The Education (Grant–maintained Schools) (Loans) Regulations 1993

Explanatory Note

(This note is not part of the Regulations)

These Regulations specify the classes or descriptions of expenditure in respect of which the appropriate authority may make loans to the governing bodies of grant–maintained schools under section 92 of the Education Act 1993 and the purposes for which, the terms upon which, and the manner in which such loans may be made.

Under section 92(4) of the Act, the appropriate authority is, in England, the Funding Agency for Schools and, in Wales, the Schools Funding Council for Wales. However, before the Agency or the Council begin to exercise their functions the appropriate authority in each case is the Secretary of State.

Loans to grant–maintained schools may be for the provision of sites or buildings or for other purposes—

• Regulation 2 provides that loans in respect of the provision of a site or buildings for a grant–maintained school established by promoters under section 49 of the Act must not exceed 15% of the expenditure in respect of the provision of the site and buildings for the school. The agreement for the loan must provide for repayment by instalments over not more than thirty years and for repayment to be guaranteed.

• Regulation 3 provides that loans for other purposes must not exceed 50% of the annual maintenance grant in respect of the school for the year in which the loan is made after allowing for any similar outstanding loans. The agreement for the loan must provide for repayment over not more than 5 years.

Regulation 4 requires that an agreement for a loan must provide for interest to be payable at a rate determined by reference to the rates applicable to loans out of the National Loans Fund.

Regulation 5 requires that the agreement must provide that a loan is to be repayable on discontinuance of the school as a grant–maintained school or on withdrawal of its annual maintenance grant. The agreement must also provide that, if the expenditure for which it is made is not incurred, the appropriate authority may require repayment.

Regulation 6 contains additional provisions relating to agreements.