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sector SPONSORED FEATURE
Working your assets
Are you making the most of your second best assets? JulIA Green, an education partner at law firm
Browne Jacobson, looks at what systems should be in place to evaluate your school’s land and property
must be a school’s second most valuable asset – its land and property? Out of 365 days a year, school buildings are occupied for mainstream teaching for approximately 190 of them. This represents a 52% usage. We might justify this situation in our residential properties because we have invested in them with an expectation that property prices will increase and at the end of our time there we are going to realise a greater return. But this rationale does not generally extend to commercial buildings, which are built to a cost and have a commercial life expectancy. Schools generally face the problem of out-of-date buildings that are expensive to run and maintain and will eventually become a liability.
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So, it’s important that, where possible, a school ensures it is getting the best return from its land assets. What practical steps can you take? It’s worthwhile investigating what you might be able to do to generate income from the assets you have during the time you are not using them. You could, for example, hire your building out for: conferences car boot sales solar panels adult education classes catering facilities or sports facilities.
Many schools have lettings policies and have arrangements in place already covering public use, so the principle is there already. But could you be more creative? The main issues are around capacity within the existing staff and the best and appropriate use of their time. However, it may be that your business plan would support a staff member’s time spent on asset realisation, especially if it were possible to share that cost among a group of schools that may have different
april 2013 \
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ost schools, when asked to name their most valuable asset, would, of course, identify their staff. It is also probably fair to say that most schools have systems in place for monitoring staff performance to ensure that they get the best return. However can the same be said for what
assets available and be prepared to work together. One school might have state of the art catering facilities that could lend themselves to summer catering courses, another might have a field ideally placed to host a car boot sale and another might be set in grounds that lend themselves to conferencing or produce sales.
So, if you decide that your school may have the capacity to use some of its facilities to better effect, what are some of the factors that you need to bear in mind?
The first is do you have the ability within your corporate documents to carry out the activity? An academy’s objects are set out in the Articles of Association and make it clear that the trust’s primary purpose is to run a school in order to educate children, not to run a commercial enterprise. However, the trustees are given the powers to ‘establish subsidiary companies to carry on any trade or business for the purpose of raising funds for the academy trust’ and ‘to do all such other lawful things as are necessary for or are incidental to or conducive to the achievement of the object’. In short, if the activity you have in mind is creating funds that are returned to the academy trust,
It’s worthwhile investigating what you might be able to do to generate income from the assets you have during the time you are not using them
is ancillary to the main object and not taking over the main school purpose, you have quite a lot of scope.
The second is to consider how you own the land and buildings. Who do they actually belong to and are there any restrictions affecting your use? This is usually one of the following three options: The academy trust owns the freehold. This may have happened where you were previously a trust or foundation school. While in principle this means you have greater freedom, you need to always have in the back of your mind that your land has come from the public purse and any perceived misuse will not be allowed.
More usually, the land is owned by the local authority and let under a 125-year lease. The local authority as landlord may have requirements in the lease in relation to disposals, (remember this includes leases, not just selling off playing fields) alterations and use. There will also be provisions relating to advertisements and signage.
A further option is where the land is owned by the church and the school occupies under a Church Supplemental Agreement, which may refer to restrictions on use contained in the original trust deed, or imposed upon the board or trust by law.
Other matters to consider are whether planning permission or other
consents are required? Does a risk assessment throw up issues that need to be investigated further? What are the insurance implications? using your assets to best effect will depend on the type of school you are, your geography, your catchment, your facilities and, most of all, your appetite for investing the time to ascertain the possibilities. However, for most schools facing falling budgets, creativity and enterprise are going to play an increasing part in being able to provide the education we all want for our children and if you have the assets why not use them as best you can.
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