EDUCATION, ENGLAND AND WALES Citation and commencement 1 These Regulations may be cited as the Education (Grants to Aided and Special Agreement Schools) Regulations 1998 and shall come into force on 1st July 1998. Interpretation 2 1 In these Regulations— “ the Act ” means the Education Act 1996; “associated school property” has the meaning given by regulation 4 below; “eligible expenditure” means qualifying expenditure in respect of which the Secretary of State determines that a grant should be made in any particular case; “market value” in relation to property means the value which that property might reasonably be expected to fetch on a sale in the open market as determined by the district valuer (within the meaning of section 622 of the Housing Act 1985 ); “net proceeds of disposal” means the proceeds of disposal of associated school property (other than disposal by way of the grant of a lease) less— the incidental costs of making the disposal; any expenditure incurred with the prior approval of the Secretary of State— on making or keeping the property safe or secure until disposal, which is necessary to effect a disposal, other than the incidental costs of making the disposal, or on the payment of the premiums on any policy of insurance relating to the property; and any payments made to the local education authority pursuant to a determination by the Secretary of State under section 60(4) or 62(2) of the Act; “relevant school” in the context of the making of a grant means the school or proposed school in respect of which the grant is made. 2 For the purposes of the definition of “net proceeds of disposal” in paragraph (1) above the incidental costs of making the disposal shall consist of expenditure wholly and exclusively incurred for the purposes of the disposal being fees, commission or remuneration paid for the professional services of any surveyor, valuer, auctioneer, accountant, agent or legal adviser and the costs of transfer or conveyance together with costs of advertising to find a buyer. Amount of grant 3 1 Subject to regulations 5 and 6, where grant is made in respect of qualifying expenditure of any of the classes or descriptions specified in paragraph (2) below the grant shall be 85% of ( A - B ) where— A is eligible expenditure; and B is, in a case where associated school property is disposed of by way of sale (having not been previously disposed of by way of lease), the net proceeds of disposal of such property to the extent that such proceeds have become or are expected to become available to the governing body or to the trustees of the relevant school; in a case where associated school property is disposed of by way of lease and the rent of such property has become or is expected to become available to the governing body or to the trustees of the relevant school, the market value of such property. 2 The classes or description of qualifying expenditure referred to in paragraph (1) above are— a expenditure in respect of the provision of buildings for a school which has transferred to a new site under the authority of an order made under section 47 of the Act; b expenditure in respect of the provision of a site and buildings for a school established pursuant to proposals approved by the Secretary of State under section 43 of the Act (whether or not an order has also been made under section 46(2) of the Act); c expenditure in respect of the provision of a site and buildings for a school which has transferred to a new site pursuant to proposals approved by the Secretary of State under section 43 of the Act; d expenditure in respect of the provision of a site or buildings consequent on the making of a significant change in the character of a school pursuant to proposals approved by the Secretary of State under section 43 of the Act; e expenditure in respect of the provision of a site and buildings necessary for a significant enlargement of the premises of the school pursuant to proposals approved by the Secretary of State under section 43 of the Act; f expenditure in respect of alterations to the premises of the school. 3 In paragraph (1) above references to the proceeds of disposal or to rent becoming available to the trustees of the relevant school include cases where such proceeds or rent becomes available to the trustees by virtue of an order under section 554 of the Act. Meaning of associated school property 4 For the purposes of these Regulations associated school property is property other than a teacher’s dwelling house which was used for the purposes of or in connection with the school but in consequence of the establishment, transfer to a new site, significant change of character, significant enlargement of premises or alteration of the premises of the relevant school, is no longer so used. Mixed trusts etc. 5 1 Where the associated school property was held by a charity established for charitable purposes which are partly educational purposes and partly other purposes the value of B for the purpose of regulation 3 above shall be the proportion of the net proceeds of disposal of the associated school property or, as the case may be, its market value that is determined by the Secretary of State to be attributable to the educational purposes of the charity. 2 Where— a the Secretary of State has made an order under section 554 of the Act relating to an endowment the assets of which are or include the associated school property or its proceeds of disposal; and b such an order makes provision for the application of part of such assets towards a religious education fund, the value of B in regulation 3 above shall be reduced by the value of the assets constituting the religious education fund, valued at the date of the establishment of that fund, or, where associated school property is disposed of by way of sale and the fund was established before the date of the sale, at the date of completion of the sale. Supplementary 6 1 Where at the time a grant is made it appears to the Secretary of State that there is associated school property in relation to the relevant school which has not at the time of making the grant been disposed of, grant shall be made either— a in accordance with regulation 3, but taking B in the formula in that regulation as the market value of the property; or b (if the Secretary of State so determines) in accordance with regulation 3, but taking B in the formula in that regulation as zero. 2 Where paragraph (1) applies and grant was paid in accordance with paragraph (1)(a) the grant shall be made subject to a requirement that— a if and when the associated school property is disposed of by way of sale (having not been previously disposed of by way of lease); and b if the net proceeds of disposal are greater than the market value which was taken into account in determining the grant, the governing body repay to the Secretary of State the difference between the grant paid and the grant which would have been paid if the grant had been paid after the property had been disposed of. 3 Where paragraph (1) applies and grant was paid in accordance with paragraph (1)(b) the grant shall be subject to a requirement that if and when the associated school property is disposed of by way of sale the governing body repay to the Secretary of State the difference between the grant paid and the grant which would have been paid if the grant had been paid after the property had been disposed of. 4 Where— a grant was paid in accordance with the provisions of paragraph (1)(a), b the associated property is disposed of by way of sale (having not been previously disposed of by way of lease), and c the net proceeds of disposal are less than the market value which was taken into account in determining the grant, the grant shall be re-determined after the completion of the sale in accordance with regulation 3 and further payment of grant accordingly made by the Secretary of State to the governing body. Stephen Byers Minister of State, Department for Education and Employment 11th May 1998 Peter Hain Parliamentary Under Secretary of State, Welsh Office 13th May 1998