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FR 7 Capital Expenditure

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FR 7 Capital Expenditure


Capital expenditure is an important element in the development of the Authority's services since it represents a major investment in new and improved assets.  The County Council's Financial Regulations provide a consistent framework for the preparation and appraisal of the capital programme, to provide appropriate authorisation for schemes to proceed and to allow services to manage their capital programmes within defined parameters. Whilst it is open to schools to finance capital expenditure from their delegated budgets, the Local Delivery Team needs to be consulted where the total gross expenditure (excluding income) exceeds £20,000 and/or there is a change to the school premises.  School Governing Bodies and Headteachers also need to be aware that certain lease agreements (finance leases) financed from the schools' delegated budgets could constitute capital expenditure.  Capital expenditure is defined in Appendix 2, which also explains the distinction between finance and operating leases.

Where the gross expenditure exceeds £200,000 the County council requires the submission of a business case for consideration by the Local Authority.

The County Council is required to keep an Asset Management Plan, detailing all land and buildings owned, including site plans and layout of buildings.  This plan provides a platform from which centralised capital expenditure plans (amongst other decisions) are made/informed, and it is therefore essential that schools notify the authority of any proposed changes.


7.1     The Governing Body shall notify the Local Authority of any proposed capital (building) works through the self help procedure with a view to:

  • Securing the consent of the County Council before the works are commissioned (where the school premises are owned by the County Council).
  •      Providing details of works to allow the Asset Management Plan and the Net     Capacity Schedules to be updated.  Copies of plans of changes to your        accommodation should be sent to the Local Authority.

7.2     Schools shall not incur expenditure on (non-building) capital items exceeding £20,000 without prior consultation with the Local Authority.  e.g. purchase of I.T. equipment etc.

7.3     Schools shall not enter into finance leases unless the arrangements have been approved       as part of the Authority’s capital programme.  Before entering into any leases with an external party for a period over three years or where the average annual payments are more that £5,000 Schools must seek advice from the Local Authority        .

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