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News - 13 March 2013

Lack of finance delays school rebuilding.

The government's scheme to rebuild England's most dilapidated schools is being held up by delays in finding private cash to fund it.

The government is now looking to capital bond markets and even the European Investment Bank to fund its priority school building programme.

Schools minister David Laws said the programme would be completed on time but he acknowledged that government still had to finalise its plans for private finance deals. He was expecting this to happen very soon.

Peter Ham Auditor and Head of Schools and Charities at ABDS comments:
“The Department for Education's executive arm, the Education Funding Agency, has yet to secure private investment to fund the vast majority (219 of 261) of the projects in the five-year programme.”

It is likely that only a handful of schools, those funded directly by the government, will be rebuilt by the general election.

A survey of the 261 schools in the priority programme, by the Local Government Association found that, of the 158 that replied, only 19 had start dates - and none of the privately financed projects who responded said they had funding secured. Some 66 schools told the LGA they had heard nothing on their rebuilds.

The revelation will be an embarrassment to Mr Gove, who scrapped Labour's Building Schools for the Future scheme in July 2010, saying it was beset by bureaucracy and delay.

According to the construction industry, discussions with the DfE about how to fund the scheme have been on-going since then. And official documents show that the EFA recognised as early as September 2012 "that long term project finance" was constrained, and that it needed to look at alternative sources of finance, including the potential participation of the European Investment Bank.

The Association of School and College Leaders was very concerned to hear of the delays. Its deputy general secretary Malcolm Trobe said the government needed to address the issue urgently and ensure there was no further slippage in the timetable.

If you need any help and advice with Free School or Academy Schools, contact Lavinia Newman or Peter Ham now to discuss how ABDS can help bring their experience to these matters.

ABDS Chartered Certified Accountants of Southampton.
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