Beaulieu asks States for £7million loan to fund expansion

Tuesday 12 March 2019

Beaulieu Convent School has asked the States for a £7 million loan - to be repaid over 20 years with an annual fixed interest rate of 4.25% - to fund a series of capital projects aimed to increase its capacity.

Works would include the creation of three classrooms in the Jubilee Building, and a new sports centre, as well as the redevelopment of the existing gym and Café Beau to provide an “enhanced” café and a sixth form centre.

The school is also hoping to redo the middle school façade, in a similar fashion to the primary school building. 

Work would take place up to the summer of 2021 to minimise the level of disruption during school term-time. Contractors have already been picked through a tender process and enabling works took place during the second half of 2018. The School is now seeking loan funding for the full project from the Minister for Treasury and Resources.

Pictured: Beaulieu School welcomes students aged three to 19.

The Public Finances law allows the Treasury Minister to lend money in the name of the States, as long as States members approve the loan. Deputy Susie Pinel published a proposition asking her fellow States members to approve the loan yesterday.

In the report accompanying her proposition, the Treasury Minister said that the States have previously lent £500,000 to the school in 2008 and 2014, which should be fully repaid in 2022. It is proposed that the two smaller loans - with outstanding debt now totalling £283,168.29 plus accrued interest – be combined with the £7 million loan.

The new loan, which will have a fixed interest rate of 4.25% per year, would be repaid from the school’s general revenues, which predominantly come from the fees paid by the parents of children attending the school.

The school is planning to increase its fees above the usual inflationary increases, as required until 2030, to support the development and repay the loan.

Pictured: The Treasury Minister, Deputy Susie Pinel, published a proposition asking the States Assembly to approve the £7 million for Beaulieu. 

Deputy Pinel said that, while there is a risk the school might not attract the additional students it expects to to provide the required fees, Beaulieu has confirmed the current registration list for pupils is greater than the capacity which will be created from the development. 

Deputy Pinel explained that Beaulieu approached her in the first instance - rather than seeking finance from a third party - because the school wanted to “maintain its long-term partnership with the States of Jersey to deliver common goals and a common social agenda.”

She said that she personally visited the school and asked the Treasury Advisory Panel (TAP) to review the proposals, which were then recommended for approval.

To provide further protection for the States, the TAP suggested that the Treasury Minister seeks “additional covenants,” such as the provision of annual audited accounts, as well as invoices before the funds are released and annual verification of actual expenses. The school would also be required to notify the States “early” if it starts experiencing financial hardship. 

The TAP also recommended that Beaulieu ‘s Memorandum of Understanding with the States be update to reflect this latest loan, to include the ability for the States to take over the running of the school in certain circumstances including financial difficulties.

Pictured: Beaulieu School, with Jubilee Building circled in red. (Google Maps)

In her report, Deputy Pinel said that helping Beaulieu's expansion would eventually save the States money as its secondary students receive £47% of the cost of being educated in a States’ school, representing £190,800 for 80 students, while pupils in primary receive £22% of the cost, meaning that Beaulieu's 200 primary school places currently save the States around £700,000 annually.

The Treasury Minister also noted that "the States would struggle to accommodate these pupils within existing school capacity in the event that BCS were to have to close as a result of defaulting on the borrowing."

The States will decide whether or not to grant the loan on 30 April.