Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

GOVERNMENT CONSULTS ON FINANCIAL FREEDOM FOR GM SCHOOLS

  • Comment
The government is inviting views on proposals to allow grant-maintained schools to borrow commercially and keep the...
The government is inviting views on proposals to allow grant-maintained schools to borrow commercially and keep the full proceeds of property disposals.

Separate proposals, also covered in a consultation paper, will enable grant-maintained schools to retain all the proceeds from the disposal of surplus school premises from 1 April 1996.

Announcing the publication of the consultation paper which sets out the proposals, schools minister Robin Squire said:

'We plan, at the earliest legislative opportunity, to enable grant-maintained schools to borrow commercially. They currently rely almost entirely on government funds for capital works and demand for funding exceeds supply. This new freedom will enable them to fund projects which would not otherwise receive support.

'The proposals will bring grant-maintained schools in line with colleges and universities. They will encourage more private sector investment and help the schools to benefit from the government's private finance initiative.'

Under the proposals grant-maintained schools will be allowed to borrow such sums as the governing body thinks fit. They will also be able to grant any mortgage, charge or other security over any land or other property of the governing body.

The Funding Agency for Schools will have responsibility for consenting to individual loans, under guidance from the secretary of state. It will not guarantee or underwrite any school borrowing.

To protect publicly-funded assets, grant-maintained schools will not be able to borrow against assets that are essential to the school's educational provision - 'core' assets.

Separate proposals, also covered in the consultation paper, will enable grant-maintained schools to retain all the proceeds from the disposal of surplus school premises from 1 April 1996. At the moment 50% of the net proceeds is returned to a school's former local education authority for debt redemption.

They will be allowed to charge the full value of these assets - if they are 'non-core' - in any borrowing arrangement.

Mr Squire said:

'These are both practical ways of giving grant-maintained schools greater freedom to provide new facilities. At the same time, vital school assets must be protected. It is important that we get the details right, and I therefore welcome views from all interested parties.'

  • Comment

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions.

Links may be included in your comments but HTML is not permitted.