This paper is written to provide information on Church of England School land in the Diocese of Lichfield and use of that land by an academy. It is important that schools understand the basis on which Church school land is used and the academy’s responsibilities to the private land owner.
Background on Voluntary Schools
Each Voluntary school (aided and controlled) usually comprises of two charities that work interdependently.
Firstly, the governing body, which runs the school and secondly, the charity often called the foundation, which holds the land and buildings. The foundation trustees hold the property for the charity’s purposes. The purposes will be religious and educational.
The first charity, (the governing body), falls away at academy conversion. The second continues. This paper deals with the relationship between the Academy trust and the foundation and particularly the foundation trustees. Where the paper refers to site trustees this is the same as the foundation trustees. These are not to be confused with the trustees of the AT company.
Academy use of the foundation trustees’ land
This will be by way of the Church Supplemental Agreement (CSA) between the Secretary of State, the site trustee, the Diocesan Authority and the Academy Company. The CSA template is available at www.gov.uk/government/publications/church-academies-model-documents
8a) The academy company agrees to maintain the religious character
8b) The Secretary of State (SoS) agrees funding to the academy company in accordance with a Funding Agreement.
8b) The trustees undertake to the SoS to make the trust land available for use by the academy company
12) The desire of all parties is to foster high quality education
14) The academy company meets the cost of repair, maintenance and insurance.
14a) The trustees are to facilitate upkeep
14a) The academy company is to make good damage or deterioration to condition
14bi) At the academy company’s expense to maintain insurance in joint name with trustee.
14biv) The academy company on reasonable request to provide evidence of the insurance policy
18a) The SoS acknowledges the right of the trustees to consent to works on the land.
18b) The SoS acknowledges the trustee interest in ensuring works are carried out properly
24) The trustee may give not less than two years notice to the SoS to terminate the agreement
Use of the foundation trustee land by others
Through the CSA the foundation trustee agrees to the SoS to make their land available for use by the Academy Company. Should parties other than the academy company wish to use the land, consent of the foundation trustee is required. For the sake of clarity, other parties, will include trading and separate companies set up by the AT, as well as pre-schools, out of hours clubs, solar panels and the like.
Use of land by others will be through a Licence Agreement between the AT, the foundation trustee and the third party. The AT solicitors will prepare the Licence Agreement in consultation with the foundation trustees’ solicitor. The AT will meet the foundation trustee solicitor costs. Income from third party use is to the foundation charity. The foundation trustees may agree this is paid directly to the school. Where the school is part of an academy chain, the income from third party use is to be restricted to the foundation trustees’ school and is to be additional income.
Occasional lettings are determined by the AT. Income is to be restricted to the foundation trustees’ school and is to be additional income.
If there is a need for easements ( e.g. to a utility supplier), only the foundation trustees can grant these. We require the beneficiary of the easement or the AT to pay the foundation trustees costs in grant of easement.
The foundation trustees use the option in the CSA for the Academy Trust to insure. The requirement is for the AT to hold buildings insurance in joint names with the foundation trustee. The foundation trustee will require annual evidence that the trust’s land is adequately insured. The policy should be in the name of ‘the x Academy Trust and y, as site trustee’.
Use of the Church School version of the Risk Protection Arrangement (RPA) is an accepted alternative. The annual renewal document will be required. The current version of the CSA makes no allowance for the RPA. Until this is revised, schools using the RPA will need to enter a side letter with the foundation trustee which is available from the Diocesan Property Adviser.
The PFI agreement in Stoke provides insurance to all schools in the local authority area both maintained schools and academies. Documentary evidence of the insurance will be required. The PFI insurance does not cover building works undertaken outside the agreement i.e. an extension procured directly by an academy. In this instance evidence of insurance cover will be required.
Deterioration to condition
The AT has an implicit duty to its pupils and staff to provide suitable accommodation for teaching and learning. The AT has an explicit duty to the foundation trustees to make good damage or deterioration to the condition. The foundation trustees will look for evidence that these duties are being fulfilled. Evidence could be in the form of a condition survey and associated property strategy to address condition items.
The foundation trustees may issue a Property Notice to address damage or deterioration to the foundation’s land and buildings.
Foundation Trustee consent to works
The AT is to apply to the Schools Estates Officer at the Lichfield Diocesan Board of Education, St Mary’s House, The Close, Lichfield, Staffs WS13 7LD for consent to extend, alter and repair of the charity’s property. See the attached form. Works below the value of £10,000 are regard as de minimis and have automatic consent.
The local authority may request the academy to provide additional pupil places and the AT may be minded to agree. Where this involves building works commissioned by the LA and for which they are the party entering into the building contract, full details of the build proposals will be required for approval and the provision of collateral warranties in favour of the AT and trustee will be required. The trustee will require a Memorandum of Understanding (MOU) is entered into at the outset of a project and an Agreement before building contract is signed to grant access rights for the LA and its contractor, and to give undertakings to the AT and trustee. There should be an early discussion with the Property Adviser to avoid delay later in the project.
A copy of the AT annual Report should include a statement on the condition of the premises and alterations and repairs that have been undertaken in the 12 months and submitted to the foundation trustee via the Property Adviser for the Diocesan Board of Education.
Valuing the trust land in the AT accounts
The EFA guidance on valuing foundation trustee land is opaque. How the foundation trustees’ land is valued is a decision of the directors of the AT, not the decision of the auditors. The directors give direction to their auditors. The directors should avoid pressure from auditors or the EFA to value trustee land in anything other than at notional value. Detailed explanation of this in relation to the EFA guidance can be found in ‘The Accounting Treatment of Land and Buildings Occupied by Church Academies – Guidance for Academy Trust Companies’.
Trustees also object to the valuing of their assets in the EFA accounts and request that the Land and Buildings online information asked for by the EFA following conversion is not completed.