School Standards and Framework Act 1998

Section 22.

SCHEDULE 3 Funding of foundation, voluntary and foundation special schools

Part I Foundation, voluntary controlled and foundation special schools

Obligations of governing bodies

1 (1) The governing body of a foundation, voluntary controlled or foundation special school are (in accordance with section 22(4)) not responsible for any of the expenses of maintaining the school.

(2) Sub-paragraph (1) does not apply to the repayment of the principal of, or interest on, a loan made to the governing body.

Obligations of LEAs as regards provision of sites and buildings (otherwise than in connection with statutory proposals)

2 (1) In the case of a foundation, voluntary controlled or foundation special school, the local education authority shall provide—

(a) any new site which is to be provided in addition to, or instead of, the school’s existing site (or part of its existing site), and

(b) any buildings which are to form part of the school premises.

(2) Sub-paragraph (1) does not—

(a) apply in relation to the provision of any site or buildings which the authority or promoters are required to provide by virtue of Part III of Schedule 6 (provision of premises in connection with statutory proposals); or

(b) require the local education authority to finance the acquisition by the governing body of any site or buildings provided otherwise than by the authority.

(3) Where a site is provided for a school under this paragraph, the local education authority shall transfer their interest in the site, and in any buildings on the site which are to form part of the school premises—

(a) to the trustees of the school, to be held by them on trust for the purposes of the school, or

(b) if the school has no trustees, to the school’s foundation body or (in the absence of such a body) to the governing body, to be held by that body for the relevant purposes.

(4) If any doubt or dispute arises as to the persons to whom the authority are required to make the transfer, it shall be made to such persons as the Secretary of State thinks proper.

(5) The authority shall pay to the persons to whom the transfer is made their reasonable costs in connection with the transfer.

(6) Where—

(a) a transfer is made under this paragraph, and

(b) the transfer is made to persons who possess, or are or may become entitled to, any sum representing proceeds of the sale of other premises which have been used for the purposes of the school,

those persons shall notify the local education authority that paragraph (b) applies to them and they or their successors shall pay to the local education authority so much of that sum as, having regard to the value of the interest transferred, may be determined to be just, either by agreement between them and the authority or, in default of agreement, by the Secretary of State.

(7) In sub-paragraph (6)(b) the reference to proceeds of the sale of other premises includes a reference to—

(a) consideration for the creation or disposition of any kind of interest in other premises, including rent; and

(b) interest which has accrued in respect of any such consideration;

and for the purposes of any agreed determination under sub-paragraph (6) regard shall be had to any guidance given from time to time by the Secretary of State.

(8) Any sum paid under sub-paragraph (6) shall be treated for the purposes of section 14 of the [1841 c. 38.] Schools Sites Act 1841 (which relates to the sale or exchange of land held on trust for the purposes of a school) as a sum applied in the purchase of a site for the school.

(9) A determination may be made under sub-paragraph (6) in respect of any property subject to a trust which has arisen under section 1 of the [1987 c. 15.] Reverter of Sites Act 1987 (right of reverter replaced by trust for sale) if (and only if)—

(a) the determination is made by the Secretary of State, and

(b) he is satisfied that steps have been taken to protect the interests of the beneficiaries under the trust.

(10) Sub-paragraph (6) shall apply for the purpose of compensating the authority notified under that sub-paragraph only in relation to such part of the sum mentioned in sub-paragraph (6)(b) (if any) as remains after the application of paragraphs 1 to 3 of Schedule 22 to that sum.

(11) In this paragraph—

• “the relevant purposes” means—

  (a)

  in relation to a transfer to a school’s foundation body, the purposes of the schools comprising the group for which that body acts, and

  (b)

  in relation to a transfer to a school’s governing body, the purposes of the school;

• “site” does not include playing fields but otherwise includes any site which is to form part of the premises of the school in question.

Part II Voluntary aided schools

Obligations of governing bodies

3 (1) In the case of a voluntary aided school, the expenses of discharging any liability incurred by or on behalf of—

(a) the governing body of the school,

(b) any former governors of the school, or

(c) any trustees of the school,

in connection with the provision of premises or specified equipment for the purposes of the school are payable by the governing body of the school.

In this sub-paragraph “specified equipment” means equipment of any description specified by the Secretary of State for the purposes of this sub-paragraph.

