EDUCATION, ENGLAND Citation, commencement, application and interpretation 1 1 These Regulations may be cited as the LEA Budget, Schools Budget and Individual Schools Budget (England) Regulations 2004 and shall come into force on 13th January 2005. 2 These Regulations apply in relation to the financial year beginning on 1st April 2005. 3 These Regulations apply only in relation to England. 4 In these Regulations— a “the 1996 Act ” means the Education Act 1996 ; b “the 1998 Act ” means the School Standards and Framework Act 1998; c “the 2000 Act ” means the Learning and Skills Act 2000 ; d “the 2002 Act ” means the Education Act 2002 ; e “the 2003 Regulations ” means the LEA Budget, Schools Budget and Individual Schools Budget (England) Regulations 2003 ; f a reference to capital expenditure means expenditure which an authority propose to capitalise in their accounts in accordance with proper practices being those accounting practices— i which the authority are required to follow by virtue of any enactment, or ii which so far as they are consistent with any such enactment, are generally regarded whether by reference to any generally recognised published code or otherwise, as proper accounting practices to be followed in the keeping of the accounts of local authorities, either generally or of the description concerned ; g a reference to CERA means capital expenditure which an authority expect to charge to a revenue account of the authority; h a reference (however framed) to a community, foundation or voluntary school, a community or foundation special school or maintained nursery school includes a proposed school which on implementation of proposals for the establishment of the school will be such a school and which has a temporary governing body; i the “Excellence in Cities” and “Excellence Clusters” programmes mean the programmes of that name under which funds are paid to schools; j references to expenditure are references to that expenditure net of— i all related specific grants, ii all related fees, charges and income, iii funding received from the Secretary of State in respect of PFI scheme unitary payments, and iv any LPSA grant which the authority propose to apply to an agreed activity or activities in pursuance of targets specified under the relevant Local Public Service Agreement received by the local education authority; k a reference to a former grant-maintained or grant-maintained special school is a reference to a school which was such a school within the meaning of the 1996 Act immediately before 1st April 1999; l a reference to a formula means a formula determined (after consultation) by the local education authority before the beginning of the financial year beginning on 1st April 2005 by which they will determine schools' budget shares in that financial year having regard to factors, criteria and requirements prescribed in regulations made under section 47 of the 1998 Act; m a reference to a governing body includes the temporary governing body of a proposed school falling within paragraph (h); n a reference to the individual schools budget means the amount of a local education authority’s schools budget which remains after the authority has deducted any classes or descriptions of planned expenditure set out in Schedule 3 in accordance with the provisions of regulation 6, and which is divided between the schools the authority maintains in the form of budget shares for those schools; o a reference to LPSA grant is a reference to a special grant paid to the authority under section 31 of the Local Government Act 2003 in connection with a Local Public Service Agreement into which the authority has entered; p “maintained school” means a community, foundation or voluntary school or a community or foundation special school or a maintained nursery school; q a reference to a particular class or description of expenditure in relation to maintained schools and to pupils registered at such schools shall include any expenditure of that class or description as the authority may incur in relation to Academies and to pupils registered at Academies; r a reference to a PFI scheme unitary payment is a reference to a charge payable by the local education authority under a private finance transaction; s a reference to a primary or secondary school means a primary or secondary school which is a community, foundation, voluntary or maintained nursery school; t a reference to a private finance transaction is a reference to a transaction as defined by regulation 16 of the Local Authorities (Capital Finance) Regulations 1997 ; u a reference to proposals for the establishment of a school is a reference to a proposal for the establishment of the school under section 28 or 31 of, or paragraph 5 of Schedule 7 to, the 1998 Act, section 70 of the 2002 Act, or section 113A of and Schedule 7A to the 2000 Act; v a reference (however framed) to schools maintained by a local education authority does not include schools which are pupil referral units ; w a reference to specific grant means any grant paid to the authority under conditions which impose restrictions on the particular purposes of the authority for which the grant may be used, provided that a specific grant shall not include— i any grant made by the Learning and Skills Council for England under section 7 of the 2000 Act in respect of sixth form funding, ii any specific grant which is used to support expenditure through the individual schools budget, or iii any allocation made to schools from funding deducted from the Schools Budget in accordance with paragraph 32 of Schedule 3 to these Regulations; x “standards fund grant” means the sum of money paid under that name to a local education authority by the Secretary of State under section 14 of the 2002 Act. Revocation 2 The LEA Budget, Schools Budget and Individual Schools Budget (England) Regulations 2002 are revoked on 1st April 2005. Schools Budget 3 The classes or descriptions of local education authority expenditure specified in paragraphs (a) to (d) are hereby prescribed for the purposes of section 45A(2) of the 1998 Act and the determination of a local education authority’s schools budget, subject to the exceptions in regulation 5— a expenditure on the provision and maintenance of maintained schools and on the education of pupils registered at maintained schools; b expenditure on the education of pupils at independent schools, non-maintained special schools , pupil referral units, at home and in hospital, and on any other arrangements for the provision of primary and secondary education for pupils otherwise than at schools maintained by a local education authority; c expenditure incurred in borrowing money for the purpose of facilitating the modernisation and rationalisation of the school estate provided the local education authority— i has consulted the schools forum on the amount of any proposed expenditure, ii reasonably believes in incurring the expenditure that the revenue savings that will be achieved are equal to or more than any expenditure that will be incurred in borrowing the money, and iii is able to demonstrate to the satisfaction of the Secretary of State how such savings are to be achieved; and d all other expenditure incurred in connection with the authority’s functions in relation to the provision of primary and secondary education, in so far as such expenditure does not fall within paragraph (a), (b) or (c). LEA Budget 4 1 Subject to paragraph (2), the classes or descriptions of local education authority expenditure specified in Schedule 1 are hereby prescribed for the purposes of section 45A(1) of the 1998 Act and the determination of a local education authority’s LEA budget. 2 The classes or descriptions of local education authority expenditure specified in Schedule 1 shall not include any of the following— a any expenditure which, by virtue of the authority’s scheme (as defined by section 48(5) of the 1998 Act) or by virtue of any enactment, falls to be met from a school’s budget share; or b any expenditure which falls within paragraph 1(2) or 2 of Schedule 3. Exceptions 5 A local education authority’s LEA budget or schools budget shall not include the following classes or descriptions of expenditure— a capital expenditure other than CERA; b expenditure on capital financing other than expenditure incurred under regulation 3(c); c expenditure for the purposes of section 26 of the Road Traffic Regulation Act 1984 (arrangements for patrolling school crossings); and d expenditure incurred by the local education authority under section 51A of the 1998 Act (expenditure incurred for community purposes). Individual schools budget 6 Subject to the provisions of Schedule 2, a local education authority may deduct from their schools budget any or all of the classes or descriptions of planned expenditure set out in Schedule 3, in whole or in part, in order to arrive at their individual schools budget for the financial year. David Miliband Minister of State, Department for Education and Skills 9th December 2004