IT equipment in schools: to lease or not to lease?
School copier leasing for schools Access to high-quality IT equipment is not equal in schools. If you’re part of an academy chain, you’re likely to be able to get a good deal and buy what you want. Single schools, meanwhile, are often locked into complex and expensive leasing deals. In the third of her series focusing on technology in schools, Jess Staufenberg looks at the high cost of providing students with the latest digital equipment
As school leaders strive to provide students with the most up-to-date digital equipment, how they purchase it becomes increasingly important.
Schools really only have two options: buy it outright – for all their hundreds of students – or lease it, which means renting over a period of time with payments spread out. The latter typically spreads the cost across three annual payments that amount to more than the original capital cost of the equipment. Schools can also pay a bit more to keep the equipment at the end. Or a bit more again to have it updated and to continue “renting” it.
Leasing arrangements are not always straightforward. Some arrangements hit the national headlines in 2012 when a BBC investigation discovered at least 169 schools had been substantially overcharged for IT equipment and left with debts of up to £1.9 million. Ten headteachers lost their jobs as a consequence.
Large multi-academy chains are able to get flexible pricing
Despite the scandal, and subsequent lobbying for leasing rules to change, the old arrangements continued in most schools though they have two crucial cards up their sleeves. First, they have the cash flow to purchase expensive equipment outright. Second, schools do not lease if they have the leverage to bargain for a good purchase deal. Large, multi-academy chains or federations are increasingly able to get flexible pricing, which makes buying top-quality IT equipment outright possible. Single schools, however, are “forced” to lease.
There’s a second hurdle for small schools. Only “operating leases” are legally available. The alternative, a “finance lease”, which experts say is better value, is forbidden by the Department for Education.
Daniel Moynihan, chief executive of the Harris Federation, which runs 37 academies across London, said he would never consider leasing. Partly because of the BBC “horror stories”; partly because he doesn’t need to.
“We have never leased. One of the things about being a group of schools is you can drive economies of scale. We are able to aggregate PC orders and usually get a better price.”
The federation also has nine accountants looking after three schools each, says Sir Daniel. It is an arrangement that saves money on a single professional attached to each individual school. “The schools are getting high quality financial management, but they’re also saving the cost of a bursar – they’re saving tens of thousands of pounds.”
With this kind of driving for deals, with ideological support from government and financial backing from private sponsors, large multi-academy chains are the successful players in obtaining IT equipment at good value and having the peace of mind of owning it.
Leasing for single schools, meanwhile, may be cheaper in the short run but more expensive in the long term with an extra charge for the benefit of staggering rent payments. But there is the advantage of easily upgrading to the latest model.
This advantage is overplayed, says Sir Daniel: “We’ve never encountered a leasing deal where they’ve said, we’ll update your PC. You have to take out a new lease to get the update.”
The British Educational Suppliers Association (BESA) agrees. Director general Caroline Wright says leases used by schools are typically complex and pricey. For example, damaged laptops could be charged for at the end of the lease term but sometimes a clause says they have to be returned in the original packaging.
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