Penrith’s Queen Elizabeth Grammar School is in a long-running financial wrangle over the repayment of £1.5 million to a wing of the Department for Education, it has been revealed.
Queen Elizabeth Grammar School was awarded a total of £2.6 million of capital funding by the Education Skills Funding Agency (ESFA) for different improvement projects at the Ullswater Road site dating back to the last decade.
The grants, from the ESFA’s Condition Improvement Fund (CIF), went towards projects such as boilers and heating systems, windows and roofing, and the replacement of outdated mobile classrooms, the school said.
But after an “investigation,” the ESFA is maintaining the school now has a “repayment liability” totalling £1.5 million which QEGS strongly disputes. This remains subject to negotiations.
ESFA funding rules state that “using the funding for any work other than what has been specifically approved as part of the original application, may result in some or all of the funding having to be repaid”.
However, it has not been made public under what grounds the cash claw-back is being sought, and there is no suggestion of any wrongdoing.
The ESFA has told the school that the £1.5m liability consists of £313,823 which needs to be repaid from a £1.4m grants bid in 2017-18. A further £1.18m is required back from a £1.2m grants bid in 2017-18.
Of the latter, the ESFA classified the “full project as ineligible” for the whole grant, according to a report from school trustees. It involved replacing defective timber mobile classrooms dating to the 1950s.
After a wrangle dating back to 2019, the academy trust running the school has formally recognised the liability in annual accounts and regards it as a financial risk and an uncertainty.
But parents have effectively been told that even with a potential seven-figure debt casting a shadow over its status as a “going concern”, its accounts would still be in the black.
Latest accounts up to August, 2021, show its board of trustees believe despite the issue it has “adequate resources to continue in operational existence for the foreseeable future”. Further, they indicate that if the repayment argument is lost, it would have sufficient funds to meet the liabilities if “reasonable repayment terms” can be agreed with the ESFA.
In a statement, the school said the issue would not distract staff or their focus on pupils and that efforts were continuing to resolve the situation with the ESFA, which was approached for a comment.
“Complex discussions” with the ESFA are ongoing, having been derailed by the pandemic.
The school said in a statement: “Throughout these discussions, the governors and its senior leadership team have acted to diligently maintain the quality of education at the school, liaising with the ESFA and avoiding unnecessary distractions for the school’s dedicated staff, allowing them to focus fully on the children’s needs.
“QEGS has the full support of West Lakes Multi-Academy Trust (WLMAT), with whom it is in ongoing discussions about potentially forming a forward-looking, collaborative partnership that would further improve the educational outcomes of the communities served by both schools. QEGS remains committed to achieving a resolution that puts the education of the children first.”
Last October, the school reported it had a pupil capacity of 840 and a roll of 999.
A parent told the Herald: “I was alarmed to read the letter, as I had no idea about this issue and it is such a large amount of money. That such an issue could have arisen in the first place is a worry in itself.
“The assurances that this will not impact the children’s education had the opposite effect and leave me concerned that repaying this money will mean cuts. Like many parents, I make a donation to school funds. Will we be asked to give more in the future to help repay this debt?”
