TG Escapes Blog
Have you considered funding your extra classrooms with an Operating Lease?
The headlines this week have highlighted the growing number of families whose children have failed to be allocated a place at their preferred primary school next September. For many schools, this will be a far too familiar story, as they have (yet again) been forced to reluctantly turn potential pupils away. Many will have applied for capital funding to increase classroom capacity and some will have been successful. However, a large number of schools will have found their Local Authority purse lacking in sufficient funds to build a long overdue addition to their pupil provision.
The Learning Escape is well acquainted with the plight of schools who have approached us, in desperate need of extra classroom space, only to find they are unable to procure adequate funding. In response, we have sought for an appropriate financial partner to provide a compliant, cost effective and timely financial solution.
Together with Solutions Asset Finance, we are able to offer state funded educational establishments the opportunity to immediately fund an eco-classroom development with no capital outlay. By way of an operating lease (which under current regulations is not classed as borrowing and does not require EFA approval) the arrangement allows a school to shift the cost of additional classroom capacity from the capital to the revenue budget. A leasing period, of up to 5 years, can be chosen to suit your school’s budget and anticipated pupil numbers for the foreseeable future. The monthly outlay will be fixed allowing for easy and transparent budgeting.
At the end of the leasing period, you may find that the pupil bulge has dispersed and you can simply hand the building back (subject to certain return conditions). Alternatively, the school may still be experiencing high levels of demand, in which case a reduced secondary rental rate can be agreed for continued use of the buildings.
In addition to the funding benefits afforded by this method of building procurement, it tends to offer a much better value for money alternative to either outright purchase or a straight forward rental. By way of example, consider a two eco-classroom Learning Escape designed to comfortably accommodate 60 or more pupils, which could be leased over a 5 year period for around £3,700 plus VAT per month, including full installation. A portable classroom solution will cost around 50% more per month and will involve a hefty charge for installation and removal.
If the monthly lease payments still leave your budget looking exposed, you may want to join other schools who have managed to recover some, or all, of the rental costs by subletting the classrooms to breakfast clubs, after-school care providers or holiday clubs. As the buildings have separate access and can be lit and heated independently of the main school buildings, the arrangements can be simply and unobtrusively managed.
Perhaps the biggest advantage of all, however, is that your school can enjoy the addition of beautiful, inspirational learning spaces just for as long as they are needed with no mess; no big upfront costs and no fuss. Nobody knows how long the current rise in the birth rate will continue, if at all. However, we all know how important it is that the current pupil surplus is educated now.
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