Academies forced to apply for government loans
An estimated one in seven of all open academies have turned to the Department for Education in a bid to borrow sufficient costs to repair crumbling buildings.
However, a number of head teachers’ leaders are warning academies to be ‘extremely cautious’ before applying for such loans in light of the forecasted tougher financial conditions. Leaders are warning that the interest charges incurred will only add more pressure to the schools.
Since April 2015, academies and sixth-form colleges have been eligible to borrow funds of up to £4 million at a ‘favourable rate’ from the Condition Improvement Fund, whereby repayment methods last up to 10 years.
Malcolm Trobe, deputy general secretary of the Association of School and College Leaders warned teachers about the difficulties faced by the post-16 college sector.
He said: “[Academies] are being pushed into this position as a result of the limited amount of capital money available through the Condition Improvement Fund. Institutions are keen to avoid their building stock falling into a really problematic condition.”
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