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schools in focus LEGAL
Share and share alike i
Some interesting models are emerging of primary school academies sharing services, sometimes with secondary academies. Education lawyer VincEnt King talks about how collaborative deals can be the answer to improving a school’s balance sheet
n recent years we have become all too familiar with the headlines warning of economic downturns, financial difficulties and public sector cuts. Many readers will have felt the impact of the source of these headlines hit their schools budgets, causing an already difficult balancing act appear insurmountable.
Many local authorities have already made or are planning to make further budget reductions, meaning less funding for schools. this has led to accelerated changing of the landscape in which schools operate. Local authorities are likely to reduce the provision of or commercialise non-statutory services to save costs. With the current squeezing of the public sector, how are schools to survive?
A current trend is for schools to become academies, which, on the face of it, leads to greater autonomy and an increased budget, but results in an increase in burden, responsibility and stress. Some schools consider the conversion not to benefit them presently but intend to convert in the future, while others have found themselves encouraged to do so. For those schools considering the conversion, but can’t see the financial benefit of doing so, or for those academies that are struggling with the new dynamics, can they carve a mutually beneficial path together? the collaboration between academies – whether primary or secondary schools – or the development of formal chains may be the answer. By working together, academies can take advantage of one another’s resources and their strength in numbers. through simple collaborations, academies can take advantage of a stronger bargaining power and can negotiate reduced costs for services they share through economies of scale. this may benefit those academies that are located in rural areas (to the extent that being close to other schools is not necessary in order to deliver savings) or have few pupils. By working together, those academies will be able to reduce costs for services if shared with other academies. collaborative sharing of facilities, resources, staff and the procurement of equipment and services together can help reduce the costs associated with those services, freeing up budget to be spent in other areas. through careful planning, larger scale collaborations may also yield the benefits of the VAt costs sharing exemption provided in the Finance Act 2012. However, to date, take up has been slow and some uncertainty remains. this month, the government intends to clarify how the exemption may be taken advantage of, which will hopefully be the catalyst to encourage academies to share more services and maximise their cost saving. While the exemption remains unclear, the risk of not satisfying the requirements of the exemption would only to be worthwhile taking if the cost-saving resulting from sharing the services is greater than the cost of any applicable VAt. the more formalised solution for collaboration is a collaborative chain. A chain is the term used to describe a number of academies that
september 2013 \
www.edexec.co.uk
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