The Finance & Leasing Association (FLA)
has countered a BBC investigation which suggested the mis-selling
of leases to UK schools was a nationwide problem costing taxpayers
millions of pounds.
While the FLA said it takes the issue of lease
mis-selling very seriously, it suggested the BBC 5 Live
Investigates programme exaggerated the extent of the
problem.
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Julian Rose, head of asset finance at the FLA
said the issue highlighted by the radio programme, which aired
Sunday 8 January, was not as widespread as the investigation
implied.
“Thousands of schools use leasing successfully
each year and we believe the number of schools encountering serious
problems with their lease agreements is actually very small – a
tiny fraction of the UK’s 24,000 schools,” he said.
“As the programme demonstrated, leasing can be
a valuable tool for schools when used with proper care.”
The programme, presented by Adrian Goldberg,
highlighted the case of Glemsford Primary in Suffolk, which was
sold a lease deal for 100 laptop computers by a company called
Direct Technology Solutions (DTS).
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By GlobalDataJames Loker-Steele, who is in charge of the
school’s IT procurement, told the programme the school was told by
DTS the laptops would be free as part of a promotion but when the
company went into administration the school was liable for
£500,000, well in excess of the worth of the computers, to
Clydesdale & Yorkshire Bank who had funded the deal.
In a statement to the BBC Clydesdale &
Yorkshire said: “We can confirm that we have financed the purchase
of equipment for a small number of local authority schools through
a third party.
“We have acted in good faith and have had no
involvement with the supply of the equipment itself, nor have we
had any financial relationship with Direct Technology Solutions
Ltd, who had been selected by the schools as their preferred
supplier.”
Loker-Steele said the money owed was the
equivalent of the school’s entire annual budget.
While both Goldberg, contributors and
interviewees on the programme said there is nothing wrong in
principle with leasing deals for schools, the programme concluded
the experience of Glemsford was widespread and the issue of
mis-selling was described as “nationwide” and “a huge problem”
which involved a “significant proportion of leases.”
The 50-minute programme did not include
perspective from the leasing industry.
In response to the investigation’s findings
Julian Rose continued: “We take the issues raised very seriously,
and the FLA has taken practical action in three main areas relevant
to leasing in schools.”
Rose highlighted the guidance the FLA has
issued through its Technology and Business Equipment Group and its
fraud intelligence system which allows its members to share
information on suspected fraudulent parties.
The Radio 5 Live programme said one potential
reason behind the mis-selling of leases to schools was the lack of
business acumen from head teachers and other procurement
decision-makers.
Rose said the FLA is keen to help schools make
better procurement decisions and recently distributed specific
guidance for schools in conjunction with the Department for
Education (DfE) and the National Association of School Business
Managers.
He added the FLA is working with the DfE to
discuss ways of further protecting schools from problems which may
arise in dealing with equipment procurement.
He said: “We believe a lot can be done to help
schools to avoid problems like those mentioned in programme, and we
will put whatever resource is needed into working with the DfE to
achieve this.”
grant.collinson@vrlfinancialnews.com
