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Government to help housebuilders deliver schools

Words: Laura Edgar
New school / iStock-820923564

The Department of Education has announced that it will hand out loans to housebuilders to deliver schools places before new properties are finished.

Education secretary Gavin Williamson said up to £20 million would be made available to builders for each school.

The loans come as the government tries to increase the number of homes built a year to 300,000 by the mid-2020s.

Williamson said the loans would enable housebuilders to finance schools before completion of the residential element of schemes, instead of having to wait until homes are built and sold to be able to deliver the school.

The loan will be charged at interest and repayable once new homes are sold. It is hoped that the scheme will “incentivise developers” to build more properties in the areas most in need, such as on sites that have stood empty for a long period of time.

Housing minister Esther McVey said: “It’s only right that infrastructure is delivered up front – including thousands of new school places – which supports existing communities and the new homes which we need building.

“I welcome this support being made available today – helping medium and large-sized housebuilders to deliver new schools as they deliver the homes we urgently need.”

Williamson added: “We want to offer parents across the country a good choice of local schools for their children that suits their talents and needs, and we’re already on track to create one million new school places nationwide this decade.

“But we know that in some cases, building schools and properties at the same time so they are ready for new communities can be challenging for housing developers. That’s why we are launching these loans today – to help parents secure a good school place for their child at the same time as moving into a new family home.”

Starting as a pilot, the Developer Loans for Schools programme will initially offer around 10 loans to successful bidders. The Department for Education said all projects would need to demonstrate value for money, affordability, and must meet the eligibility criteria outlined in the prospectus.

David Williams, chairman of the County Councils Network, and leader of Hertfordshire County Council, said: “The government’s recognition that there are issues with meeting demand for school places, particularly as part of new housing developments, is welcome.”

The loan funding will “go some way” to supporting developer cash flows and enable new school provision to be delivered earlier in the life cycle of new large housing developments.

“Whilst we hope that this pilot scheme is successful, the cost of a new two form of entry primary school typically exceeds £8 million and a six form of entry secondary school £30 million. If subsequently rolled out, government should, in the longer term, seek to reform the planning system, alongside streamlining infrastructure funding, if we are to deliver the infrastructure needed to serve the needs of future communities.”

Information on applying for a loan can be found on the UK Government website.

Image credit | iStock