on Friday, 04 November 2016.
A new edition of the Academies Financial Handbook came into force on 1 September 2016.
Whilst the Handbook does not change the rules relating to consent for land transactions, it is important for academies to remind themselves of the provisions to avoid delays in property transactions and also to avoid breaching the provisions inadvertently.
The Handbook requires academies to obtain written consent from the Education Funding Agency (EFA) prior to entering into various types of property transactions, including:
It is common for academies to also need consent for any disposals or acquisitions of their property under the terms of their Funding Agreement. As well as checking the Handbook, therefore, academies should also review the terms of their Funding Agreement.
In addition, academies should consider the manner in which property is held as, for example, academies which have long term leases may find its terms restrict their ability to dispose of land.
To apply for consent to a land transaction, an academy is required to complete and submit the relevant application form to the EFA (all of which are available online). There are a number of different forms available depending on the nature of the transaction. In particular, there are specific rules that need to be followed for the disposal of school playing field land.
Depending on the scale, size and value of the transaction, the EFA may require evidence of the market value or market rent for a particular transaction from a property professional in order to consider the application for consent. Academies should obtain this evidence in advance of their application and prior to finalising the terms of the transaction. The terms of the transaction will also need to be disclosed in the application form.
The academy's Accounting Officer will need to sign the form and confirm, amongst other things, that the academy has taken the appropriate legal, financial and property advice, the transaction represents value for money and that the trust is satisfied about all safeguarding issues.
Once the application form has been submitted, the EFA usually acknowledges receipt within three working days and will then determine if all necessary information has been supplied. The EFA advise that in most cases it aims to provide a decision within 10 to 30 working days of receipt of the application form and all information, depending on the complexity of the proposed transaction, although we note that in some instances applications can take considerably longer.
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