Light gradually dawns: due dilligence

Recently there has  been a reported a spike in inquiries from both local authority schools and existing academies seeking technical due diligence services.
There is increasing evidence that schools and trusts are becoming far more savvy to the hidden liabilities that accompany the asset during the transfer of the built estate.

Given the number of ‘orphan schools’, those academies for whom no sponsor can be found, it is vital all parties appreciate the risks, along with the rewards, when transferring and re-brokering.

When purchasing a house, how many of us would rely on the vendor’s survey?
It is imperative that in this very fluid market, schools and trusts commission their own survey and assess the risks and liabilities before making the final decision.

Whilst some of the liabilities can be offset via the DfE’s annual round of Condition Improvement Fund, this funding stream is over subscribed by four times and academy schools still require visibility of their short, medium and long term risks.

For those larger Multi Academy Trusts who are not eligible for CIF and whom are in receipt of formulaic funding via the School Condition Allowance, ensuring their budgets and inward investment plans secure optimal return are essential to their financial health.

Whilst there is ever growing pressure on MAT’s to increase in size, achieve higher revenue via pupil numbers and seek to maximise opportunities through economies of scale, they must also take in to consideration, the extent of the risks and liabilities they are transferring and the potential impact on the trust’s existing estate.

I have co-designed in partnership with the Collegiate Academy Trust, a survey template for the collection and analysis of both compliance and condition data, that provides the trust with sufficient information on key building fabric and components to cite costed evidence as to future liabilities.
This evidence provides the Trust and its representatives, a strong hand when negotiating with Local Authorities, Regional School Commissioners and the DfE itself.
Whilst the identified liabilities cannot be wished away, it is at least possible to appraise the client and quantify them with costs, so that they can begin to plan and budget accordingly. Reactive and unplanned costs are far more expensive than those which have been identified and prudently procured in advance.

One of the additional benefits of commissioning my bespoke condition survey model is that it is scaleable. The data collected and costed during the due diligence process can efficiently be imported into the trust’s existing database and the impact of the joining schools liabilities automatically calculated. It is this added value that is attracting clients to this very model.

I have always sought long term relationships with clients and aim to offer them services throughout their development; from the original transfer into the academy sector, through funding opportunities and best practice estate management and strategic procurement pathways.

Any schools considering converting, joining or merging and who feel they would benefit from a consultation please feel free to contact me.

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