(2) In addition, any expenses incurred—

(a) in making to the school buildings of a voluntary aided school such alterations as may be required by the local education authority for the purpose of securing that the school premises conform to the standards prescribed under section 542 of the [1996 c. 56.] Education Act 1996, or

(b) in effecting repairs to the school buildings, other than repairs falling within sub-paragraph (3),

are payable by the governing body of the school.

(3) The governing body of a voluntary aided school are not responsible—

(a) for repairs to the interior of the school buildings, or

(b) for repairs to those buildings necessary in consequence of the use of the school premises, in pursuance of a direction or requirement of the local education authority, for purposes other than those of the school.

(4) Nothing in this paragraph imposes on the governing body of a voluntary aided school which was (either before or after the appointed day) a school of a different description any obligation in respect of a liability incurred at any time before the school became a voluntary aided school if at that time no obligation in respect of that liability was imposed on them, as the governing body of a school of that description, under this Act or the [1996 c. 56.] Education Act 1996, as the case may be.

Obligations of LEAs as regards provision of sites (otherwise than in connection with statutory proposals)

4 (1) In the case of a voluntary aided school, the local education authority shall provide any new site which is to be provided in addition to, or instead of, the school’s existing site (or part of its existing site).

(2) Sub-paragraph (1) does not—

(a) apply in relation to the provision of any site which persons other than the authority are required to provide by virtue of Part III of Schedule 6 (provision of premises in connection with statutory proposals); or

(b) require the local education authority to finance the acquisition by the governing body of any site or buildings provided otherwise than by the authority.

(3) Where a site is provided for a school under this paragraph, the local education authority shall transfer their interest in the site, and in any buildings on the site which are to form part of the school premises—

(a) to the trustees of the school, to be held by them on trust for the purposes of the school, or

(b) if the school has no trustees, to the school’s foundation body to be held by that body for the relevant purposes.

(4) If any doubt or dispute arises as to the persons to whom the authority are required to make the transfer, it shall be made to such persons as the Secretary of State thinks proper.

(5) The authority shall pay to the persons to whom the transfer is made their reasonable costs in connection with the transfer.

(6) Where—

(a) a site is provided for a school under this paragraph, and

(b) work is required to be done to the site for the purpose of clearing it or making it suitable for building purposes,

the local education authority and the governing body of the school may make an agreement providing for the making of such payments, or of such other adjustments of their respective rights and liabilities, as will secure that the cost of the work is borne by the authority.

(7) Where—

(a) a site is provided for a school under this paragraph, and

(b) there are buildings on the site which are of value for the purposes of the school,

the local education authority and the governing body of the school may make an agreement providing for the making of such payments, or of such other adjustments of their respective rights and liabilities, as appear to be desirable having regard to the governing body’s duties under paragraph 3 with respect to the school buildings.

(8) Where it appears to the Secretary of State that provision for any payment or other adjustment ought to have been made under sub-paragraph (6) or (7) but has not been made, he may give directions providing for the making of such payment or other adjustment as he thinks proper.

(9) In this paragraph—

• “the relevant purposes” means, in relation to a transfer to a school’s foundation body, the purposes of the schools comprising the group for which that body acts;

• “site” does not include playing fields but otherwise includes any site which is to form part of the premises of the school in question.

Grants by Secretary of State in respect of expenditure on premises or equipment

5 (1) The Secretary of State may make grants—

(a) to the governing body of a voluntary aided school in respect of qualifying expenditure incurred by them; or

(b) to a relevant body in the case of such a school, in respect of qualifying expenditure incurred by that body on behalf of the governing body.

(2) In sub-paragraph (1) “qualifying expenditure” means expenditure in respect of the provision, alteration or repair of premises or equipment for the school.

(3) The amount of any grant paid under this paragraph in respect of any such expenditure—

(a) shall not exceed 85 per cent. of the expenditure, and

(b) in the case of any prescribed class or description of such expenditure, shall be such as may be determined in accordance with regulations.

(4) The times at which, and the manner in which, payments are made in respect of a grant under this paragraph shall be such as may be determined from time to time by the Secretary of State.

(5) Without prejudice to any other duty of his, the Secretary of State shall, in performing functions relating to the exercise of the power under this paragraph to make grants in respect of expenditure on—

(a) such alterations to school buildings as are referred to in paragraph 3(2)(a), or

(b) the repair of school buildings,

give priority to paying grants in respect of expenditure which is necessary for the performance by governing bodies of their duties; and the amount of any grant paid in the exercise of that power in respect of such expenditure on the repair of school buildings shall be 85 per cent. of the expenditure.

