The Learning Escape aims to create sustainable, beautiful buildings that not only facilitate positive learning experiences but also the reintroduction of nature to the curriculum. However we understand that financial restrictions can prevent schools and nurseries from investing in an eco-classroom development, so we always try to help direct you to the best funding options available.
State Funded Schools are not allowed to “lease to buy.” Unlike privately funded establishments, they are not allowed to enter into hire purchase or lease purchase arrangements. State funded organisations are however, permitted to enter into operating lease agreements or rental agreements which satisfy the stipulated criteria.
We have relationships with a number of finance providers and will be very happy to put you in touch to discuss your options including operating leases.
Why are State Funded Schools required to use Operating Leases?
Government funding to some state funded organisations such as schools attracts the lowest level of interest charges possible. In order to protect education budgets Government imposed controls on schools, forbidding them (except with the Secretary of State’s prior permission) to borrow or use Finance Leasing from external organisations such as banks and leasing companies at commercial rates of interest.
Qualifying Operating Leases are not prohibited and require the school to pay a number of rentals for hire of the equipment. Where the rentals paid are subjected to a Net Present Value calculation (NPV) and the sum total of rentals payable is less than 90% of the true capital cost of the equipment, the Government views this as good value and therefore allows schools to enter into Operating Leases.
What Happens at the End of the Operating Lease? At some point towards the end of the lease you will be asked what you would like to do with the equipment at the end of the lease rental term.
You have two choices:
1. Return the equipment with nothing further to pay. Please note the return of the equipment must be in accordance with the Return Conditions signed at the outset of the lease.
2. Continue to use the equipment for a further period of time and pay additional lease rentals. The new rentals will be negotiated when the end of lease discussion takes place. The new rentals will be at “fair market value”. Extended use can be from a month to a number of years.
Over a 5 year period for every £1000 spent on a building, the monthly cost of an Operating Lease would be £18.51.
Generate revenue to cover the cost of an operating lease
Some of our customers use their eco-classrooms for pre and after school clubs. Often this can generate revenue to fully cover the cost of an operating lease. In this way the school has additional classroom space to use during school hours at no additional cost to the school budget.
Benefits of an Operating Lease
- Enables immediate acquisition of a Learning Escape
- No up-front capital outlay required
- Aims to shift expenditure from Capital to Revenue budget (off-balance sheet)
- Spreads the cost of equipment for periods up to 5 years
- Fixed costs for easier budgeting
- Value for money alternative to outright purchase
Contact us or call today on 0800 917 7726
At The Learning Escape our extensive experience working with schools means that we understand that budgets can be tight. Making changes to school grounds and adding additional classrooms are often projects that money isn’t readily available for. However for many schools that want to make sustainable and environmentally aware developments, there is help at hand.
There are hundreds of school funding options available for those seeking financial assistance for an eco-classroom development. Searching through the streams of options and terms and conditions can be overwhelming so at The Learning Escape we have produced a funding report to help get you started. If you'd like to talk about anything in the report just give us a call on 0800 917 7726.
If you need some help to get started we can arrange for a 20 minute call call with our funding expert Samantha Morris. Just call or use the form below.
A comprehensive and up to date funding information service for UK primary and secondary schools.
School Fund Finder
A comprehensive guide to grants, awards, competitions, in-kind support and free equipment available to UK schools