With Capital budgets coming under more strain and more being needed for each £ spent, options are available for schools to be innovative with their premises budgets. Funding is available for classrooms to match extra pupil numbers through revenue budgets rather than capital budgets.
In April, the DFE changed the guidance for leasing for LA schools and Academies.
The changes have an immediate effect on LEA-maintained schools, but the Academies implementation may not apply until September 2024.
Links to DFE changes:
Changes to leading agreements for maintained schools
Changes to leading agreements for academy trusts
In short, LEA Schools can now have finance leases, for the assets listed below, without having to get permission from the Secretary of State. A finance lease is a full pay-out lease and therefore the assets are NOT treated as an off-balance sheet item. This came into effect on April 1st 2024.
At the end of the lease title of the assets can be passed to a 3rd party e.g. PTA, or Board of Governors, for a one-off fee, rather than having to go through a secondary rental period.
You will still be able to have Operating Leases but Finance Leases tend to be more flexible, especially with regards to the assets that can be financed. There will continue to be situations where a school may still wish to elect for an Operating lease; especially for assets with a shorter ‘shelf life’, such as tablets for example.
Note that the asset classes listed are:
Academies will continue to be restricted to Operating Leases until the end of August 2024.
The stringent rules surrounding operating leases are removed for starters. The content of the leases is far more inclusive of a typical installation, and the lease quotes can be made immediately.
Complete flexibility, we can fund from 1 year to 7 years depending upon the asset and any sort of payment profile that you need. The cherry on the cake for you (and your school) is that it should work out far more cost-effective and budgeting is straightforward.