(6) Any body to whom any payment is made in respect of a grant under this paragraph shall comply with such requirements determined by the Secretary of State as he may from time to time impose.

(7) Such requirements—

(a) may be imposed on, or at any time after, the making of any payment by reference to which they are imposed, and

(b) may at any time be waived, removed or varied by the Secretary of State;

but such requirements may be imposed after the making of any such payment only if the Secretary of State is satisfied that in all the circumstances it is reasonable for them to be so imposed.

(8) Such requirements may, in particular, if any conditions specified in the requirements are satisfied—

(a) require the application for purposes connected with the provision of education in appropriate schools of—

(i) any premises or equipment in respect of which the grant has been paid under this paragraph, or

(ii) an amount equal to so much of the value of any such premises or equipment as is determined in accordance with the requirements to be properly attributable to the payment of the grant; and

(b) in the event that that requirement is not complied with, require the payment to the Secretary of State of the whole or any part of the following amount.

(9) That amount is—

(a) the amount of the payments made in respect of the grant under this paragraph, or

(b) the amount mentioned in sub-paragraph (8)(a)(ii),

whichever the Secretary of State determines to be just.

(10) When deciding whether to make any grant to a body under this paragraph in circumstances where he considers that it would be appropriate to impose requirements falling within sub-paragraph (8), the Secretary of State may have regard to whether, if such requirements were imposed, that body would have an enforceable right against some other person to be given by that person such financial assistance as would be necessary to enable them to pay to the Secretary of State the amount mentioned in sub-paragraph (9).

(11) No grant may be paid under this paragraph in respect of any expenses incurred in the provision of any premises which it is the duty of the local education authority to provide.

(12) In this paragraph—

• “appropriate schools”—

  (a)

  in relation to a voluntary aided school having a religious character, means schools which are either foundation or voluntary schools and whose specified religion or religious denomination under section 69(4) is the same as that school's, and

  (b)

  in relation to any other voluntary aided school, means maintained schools;

• “relevant body”, in relation to a voluntary aided school, means the appropriate diocesan authority or the school’s trustees;

• “repair” does not include repair falling within paragraph 3(3).

Grants by Secretary of State in respect of preliminary expenditure

6 (1) The Secretary of State may pay grants—

(a) to the governing body of a voluntary aided school in respect of preliminary expenditure incurred by them for the purposes of any scheme for the transfer of the school to a new site or the enlargement or alteration of the school premises, or

(b) to a relevant body in the case of such a school, in respect of any preliminary expenditure incurred by them, on behalf of the governing body, for the purposes of any such scheme.

(2) Where any persons propose or are considering whether to propose the establishment of a voluntary aided school, the Secretary of State may pay grants to them in respect of any preliminary expenditure incurred by them for the purposes of a scheme for the provision of a site for the school or of any buildings which would be school buildings.

(3) Grants under sub-paragraph (1) or (2) may be paid in respect of a scheme such as is mentioned in that sub-paragraph whether or not—

(a) the details of such a scheme had been formulated at the time when the expenditure was incurred,

(b) where such details were not formulated at that time, they are subsequently formulated,

(c) the governing body or persons in question had determined to proceed with such a scheme at that time, or

(d) where they had not determined to proceed with such a scheme at that time, they subsequently determine to proceed with such a scheme.

(4) Expenditure in respect of which such grants are payable includes, in particular, costs incurred in connection with—

(a) the preparation of plans and specifications for any proposed construction, enlargement or alteration of buildings which are or would be school buildings, and

(b) estimating the sums which would be expended if any such works were carried out,

but does not include any sums expended in carrying out any such works.

(5) A grant under sub-paragraph (1) or (2) shall not exceed 85 per cent. of the expenditure in respect of which it is paid.

(6) Where—

(a) a grant is paid under sub-paragraph (1) in the case of any voluntary aided school, or

(b) a grant is paid under sub-paragraph (2) in the case of any school which is established as a voluntary aided school,

the grant shall for the purposes of section 30(2) be treated as expenditure incurred by the Secretary of State (otherwise than in connection with repairs) in respect of the school premises.

(7) In this paragraph “relevant body”, in relation to a voluntary aided school, means the appropriate diocesan authority or the school’s trustees.

