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Premises hire: guidance
Thinking about letting your school premises? Be clear what you need to consider before you get started, like how to set your rates. Plus, know what you should think about when managing the letting process and approving the hirer.
Before you start
You're allowed to charge for extended and community services under the Education Act 2002, as explained in section 6.11.2 of the Governance Handbook.
- Check whether your local authority (LA) sets any rules on this
- If you're a voluntary controlled, voluntary aided or foundation school, speak to anyone else with a stake in your land (e.g. your diocese)
- If you're an academy, check your articles of association and funding agreement to see if they set any restrictions
Setting your rates
Consider your costs
When setting the rate, think about what costs you'll incur. Southwark Council guidance for governing boards on lettings (available to download from this page) suggests considering:
- Heating and lighting costs
- Additional security or caretaking staff required
- Cleaning costs
- Administrative costs
- Cost of equipment hire and/or equipment wear and tear
Don't rush in to offering subsidised rates
Research your potential market well before offering cheaper or subsidised rates to certain groups.
Make sure you're going to make a profit from the premises hire, otherwise it's a lot of time and effort spent for little or no reward.
Some prospective hirers may resent having to pay for the use of a community facility, but stand firm on your pricing.
This advice came from Micon Metcalf, the director of finance and business at Dunraven School.
Figure out whether to add VAT
Talk to HM Revenue and Customs (HMRC), or your school's accountants/auditors, about whether you'll need to add VAT onto your premises hire fee.
Whether you have to do this may depend on things like:
- Your school status (maintained vs. academy)
- Whether the hire is a business activity
- LA policies on charging VAT (if you're a maintained school)
Requirements when you hire your premises out for 'charitable purposes'
If you let your premises out for 'charitable purposes', any profits you make must be reinvested in your school or in the service you've provided.
In maintained schools, a 'charitable purpose' would be any facility or service you provide that benefits the pupils at your school, their families, or people who live and work in your local community.
It includes activities like:
- Childcare (including before and after school, and during the holidays)
- Adult and family learning
- Health and social services
- Parenting support
- Other facilities of benefit to the local community, such as access to ICT or sports facilities
If you're an academy, your trust is a charity. Your charitable objects will be set out in your articles of association.
This is set out in section 6.11.5 of the Governance Handbook (linked to above).
When to get specialist advice
Seek specialist legal and property advice if you're considering allowing private or voluntary sector providers to operate from your school's facilities.
This is especially important for schools (including trust schools and academies) built under a private finance initiative (PFI). The legal status and contractual obligations of PFI contracts could make your situation much more complicated.
If you're a PFI school, check the core hours and extended hours you have rights to, and how core and extended hours are defined in the contract with your PFI provider.
Managing the process
Think about the following before you develop your premises hire policy:
Who will manage it
The headteacher is ultimately responsible for any school lettings, but they can delegate this responsibility to another member of staff (like the school business manager or premises manager).
This person will need to oversee arrangements for:
- Opening and closing the school buildings, and access for external providers
- Managing parent drop-off or pick-up
- Making sure the agreed conditions of hire are followed (including emergency evacuation procedures)
- Transferring pupils between school supervision and clubs run by external providers
Make sure this is clearly set out in your premises hire policy.
The spaces you have available
- Where are your 'no go' areas? How will you keep them secure?
- Which rooms/areas are most accessible?
- If you're hiring out classrooms, where will your teaching staff work after school?
- If you're letting playground space:
- What alternate spaces might be offered during wet or extreme weather?
- If you let to a sports group, where will the children get changed?
Approving the hirer
Before you decide to hire out your premises to a person or group, consider the following:
Your school's ethos and values
Make sure that any group or person you're letting your premises to is appropriate.
For instance, be cautious when letting to political groups. You don't want to be seen as promoting one group over another.
The same may be true of religious groups (if your school doesn't have a religious designation), unless the event run by such a group is open to the entire community.
One of our associate experts, Martin Owen, gave us this advice.
Do your due diligence
Check that your hirer has appropriate:
- Health and safety training and procedures (including risk assessments)
- Safeguarding checks, policies, and training
- Adult-to-child ratios
- Registration (for instance, external providers' looked after children under age 5 need to be registered with Ofsted)
Read more about who is responsible for safeguarding when hiring out school premises here.
Model premises hire policy
Use and adapt our model premises hire policy to help you set clear, compliant procedures.
Our associate expert, Peter Foale, also helped us write this article.
Peter Foale is an experienced education consultant working with local authorities, schools and their communities, and the private sector on management and strategic planning.
Martin Owen is a qualified Chartered Accountant (CPFA). He has more than 20 years' experience working with academies and schools to improve their governance, leadership and management of financial, business and operational processes.
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