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Leasing / Rental Arrangements

Information about leasing and purchasing technology - repost in response to the Panorama programme (24th Sept 2012)

Recently there have been a number of key news items referring to missold and overpriced ICT equipment being sold to schools which left them in crippling debt. This new investigation led by the BBC and relayed over their radio, television and internet news channels has highlighted the difficulties in purchasing value for money equipment from reliable and ethical sources.

We would like to remind schools that there are clear guidelines from the LA which aim to support schools so that they can invest in ICT with confidence.

A schools’ commissioning toolkit is provided here:

Please note: A new edition of the toolkit has now been published (30th January 2012).

Further guidance about leasing, the core concern in the investigation, is provided in the School Funding Unit’s Capital Accounting Schools Financial Procedures document:

We recommend that you always check prospective leasing agreements, whether it is for computers, photocopiers or telephone systems or any other equipment, with your Financial Services for Schools (FSS) Adviser.

Schools that have purchased equipment through ICT Services can be assured that all national guidelines are followed by the LA and they are not affected by this report. Please do contact if you have any queries or questions about this issue.

If you lease/ rent your equipment, it will never become the property of the school.The leasing company calculates their charges based on anticipated residual value of the equipment at the end of the lease. The residual value is the price, at which the leasing company hopes to be able to sell-on at the end of the leasing period. (This could be approx 10% of purchase price).  The company providing the money for the lease hopes that you will wish to continue renting the equipment when the lease expires, in which case the rental will be calculated on the estimated residual value. (Note VAT is chargeable through the lease/rental scheme, but can be reclaimed.)