Loans by Secretary of State in respect of initial expenses

7 (1) Where, on the application of the governing body of a voluntary aided school and after consulting persons representing the governing body, the Secretary of State—

(a) is satisfied that the governing body’s share of any initial expenses required in connection with the school premises will involve capital expenditure, and

(b) having regard to all the circumstances of the case, considers that that expenditure ought properly to be met by borrowing,

he may make a loan to the governing body for the purpose of helping them meet that expenditure.

(2) The amount, rate of interest and other terms and conditions applicable to the loan shall be such as may be specified in an agreement made between the Secretary of State and the governing body with the consent of the Treasury.

(3) For the purposes of this paragraph “initial expenses” are expenses to be incurred in providing—

(a) a site or school buildings for a voluntary aided school in connection with—

(i) the implementation of any proposals for a prescribed alteration to the school published under section 28, or

(ii) the transfer of the school to a new site, or

(b) a site or school buildings for a new voluntary aided school,

being expenses in respect of which grants may be paid under paragraph 5.

(4) For the purposes of this paragraph the governing body’s share of any initial expenses shall be taken to be so much of the expenses as remains to be borne by the governing body after taking into account the amount of any grant under paragraph 5 that may be paid or payable in respect of them.

(5) The preceding provisions of this paragraph shall apply for the purpose of enabling loans to be made to a relevant body (within the meaning of paragraph 5) in respect of expenses incurred by that body on behalf of the governing body as it applies to expenses incurred by the governing body; and in those provisions, as they apply in relation to a new voluntary aided school, references to the governing body are to the promoters.

(6) Paragraph 3(3) of Schedule 10 (consent to borrowing) does not apply to any borrowing by a governing body under this paragraph.

Assistance by LEAs in respect of maintenance and other obligations of governing bodies

8 A local education authority may give to the governing body of a voluntary aided school such assistance as the authority think fit in relation to the carrying out by the governing body of any obligation under paragraph 3.

Duty to transfer interest in premises provided under paragraph 8

9 (1) Where assistance under paragraph 8 consists of the provision of any premises for use for the purposes of a school, the local education authority shall transfer their interest in the premises—

(a) to the trustees of the school, to be held by them on trust for the purposes of the school, or

(b) if the school has no trustees, to the school’s foundation body, to be held by that body for the relevant purposes.

(2) If any doubt or dispute arises as to the persons to whom the authority are required to make the transfer, it shall be made to such persons as the Secretary of State thinks proper.

(3) The authority shall pay to the persons to whom the transfer is made their reasonable costs in connection with the transfer.

(4) In this paragraph “the relevant purposes” means, in relation to a transfer to a school’s foundation body, the purposes of the schools comprising the group for which that body acts.

Part III Foundation, voluntary and foundation special schools: common provisions

Default powers of Secretary of State

10 (1) Where it appears to the Secretary of State that a local education authority have defaulted in the discharge of their duties relating to the maintenance of a foundation, voluntary or foundation special school, he may—

(a) direct that any act done by or on behalf of the school’s governing body for the purpose of securing the proper maintenance of the school shall be taken to have been done by or on behalf of the authority, and

(b) reimburse to the governing body any sums which in his opinion they have properly expended for that purpose.

(2) The amount of any sum reimbursed under sub-paragraph (1) shall be recoverable by the Secretary of State as a debt due to him from the authority; and without prejudice to any other method of recovery the whole or any part of any such sum may be deducted from any sums payable to the authority by the Secretary of State in pursuance of any regulations relating to the payment of grants.

Endowments

11 Where any sums accruing in respect of the income of an endowment are required by virtue of the provisions of a trust deed to be applied towards the maintenance of a foundation, voluntary or foundation special school, those sums shall not be payable to the local education authority but shall be applied by the governing body of the school—

(a) (in the case of a voluntary aided school) towards the discharge of their obligations under paragraph 3, or

(b) (in the case of any school) in such manner, if any, as may be determined by a scheme for the administration of the endowment made after 1st April 1945.

Disapplication of restriction on local authority disposals

12 Subsection (2) of section 123 of the [1972 c. 70.] Local Government Act 1972 (local authority prohibited from making disposal of land under that section below market value without consent of the Secretary of State) shall not apply in the case of a disposal—

(a) to the governing body of a foundation, voluntary or foundation special school, or

(b) to persons proposing to establish such a school.