Capital funds are what schools get to spend on their information and communications technology (ICT). This money is normally spent on items like hardware and software licences and, until now, online subscriptions. However, the kinds of facilities that support current government ICT policies - subscriptions for content services, learning platforms and suchlike – are considered to be suitable for revenue, rather than capital expenditure.
The Treasury makes no allowances for these changes in practice, and following the end of Electronic Learning Credits (ELCs - capital expenditure) there is now genuine confusion. Apparently some LAs have advised their schools that they cannot use the new funding for subscriptions for digital content – this was how the problem came to light - and a number of school suppliers are understood to be facing commercial disadvantage as a result.
Now the British Educational Suppliers Association has issued advice to its members on interpreting the Harnessing Technology grant. It quotes guidance from the Becta website which says that:
- “the new Harnessing Technology Grant, allocated through the Standards Fund, repackages the previously available separate capital grants for ICT, i.e. 121 national digital infrastructure grants for schools; 122 e-learning credits;
- “schools and local authorities are also able to use Devolved Formula Capital and the Schools Development Grant to fund ICT priorities;
- “decisions on how schools and local authorities spend this grant should be based on local and school-level needs and priorities."
Becta has also produced clarification, and while it helps in some areas, it does not appear to ease concerns about the kinds of subscription services that Government policies have been promoting: ‘From 2008 onwards the Harnessing Technology Grant is the principal source of funding for ICT in schools - it is capital funding so can be used to purchase ICT-related products (including digital curriculum content) which qualify as capital expenditure. Local authority finance teams will advise schools on what is and is not eligible for capital spending, in line with DCSF regulations.
'Annual payments count as revenue expenditure'
“Content subscription services which require annual payments count as revenue expenditure, so the Harnessing Technology Grant cannot be used to pay for these - but schools may use other sources of revenue funding (such as the School Development Grant) to cover the costs of such services."
Besa director Ray Barker says it's time for more transparency on funding and how it can be spent. "We need to get some clarity around this for industry and the end-user alike. It’s not helpful when different advice sources seem to be saying different things. Teachernet says that capital grants ‘must not be used for the purchase of books, ICT software or training materials/services’ and yet other sources are telling us that software purchases are OK but subscription services are not.
"If we want to really move forward with ICT in schools, investment in development of innovative software is key and this will be stifled if the market is seen to be restricted again – in whatever way. For the end-user, making choices between software and a new roof is not going to lead to a revolution in teaching and learning."