Key Changes to our funded 3G pitches Terms and Conditions

Why are changes are being made?   
We are updating our advice and introducing some new measures to ensure that sites can focus on delivery and are sustainable for the duration of funding terms & conditions and beyond.  These changes are different to what you have previously been advised during the development of your project and have been driven by the insight and learning gathered from Football Foundation grant recipient Support Day meetings and a 2023 survey of over 200 sites as part of a Football Foundation review into historical sites and how they prepare for the replacement of their pitches. We have also seen construction prices increase in recent years meaning that sites need to plan for this as they become operational. 
 
Costs are rising for 3G pitch construction due to general cost rises seen across the industry. We need to react to this to ensure sites we've funded are saving enough into their Pitch Replacement Funds and that it is ringfenced specifically for the replacement of their pitch/es.  
  
To date the Football Foundation has given 940 grants to fund 1,094 3G pitches with a grant value of ~£458m. These grants are awarded with the advice that recipients must take care of their own pitch replacement, usually after a minimum of 10 years, although we are seeing well maintained pitches last 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 are to be implemented with immediate effect:  

• National Pitch Replacement Fund  Account – Payment into a protected fund where the Football Foundation are 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 needs to be resurfaced.   
• Benefit from a competitive interest rate, which can be applied to all funds saved, and is easily accessible at the time of the pitch needing to be replaced. 
• Ensure the organisation complies with its T&C's.

How the National Pitch Replacement Fund works:  

• This National Fund will be held with an authorised bank, Barclays, 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.
  • The funds will receive interest, currently agreed as a margin to base rate.
  • An annual statement, as a minimum, will be sent by 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 is anticipated that the quarterly payments 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 would be the case for any institute used to save funds.  
  • The Football Foundation will be a Trustee to the National Pitch Replacement Fund account and beneficiaries will not be able to draw down the funds without the Football Foundations written agreement.  
  • The Football Foundation cannot use the funds.
  • The funds belong to the individual entity and can only be released to them for use on pitch replacement. 

Annual Pitch Replacement Fund Values:  
  
The Pitch Replacement Fund annual values are being revised in response to general cost increases experienced in the construction market. This table sets out the existing and new annual Pitch Replacement Fund values:  

For a standard 106m x 70m 11v11 pitch the increase in annual values is 28%.

Your Project Plan has been updated to cater for these increases and your Delivery Manager will discuss this with you and work through any pricing implications that this may bring.  
  
The Pitch Replacement figures have not been indexed 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. For historical Football Foundation funded organisations, they should account for inflation annually if they don’t receive interest on their pitch replacement fund.  
  
This change will have an impact on project business cases and in some instances will require the pitch hire costs to increase. We collectively need to mitigate any impact on the proposed users in the programme of use and find a sustainable balance. 
  
All sites/3G operators are encouraged to keep an up-to-date five-year Income & Expenditure forecast for the pitch and regularly review pricing policies to ensure they can generate their pitch replacement fund value. It is recommended to regularly test the market for pitch replacement costs to ensure that enough funds are being saved for the time of replacement. 

VAT:  

Within the Project Plan it is 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 are not able to reclaim VAT or 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 ‘It is 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 Football Turf Pitch, Floodlighting and Booking System costs. 

Input VAT on income and VAT on other expenditure lines are not automated, so you will 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 usage  
• clearly show any unused time slots,  
• provide grant recipients the opportunity to market these slots to new users or to run development opportunities for the 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 anonymised data to the Football Foundation as part of the grant recipient monitoring process. This will 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 and would need to be discussed with your Delivery and Technical Project Managers.  

Grant recipients with no existing booking system:  

• The Football Foundation has established a single supplier framework for a booking system provider for sites to utilise – 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 installed. 
• The Football Foundation will cover a percentage 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 £2,000. The remaining fees should be annually built into the project plan (business plan) to be paid from pitch revenues.   
• The total cost of the system will depend on the number of transactions. There is an annual licence fee of £288 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.