HC Deb 30 March 1995 vol 257 cc716-7W
Mr. McLoughlin

To ask the Secretary of State for Education if she will make a statement on future funding for grant-maintained schools. [17984]

Mrs. Gillian Shephard

I am pleased to announce that the Government propose to introduce legislation amending the Education Act 1993 to allow grant-maintained schools to borrow from sources other than the Funding Agency for Schools. This measure opens the way for increased business investment in schools in accordance with the Government's private finance initiative. Local education authorities can already, within limits, borrow commercially and fund their school capital programmes from a mix of capital receipts, revenue monies and borrowing. GM schools are at present almost entirely dependent on central Government grant.

GM schools have expressed keen interest in the possibility of commercial borrowing. They have demonstrated that they are able to manage their own budgets effectively, and it is right that they should be able to benefit from the flexibility that such legislation will bring. Vital schools assets must of course be protected, and the new arrangements will provide for that.

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