Is Leasing A Viable Option For School Equipment?

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Although previous Prime Minister David Cameron pledged two years ago not to cut per pupil funding, the fact that its increase has been pegged below inflation means that, in real terms, schools are losing out. Coupled with efforts to reform the labyrinthine school funding formula, the reality is that thousands of schools are staring down huge budget cuts in the next five years.

This comes at a time when schools are arguably under greater pressure than ever to invest in resources to support education. In the past, capital expenditure in schools amounted to replacing tables and chairs when necessary, purchasing new sports and playground equipment, and keeping a good stock of books, stationery and general educational resources.

Nowadays, however, there is another significant addition to school spending - ICT equipment. Gone are the days where a single computer suite was enough to serve a whole school. To keep up with the times, schools are under pressure to make digital resources - laptops, netbooks, tablets and more - available in every classroom, for every pupil even, to ensure learning fits the demands of the 21st Century.

Interactive whiteboards, high speed WiFi networks, school-wide pupil databases, digital learning platforms and electronic entry systems to support safeguarding have all become the norm. All are wonderful innovations in education delivery, but all come with a cost. Do you need to own it?

 

Traditionally, it has been an unwritten rule that schools should purchase their own equipment outright. In spending public money, school leaders were expected to have concrete assets to show for it, even if there was never any realistic likelihood that schools would ever recoup costs by selling unwanted equipment.

In the current climate, with purse strings tightened while demand to provide ICT resources increases, surely that old-fashioned idea has to be put to bed once and for all.

In business and industry, asset finance has long been used to help stretch tight budgets that much further, and make sure necessary capital investments in equipment can be made even when ready cash is scarce. Leasing arrangements have had a significant role to play, and represent a viable option for schools looking for ways to give students the very best resources on a limited budget.

There are two main leasing arrangements available through asset finance providers school budget holders should be aware of:

 

     Operational lease: This is leasing in the sense most people understand the term. The finance provider purchases the asset and leases it to the school for a fixed period, on fixed payment terms.

     Finance lease: This works in the same way as an operational lease, except the school has the option to buy the equipment at the end of the lease term by paying of the remaining balance. Alternatively, they can ask to extend the lease, or simply choose to return the equipment.

The key here is that a lot of ICT equipment in schools may only have a limited shelf-life. How many times have schools invested in a new piece of kit, only to find it gets superceded by something else after a year or two, and then just sits in a cupboard going dusty? Leasing protects you from that risk, and if you want to hedge your bets, a finance lease keeps all options open.

People will point to the fact that finance arrangements add interest to the cost of equipment. But this is balanced against having the cost spread out over a long term. If you do not have the capital ready to invest in equipment which would improve the educational experience of your pupils, finance empowers you access it anyway, and pay for it within the constraints of your budget. Find out more

Peregrine Leasing is one of the UK’s leading providers of asset finance, with more than 25 years’ experience in education. Visit www.peregrineleasing.co.uk to find out more.

     
   
   
 
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