From 1st September 2024 some important changes to government restrictions around finance leases for academies are expected to come into effect. Here we explain what’s changing and how the news could impact the financial strategy of UK schools.
PLEASE NOTE: These changes may be reviewed in the future and so may be subject to change.
Leasing for schools
Leasing enables schools to acquire the equipment they need to thrive and advance by spreading the cost over time.
Historically schools have been restricted in this area, i.e., they have only been able to enter into what is known as an operating lease. As only a limited number of funders offer this type of lease, schools were limited in their choice of funder and the interest rates available to them.
In addition, in the type of assets that could be leased were generally restricted to IT equipment.
From 1st September 2024 these restrictions are expected to change for academies enabling them to enter into other types of minimum term and fixed finance leases (excluding hire purchase). Other types of schools such as LEA controlled schools are expected to be able to access the same range of lease arrangements from 1st April 2024, but this is subject to government confirmation.
This change in regulations means that academies will have more choice in terms of the type of finance leases they can use to support their operation without additional administrative burdens. This in turn means access to a wider pool of funders and, potentially, more competitive interest rates.
The changes will also bring about a change in terms of the types of assets that can be leased, i.e., there is now much more flexibility and choice.
What type of assets will be eligible?
The government has issued a list of eligible assets that will be able to be financed under the new regulations. If the leased assets are included in the categories below, they will not require submission to the Department for approval:
- IT equipment (e.g. laptops, tablets, desktop computers, printers, photocopiers, servers, door entry security systems, CCTV Systems, whiteboards/touch screen boards)
- Telephony (e.g. mobile phones, landline phones, telephone systems)
- Catering equipment (e.g. tills, water coolers, vending machines, dishwashers, washing machines, ovens, fridges, freezers, water boilers, small kitchen appliances, crockery/cutlery)
- Furniture (e.g. desks, tables, chairs)
- Bathroom/sanitary Items (e.g. hand dryers, towel dispensers, sanitary bins)
- Gym equipment (e.g. treadmills, free weights/weight machines, rowing machines, exercise bikes)
- Grounds keeping equipment (e.g. lawn mowers, string trimmers, leaf blowers, salt spreaders)
- Minibuses and other vehicles for the use of the school
- Temporary classrooms and equivalent structures.
If the assets you wish to finance are not included in the above list, then Secretary of State approval will be required.
If your academy is in need of new equipment or assets that fall into the eligible categories, leasing could enable you to get what you need sooner rather than later without budgetary constraints. Rather than parting with a chunk of your cash all at once or delaying essential equipment upgrades, a lease enables you to spread the cost over a period of time via an affordable payment plan.
Bluestone Leasing has over 25 years of experience in arranging bespoke finance solutions for schools, colleges and universities, enabling them to acquire the assets their pupils and staff need to fulfil their potential.
To request a call-back from one of our knowledgeable and friendly team, send us a message using the form below. Whether you are planning to invest in new assets soon or are simply interested in finding out more about leasing in general, we will get back to you as soon as possible.