Key Changes to our funded 3G pitches Terms and Conditions

The Football Foundation is always looking for ways to support sites and ensure the most is made of the joint investment from its funding partners into facilities.  

It became clear that we needed to update our advice to sites following some insights we gained from Football Foundation Support Day meetings and learnings from our 2023 Pitch Replacement survey of over 200 sites. Alongside this we have also taken into consideration the increase in construction costs. It became apparent we needed to introduce new measures to support sites in being financially sustainable for the duration of their funding terms and conditions period, and beyond, whilst allowing them to focus on providing a great facility for the local community to access.

These updates are different to the terms and conditions that were in place at the start of your project development.  The new requirements have been introduced to aid sustainability, protect our collective investment and ensure we adapt to the increase in construction costs.  

The Football Foundation needs to ensure it’s supporting organisations in the right way to save enough funds specifically for the replacement of their pitch(es). Usually, replacement is required after a minimum of 10 years, although we are seeing well maintained pitches meet the required performance standard for longer. Applicants are required to manage the facility in line with their project plan (business case) and to maintain the upkeep of the facility at all times.

Considering the above, the following key changes have been implemented with immediate effect:  

• National Pitch Replacement Fund Account – Payment into a protected fund where the Football Foundation is a Trustee.
• Annual Pitch Replacement Values – Increase to the annual amount.
• VAT - To be included in the Project Plan for sites where this applies.
• Use of a Football Foundation procured Booking System.  
• Updated Terms and Conditions. 

The National Pitch Replacement Fund will:  

• Ensure sites have the required Pitch Replacement Fund value available at the time their pitch(es) needs to be resurfaced. We expect a well maintained and managed 3G pitch surface to last between 10 and 12 years and it’s the grant recipients’ responsibility to pay for the resurfacing of the pitch(es).
• Ensure applicants benefit from a competitive interest rate which will be applied to all funds saved. 
• Ensure the organisation complies with the Terms and Conditions of Grant.

How the National Pitch Replacement Fund works:  

• The National Pitch Replacement Fund will be held with an authorised bank; Barclays Bank, which is regulated by the Financial Conduct Authority (FCA).  
• The funds for each site will be held in individual virtual accounts, which will have the applicants name detailed, and will sit under one Physical ‘Header’ Account that is managed by the Football Foundation.
• The funds will receive interest, currently agreed as the Bank of England Base rate minus 2% so an effective rate 3.25% (June 2024). This rate will be reviewed on a regular basis with Barclays Bank.
• An annual statement, as a minimum, will be sent by the Football Foundation, which will detail the balance and the interest accrued.  
• The interest accrued on the increasing balance should off-set future inflation on the pitch replacement works. It’s anticipated that the quarterly and annual payments into the Pitch Replacement Fund will remain the same until the time of replacement unless the Football Foundation advise otherwise due to market conditions.  
• Each virtual account is protected under the Financial Services Compensation Scheme (‘FSCS’) limit of £85,000 as is the case for any institute used to save funds. There will be one virtual account opened per grant.
• The Football Foundation will be a Trustee to the National Pitch Replacement Fund account. Beneficiaries (pitch owner organisation) will be able to draw down the funds with the Football Foundations written agreement that the funds are being released to resurface the pitch, ‘The intended purpose’.  
• The Football Foundation cannot use the funds for any reason. The funds belong to the pitch owner or organisation as the beneficiary and can only be released to them for the purpose of pitch replacement. 

Annual Pitch Replacement Fund Values:  
  
The Pitch Replacement Fund annual values have been revised in response to general cost increases experienced in the construction market and to future proof for alternative infill systems. This table sets out the existing and new annual Pitch Replacement Fund values:  

Where you are making an application to the Football Foundation, your Project Plan will have been updated to accommodate these increases. Your Delivery Manager will discuss this with you and work through any pricing implications that the additional Pitch Replacement Fund contributions may bring. We need to work together to mitigate any impact on users that are outlined in the programme of use and find a sustainable balance.

The Pitch Replacement figures in the Project Plan have not been linked to inflation on an annual basis as new projects are required to pay into a National Pitch Replacement Fund which will accrue interest. The interest is expected to offset the annual inflation cost increase and will be monitored on a regular basis. Organisations historically funded by the Football Foundation should account for inflation annually if they don’t receive interest on their Pitch Replacement Fund.  

All 3G pitch operators are obligated to keep an up-to-date five-year Income & Expenditure forecast for their pitch(es) and annually review pricing policies to ensure they can generate their Pitch Replacement Fund value sustainably. It’s recommended organisations regularly test the market for pitch replacement costs to ensure that enough funds are being saved for when they are needed.

VAT:  

Within the Project Plan it’s now possible to add in the cost of VAT to organisations that this will apply to.  

Many applicants can fully reclaim VAT, however, amongst the ‘Clubs and Communities’ sector, there are organisations who aren’t able to reclaim VAT or who may only be able to partially reclaim VAT. For these organisations the cost of VAT should be added to the operational costs to give a true reflection on budgets required.  

There are three options to select from the Project Plan when asked ‘Is it possible to reclaim VAT on Capital Items?’:  

• Yes Full – No VAT cost is added to the figures.  
• Yes Partial – An assumption has been here that a site can reclaim 50% of the 20% VAT cost – So 10% is added to all expenditure figures.  
• No – The full VAT of 20% is added to all 3G Pitch, Floodlighting and Booking System costs.  

Input VAT on income and VAT on other expenditure lines are not automated, so you’ll need to make an allowance for this, and the applicant should seek expert VAT advice.  

The booking system will:  

• Provide a clear view of the 3G pitch(es) usage and clearly show any unused time slots.
• Allow grant recipients the opportunity to market unused slots to new users or to run development opportunities for priority groups identified through their Community Engagement.
• Allow the site to collect payments at the time of booking and reduce the administration burden on site staff.
• Help the grant recipient to collect and submit consistent data to the Football Foundation as part of the grant monitoring process.
• Ensure that facility operators can focus on growing the game and ensure the facility is used to its full potential.

Smart Access and Floodlight control (subject to the floodlight system being smart) are options that can be added if the applicant chooses this. These would need to be discussed with your Delivery and Technical Project Managers.  

Grant recipient use of the Clubspark booking system:   

• The Football Foundation has established a single supplier framework for a booking system provider for sites to utilise for the funded facilities at a site – the system supplier is ‘Clubspark’.  
• A recorded presentation to introduce applicants to the Clubspark system will be provided.
• Full training will be provided to each organisation on how to use the system once the account is set up.  
• The Football Foundation will cover part of the fees for the Clubspark system, in line with the grant percentage awarded for Year 1 of a site being open to a shared maximum value of £3,000. The remaining fees should be built into the annual project plan (business case) to be paid from revenues generated through community lettings.  
• The total cost of the system will depend on the number of transactions. There is an annual Clubspark licence fee of £288 (Excl. VAT) with the remaining costs incurred from transaction fees.    

Terms and Conditions:  
  
The Football Foundations Terms and Conditions are being updated to make explicit the replacement obligations for organisations that receive Football Foundation funding. The other updates contained in this guidance will also be reflected in the updated Terms and Conditions that are issued alongside a grant award offer.