Academies will usually enjoy ownership or control of some or all of the school land and buildings. This will often include unused playing fields and caretaker’s houses, which academies should rightly consider how best to utilise in pursuance of their educational mission. Sometimes, the right thing will be to sell or lease such property in order to obtain some value for an asset that may be a drain on resource. The property that an academy owns is not, though, open to be disposed of at the academy’s will. It has been created by public money and is constrained by considerations of public benefit.
Consequently academies need the prior consent of the Secretary of State for most property transactions, including granting a short lease or tenancy to staff (for the same reason, similar requirements for consent apply to local authority maintained schools). Further, sometimes merely building on playing field land will require specific consent.
A very wide range of transactions is caught by these requirements which are set out in:
- The Academies Financial Handbook
- Each academy’s funding agreement
- Schedule 1 of the Academies Act 2010
- Schedule 22 of the School Standards and Framework Act 1998
Application for consent is made to the Education and Skills Funding Agency. The requirement applies to any disposal or acquisition of land. As such, the requirement is not limited to the sale and purchase of land but includes granting tenancies (for example, assured shorthold tenancies), rights granted over land such as easements, as well as the transfer of an academy site to another multi-academy trust.
Without consent, an academy will be in breach of its funding agreement, which could have serious consequences. Further, in the case of a disposal which is registrable at the Land Registry, the other party in the transaction will be unable to register their interest and the academy may be liable to pay damages for any losses. Perhaps equally importantly, the academy will have missed out on the checks and balances that the ESFA procedure provides. .
There are specific forms to utilise for the consent application depending on the nature of the transaction. These forms will often require detailed information to justify the sale or disposal and to set out how the transaction will financially affect the academy. There are particularly detailed requirements for a disposal involving playing field land. This does not only refer to prepared pitches and other areas used for organised sports – playing field land is widely defined and includes informal and social areas and marginal areas.
Licences and service occupancy agreements may not require consent. However, such situations must be genuine licences or service occupancy agreements, and they will sometimes require consent. This is not always easy to define. We would recommend that schools always take legal advice on any transaction which affects land or property. At Stone King, we have a wealth of experience of dealing with property transactions for school clients and navigating the ESFA consent process and are always ready to help navigate these difficult waters.