. The successful contractors are
required to demonstrate that they will minimise waste, meet targets
for reductions in waste to landfill and optimise the recovery,
reuse and recycling of waste. In addition to this they are required
to describe the steps they will take to minimise the use of
resources (water, fuel, energy from fossil fuels) and improve
sustainable sourcing. The framework contracts include Performance
Indicators in respect of sustainability and Environmental
Management and these will be monitored on a quarterly basis.
10.3
Energy efficiency audits have been carried out across selected
buildings within the operational estate that are the largest
contributors to the council’s carbon emissions. These audits
identified opportunities for energy efficiency measures that will
be prioritised into a programme of works and an investment strategy
working towards a carbon zero position in 2030. Energy efficiency
measures are incorporated into maintenance and improvement works
whenever appropriate to help the council meet its CN2030
target.
10.4
The sustainability of projects is considered at the outset to
ensure the best outcomes for the building and its users. The
building works undertaken will improve the thermal performance of
buildings overall. This can include items such as repointing,
replacing curtain walling with aluminium systems which have better
lifecycle costs, recyclability and energy efficiency. When
replacing or refurbishing roofs the council looks to exceed
Approved Document L requirements in terms of energy efficiency. The
insulation installed when undertaking roofing works is rated A+
(the highest) in the BRE Green Specification Guide.
11
Health and Wellbeing
Implications:
11.1
The safety and maintenance of properties, including appropriate
checks e.g. legionella, contributes to the health and well-being of
building occupants and users.
Other Implications
12.1
The Council’s Contract Standing Orders set out the
council’s process for the procurement of building works.
Larger value projects are delivered through the most appropriate
procurement route as determined by the project team in
collaboration with the appointed procurement lead. Planned
maintenance projects are procured predominantly through frameworks
set up in collaboration with East Sussex County Council colleagues.
There are seven planned maintenance framework Lots for varying
values of building works, mechanical, electrical, roofing and
asbestos removal. Where appropriate for works below £15,000,
the council’s reactive repairs and minor works framework is
utilised.
12.2
The 7 planned maintenance framework lots create added social
value to the city with an increased
benefit to the local economy and environment. There is an increased
focus on sustainability by officers and contractors in line with
the council’s sustainable procurement policies.
13
Conclusion
13.1
Educational assets are required to be either replaced, upgraded or
refurbished so that the schools can operate uninterrupted and
without raising a risk to the welfare of staff and children. In
order to maintain a safe environment, it is imperative to carry out
these works as it could invalidate insurance terms and
conditions.
13.2
The proposed financial allocations to a prioritised annual
programme of planned maintenance works (PMB) are set out in
Appendix 2. Note, this excludes areas such as council housing,
highways and those structures falling on highway land, car parks,
public conveniences, city parks roadways and paths, city clean
messrooms, and hostels, etc which have their own budgetary
provisions.
13.3
This report also sets out the proposed Asset Management Fund
financial
allocation
as detailed at paragraph 3.30
and
Appendix 3 for property
improvements,
access requirements under the Equality Act 2010 and
property
related Health & Safety requirements for 2025/26.
Supporting Documentation
Appendices
1.
Proposed
Education Capital Planned Maintenance Schemes 2025/26
2.
Proposed
Corporate Planned Maintenance Budget Allocations 2025/26
3.
Proposed
Asset Management Fund Allocations 2025/26
4.
Proposed
Social Care Planned Works Budget Allocations 2025/26
