Academies: Capital Funding issues

25th March 2020

Although low on everyone’s priority list whilst focussing on delivery aspects at the moment, there could be financial consequences where your capital funding conditions are not complied with.

The ESFA provides three pots of capital funding:

  • Devolved Formula Capital (DFC) – this is provided for all academy schools.
  • Condition Improvement Fund (CIF) – this is additional funding that must be applied for relating to specific projects, and is not available for academy trusts in receipt of Schools Condition Allocation (SCA).
  • Schools Condition Allocation – this is formula-based funding, replacing CIF for larger multi academy trusts of over 5 schools and 3,000 pupils.

In terms of spending deadlines, DFC has 3 years to be spent, so there is a low risk of it not being spent within the timeline. CIF and SCA however are a different story. 

For most CIF projects they should be spent by 31 March in the year following – so a lot of academy trusts should be finishing spending the CIF awarded as part of the 18/19 round now, and submitting final paperwork to the ESFA.

SCA has similar rules, but as it is a formula-based allocation you instead have two years. So SCA received in 2018 should now be fully spent by 31 March 2020. 

We know from experience in recent audits that some trusts were holding quite significant SCA balances, with plans to use it towards a large project early in 2020 (to meet the deadline).  But with schools in lockdown and suppliers closing too, it will be difficult to ensure that the funds are spent. CIF projects may have similarly run into delays, meaning they won’t be finished by the deadline.

In any situation where you do not expect to be able to comply with the terms and condition of these (or any other) grants, we recommend that you contact the ESFA to request an extension to the deadline.

If you have any queries please do not hesitate to contact us, we will be happy to help.

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