DfE pilots building loans to boost new school spaces

2019-10-22

Housing developers are to be given financial incentives to build new school sites in new housing developments, as part of a pilot from the Department for Education.


Up to £22 million will be offered as part of the scheme, designed to ensure that there are enough school places to meet a projected rise in demand in the years ahead.


Low-interest Developer Loans for Schools – offering between £5 million and £22 million – will be available for an estimated ten projects, allowing for free schools to be built upfront as part of mixed-use developments.


The plan will mean that developers do not need to wait to raise the cash from new-build property sales before they embark on the development of new schools.


Instead, the loans will be repayable at a later date, once the new homes are sold.


The move recognises the need for new schooling, but also the potential cash flow issues that can limit small and medium-sized developments.


Education secretary Gavin Williamson said trying to be build schools and housing simultaneously can be “challenging” for developers, but that the loans should provide a greater choice of school places for parents.


The pilot is set to run until 2021 and will include areas that meet a very stringent list of criteria, including regions with:

  • Known demand for more good quality school places
  • An approved application for a new free school
  • Planning permission for the development of new homes
  • A project deemed value for money
  • A UK registered developer with ownership over the land


The government has also suggested that developers will receive support with planning mixed-use developments if they are chosen to be involved.


Rising demand for school places, especially at secondary level, also means greater demand for teachers and other school staff.


According to government forecasts, an additional 418,000 secondary school pupils will need places in schools by 2027.


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