The ESFA has recently announced forthcoming adjustments affecting how academy schools engage in leasing agreements, effective from September 1, 2024.
There exist two primary types of leasing arrangements: operating leases and finance leases. Finance leases, constituting a form of borrowing, have hitherto necessitated approval from the Secretary of State as outlined in the Academy Trust Handbook.
Commencing September 1, 2024, while academy trusts are still required to differentiate between operating and finance leases for financial reporting purposes, a specific list of assets has been approved by the Secretary of State for Education. This approval grants academy trusts the prerogative to lease these assets under either operating or finance leases without prior consent.
While these changes facilitate the entry into finance lease agreements for specified assets, trusts must remain mindful of achieving value for money.
The following assets have received prior consent from the Secretary of State for Education:
- Existing leases established before September 1, 2024, for items included in this list.
- Leases associated with IT equipment (e.g., laptops, tablets, desktop computers, printers, photocopiers, servers, door entry security systems, CCTV systems, whiteboards, and touch screen boards).
- Leases linked to telephony (e.g., mobile phones, landline phones, and telephone systems).
- Leases tied to catering and cleaning equipment (e.g., tills, water coolers, vending machines, dishwashers, washing machines, ovens, fridges, freezers, water boilers, small kitchen appliances, crockery, and cutlery).
- Leases related to furniture (e.g., desks, tables, and chairs).
- Leases associated with bathroom and sanitary items (e.g., hand dryers, towel dispensers, sanitary bins).
- Leases for gym equipment (e.g., treadmills, free weights, weight machines, rowing machines, and exercise bikes).
- Leases for groundskeeping equipment (e.g., lawnmowers, string trimmers, leaf blowers, and salt spreaders).
- Leases for LED lighting systems or supporting renewable activities (e.g., lightbulbs, control mechanisms, and control panels) – consent is granted if sourced with assistance from the Department for Education or recommended routes.
- Leases for minibuses and other school vehicles.
- Leases for temporary classrooms and equivalent structures (excluding land leases they sit on, which may require separate consent as per school land transactions guidance).
For any inquiries regarding the modifications to leasing agreements, please reach out to a member of our team using the provided contact form below.
