§ Mr. WyattTo ask the Secretary of State for Education and Employment (1) how many grant maintained-foundation schools with basic need capital building projects starting after 1 April will have building works which are liable for VAT; how these building projects 569W will be funded after August; how payments will be made to individual schools, with particular reference to the role of local education authorities in passing on funding to schools; and what arrangements are in place for grant maintained-foundation schools to reclaim VAT paid on these projects; [71357]
(2) how many grant maintained-foundation schools have basic need capital building projects starting after 1 April; in how many of these cases the funding will be provided directly to the school via the Funding Agency for Schools; what is the estimated cost of those projects for which funding will be provided directly to the schools via the Funding Agency for Schools; and what proportion of these costs (a) relate to new buildings and (b) involve no element of VAT on the building works. [71356]
§ Ms Estelle MorrisUntil 31 March 1999, responsibility for the progress of basic need capital projects in grant-maintained schools remains the responsibility of the Funding Agency for Schools (FAS). I have written to the Chairman of the FAS, asking him to write to my hon. Friend, and will arrange for a copy of the reply to be placed in the Library.
In a recent letter to all grant-maintained schools, which was prepared jointly by the Funding Agency for Schools and the DfEE officials, the FAS explained that, between 1 April 1999 and 31 August 1999, the Department will assume responsibility for the payment of capital grant in respect of such projects. My right hon. Friend the Secretary of State intends later this year to lay Regulations under Schedule 32 to the School Standards and Framework Act 1998, which will give him the powers to pay grant after 31 August 1999 to foundation schools and other former grant-maintained schools for capital projects committed before 1 September 1999. That letter also explained that where the Department agrees to pay grant on work which attracts VAT which cannot be reclaimed, the level of grant allowed will reflect this. Liability for VAT will depend on the nature and purpose of the building works.
Decisions about when refunds of VAT can be claimed from HM Customs & Excise are for the Financial Secretary to the Treasury.