Education Act 1996

278 Disposal of school property: supplementary

(1) Where by virtue of an order under section 274 the premises used or formerly used for the purposes of the school, or any part of those premises, are vested in persons proposing to establish a new independent school on the premises—

(a) such an order may require those persons to discharge any liabilities of the governing body in liquidation in respect of redundancy payments, and

(b) where the order does so, those liabilities shall be taken into account in determining the amount of consideration (if any) which those persons are required to pay by virtue of section 277(3).

(2) Subsection (1) does not apply to any property held on trust for the purposes of the school otherwise than by the governing body.

(3) Where the premises used or formerly used for the purposes of the school, or any part of those premises, are to be used for the purposes of a new or existing grant-maintained school, an order under section 274 may provide for the transfer to the governing body of the new or existing school of such rights or liabilities of the governing body in liquidation as were acquired or incurred in connection with the premises which are to be so used.

(4) If—

(a) the school was an aided or special agreement school immediately before it became grant-maintained,

(b) proposals have been approved under section 43 (approval of proposals for establishment or alteration of voluntary schools) for the maintenance as a voluntary school of a school which is proposed to be established on the school premises, and

(c) the Secretary of State has directed that the proposed school shall be an aided school,

any section 67 loan liabilities of the governing body in liquidation shall on the dissolution date be transferred to and become liabilities of the temporary governing body of the new school (subject to any variation of the terms applicable in relation to the loans in question immediately before that date that may be agreed between the Secretary of State and that governing body).

(5) If—

(a) subsection (4)(a) and (b) apply, but

(b) no direction that the proposed school shall be an aided school has been given before the dissolution date,

any section 67 loan liabilities of the governing body shall be terminated on that date.

(6) If—

(a) any liabilities of the governing body have been terminated by virtue of subsection (5), and

(b) a new voluntary school is established on the school premises in pursuance of any proposals approved under section 43,

the amount of those liabilities shall be treated for the purposes of section 173 (restrictions on discontinuance of voluntary schools by governors) as expenditure incurred by the Secretary of State (otherwise than in connection with repairs) in respect of the premises of the new school.