No details on academies' CIF loans until process complete

The 2015/16 Condition Improvement Fund (CIF) grants were announced in March but there have yet to be any announcements on the level of interest shown by academies in the new loan element. 

In response to a Freedom of Information request the EFA said: ‘We are anxious that colleges be confident that they can afford the repayments and do not feel under undue pressure to take a loan. It is likely that should the negotiation be open to the public at this point in time, there could be direct influence placed on the school leading to hasty decisions being made.’

The details of one CIF loan have been reported in the Burton Mail (April 1 2015) - the de Ferrers academy was awarded a £350,000 grant and a £500,000 loan as part of the 2015/16 Condition Improvement Fund. 

Funding reduction?
The total amount of CIF grant awarded for 2015/15 is £367 million. That is less than last years' £393 million ACMF, which the CIF replaces and it is the first reduction since at least 2010/11.

2010/11 - £85m
2011/12 - £299m 
2013/14 - £393m
2014/15 - £367m

However the inclusion of the loans may increase it to match last year's level. 

The 2015 Kreston Reeves benchmarking report said: 'Time will tell what proportion of approved projects include loan funding, what percentage of overall spend is typically financed, and whether this new system means that the overall spending on education will be reduced.'

It added that loan financing will 'put pressure on the academy's core funding as the repayments will almost certainly be met out of GAG income and, as Lord Nash said, this funding will be flat. Consequently, there will be less money available to spend on academies' educational purposes.'

The report said: 'The ability of academies to borrow, albeit only from EFA and Salix Finance (for heating systems), is a significant change of direction, and not one that has received any significant press attention. It will be interesting to see if this is a precursor to academies being able to borrow from banks in the future.'

EFA comment

The EFA said, while it holds the information requested about CIF loans, it is being withheld because ‘it is intending to make public the loan amounts once academies and sixth form colleges have accepted terms and conditions and all contract negotiations are complete.’
It added this explanation for not disclosing more information: ‘In respect of this request we have given consideration to the public interest of disclosure and we feel that, on balance, release would be prejudicial in three key respects:


'In looking at the public interest in favour of disclosure, we gave consideration to the question of how much the public would benefit from the immediate release of this information, particularly around the issue of effective use of public funds.  However this argument had to be placed alongside any potential negative impact that would be caused by releasing the information at this stage. It is the view of the Department that at present, whilst negotiations are still proceeding and before any contacts have been signed, disclosure of the loan amounts could have a detrimental effect on the process.
'Although Academies and sixth-form colleges can take out a loan for all or part of the project costs in their CIF proposal to demonstrate their commitment to the scheme; we are anxious that colleges be confident that they can afford the repayments and do not feel under undue pressure to take a loan. It is likely that should the negotiation be open to the public at this point in time, there could be direct influence placed on the school leading to hasty decisions being made.... As mentioned, we intend to make the information available once the process is complete.'

The EFA said it had received requests for more than £1.6 billion of funding for over 3,500 projects at over 2,200 academies and sixth-form colleges.  The statement said: ‘Following the prioritisation process, we have announced £367million for 1,366 projects at 1,089 academies and sixth-form colleges.’ 

‘We recognise that the more information the public holds about financial transactions, the greater the confidence there is any decisions made. For this reason, we are committed to openness in our approach and transparency in our arrangements.

The conditions for the loans have been set out by the DfE (page 19) which lists the financial tests the DfE sets for academy's such as loan repayments cannot exceed 4 per cent of an academy's total annual revenue income. (list of grants awarded) - (de Ferrers accounts)