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Leasing agreements for maintained schools.

Changes to leasing agreements for maintained schools.

From 1 April 2024, a new International Financial Reporting Standard (IFRS 16 Leases) was introduced for Local Authorities. IFRS 16 Leases ends the distinction between Operating and Finance leases for accounting purposes.

This means that all leases will be now classed as Finance leases, which previously schools were not allowed to enter into without the approval of the Secretary of State.

As a result, the Secretary of State has agreed to a blanket consent to common school leasing activities which are set out below:

  • All existing leases in place on 1 April 2024 for items included in this list.
  • Leases related to IT equipment (for example laptops, tablets, desktop computers, printers, photocopiers, servers, door entry security systems, CCTV Systems, whiteboards and touch screen boards).
  • Leases related to telephony (for example mobile phones, landline phones and telephone systems).
  • Leases related to catering and cleaning equipment (for example tills, water coolers, vending machines, dishwashers, washing machines, ovens, fridges, freezers, water boilers, small kitchen appliances, crockery and cutlery).
  • Leases related to furniture (for example desks, tables and chairs).
  • Leases related to bathroom and sanitary items (for example hand dryers, towel dispensers, sanitary bins).
  • Leases related to gym equipment (for example treadmills, free weights and weight machines, rowing machines and exercise bikes).
  • Leases related to groundskeeping equipment (for example lawn mowers, string trimmers, leaf blowers and salt spreaders).
  • Leases related to LED lighting system (for example lightbulbs, control mechanisms and control panels) - consent is granted where the product has been sourced with support from the Department for Education through Get help buying for schools or from a recommended route on the GOV.UK Find a framework website.
  • Leases related to minibuses and other vehicles for the use of the school.
  • Leases related to temporary classrooms and equivalent structures (but not land leases they sit on, which may require separate consent – see school land transactions guidance).

What schools need to do:

Any leases which fall into the above categories, do not require approval from Derbyshire County Council, however, we do still require details of all new leases entered into, along with a copy of the lease agreement. These should be sent to CS.Accountancy@derbyshire.gov.uk.

Any leased assets not included in the list above will need to be submitted to the Secretary of State for Education for consent. These may include leases relating to land and buildings, see further guidance on the submit a school land transaction proposal page of the GOV.UK website.

As part of this change, Derbyshire County Council sent out a Microsoft Forms survey via email on 13 June 2024 to collect data of all the leases which schools currently have. It is extremely important that your school completes this survey by Friday 19 July 2024, as this information forms part of the Council’s year-end accounts which is required by IFRS 16. 

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