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Fee increases and levies, selling the Sports Hall, "arguing" with Government, and even naming a building after a donor were all options considered by Beaulieu in an attempt to "steady the ship" before securing a £2.5m Government-backed overdraft, it has emerged.
Express took a look at the disaster-planning to get the school back on track and ensure it cannot be taken over by CYPES.
Financial documents obtained by Express after queries dating back more than a year have shown how the longstanding Roman Catholic institution recorded a loss of more than £379,000 in 2022, and had forecast a loss of £1.2m for 2023.
Pictured: Beaulieu's 2022 financial statements were published last week after repeated queries from Express.
This culminated in the Government stepping in to guarantee a £2.5 million overdraft and take on the lease for its building.
But what other options did the school consider before this point?
An internal ‘Finance Update’ document published in June 2023 warned: “Without funding the school will become insolvent in the autumn – debt or grant money MUST be raised.”
It described the school's IT systems as "terrible", and noted that its marketing department is functioning at a "cost not a profit".
It continued: "Money is being spent on a 'what we have to do' and not 'what has been funded' [basis]."
The document also considered three potential courses of action for the school going forward: getting money from government, lenders, or parent/alumni.
"Assuming the trustees do not want to hand control of the school to CYPES, the analysis put forward the following potential options from three potential sources," the document said.
The school outlined four potential ways to draw upon further Government support.
The first was to "argue" with Government about the Model School funding formula, Special Education Needs, and Property Holdings budget.
Express revealed yesterday that Beaulieu deemed the provided by the States of Jersey Education Department to private schools as "not fit for purpose".
The school claimed that that the "upkeep of the buildings too high and not included" in the grant, and that staffing is "misaligned".
Beaulieu also criticised the "paltry" 1.8% allocation increase from 2022 to 2023, in comparison to the 7.9% increase in teachers' pay.
Pictured: Beaulieu received a Government grant of over £2.3m in both 2022 and 2023.
The "pro" of "arguing" with Government about the grant, according to the school, is that "this would be grant money and not repayable".
However, the "con" is that Beaulieu "may not win the argument... and could lose a lot of time and money making it".
Following queries from Express, the Education Minister yesterday confirmed that the funding formula is currently "under review".
Deputy Rob Ward said: “To ensure that it continues to reflect the needs of the Government, the [Education] Department and the school, the funding formula for fee-charging schools is under review.”
In 2019, Beaulieu received a £7.3million from the Government to build new classrooms, a sports centre, cafe and sixth form centre.
The loan came with the condition that the money has to be repaid within 20 years, at a fixed interest rate of 4.25%.
The ‘Finance Update’ document noted that repayments on the Sports Hall can be delayed until next year, but the "problem won't go away".
The document proposed avoiding capital repayments on the loan until after retentions are due.
It explains that this would "give time to sort things" before the 2039 loan repayment date.
Beaulieu also noted that inflation is "actually much higher" than 4.25% so the cost of the debt is "actually reducing".
Pictured: Beaulieu School's new sports complex Beau Sports & Activities Centre was opened last year.
However, the school acknowledged that this "only defers the problem" and the "total cost of the Sports Hall will increase as the debt is not reducing".
The school also explored the possibility of selling and leasing back the Sports Hall.
It noted that this would free up capital, but acknowledged that this may not be achievable and would result in the school losing control of the hall – which Beaulieu currently rents out to community groups.
Beaulieu also considered mortgaging its building, noting that this could only be done if the Government was willing to guarantee paying out the bank on default.
This would "release significant cash flow to steady the ship", according to the school.
However, Beaulieu acknowledged that it was unsure if long-term repayments would be affordable.
The second course of action considered by Beaulieu was borrowing money from lenders, including the bank.
The school considered – and ultimately decided to – increase its overdraft.
The consideration process of this decision noted that an increased overdraft would be a "short-term solution to a long-term problem".
Beaulieu also considered using asset finance to fit out its Sports Hall.
Asset finance is a type of borrowing which allows businesses to purchase new equipment or expand current operations without paying an initial large sum outright.
Companies instead borrow money to buy the asset, and the loan is paid back over time with interest.
The school explained that this would be beneficial in having "extra cash coming in" and making equipment "affordable".
However, Beaulieu concluded that the interest change on asset finance would likely be higher than a mortgage on the building.
Beaulieu also considered increasing fees or introducing a levy – noting that each 1% fee increase generates £65,000 of extra profit for the school.
However, the institution acknowledged that parents may remove children from the school if the offering was not worthy of a fee increase, causing further cash flow problems.
The convent school also considered changing to a truly independent schools, which it said would allow higher fees, offer a better provision, be more sustainable, and allow the school to "pay back all the loans".
However, Beaulieu said that this would be a "risk" – noting that the school does not have enough capital to do so.
The school also considered seeking donations "in whatever form".
Beaulieu questioned whether it would be possible to "name one of the buildings after someone", but admitted that it had "no idea how to start with this".
INSIGHT: “Falling apart”… The bid to rebuild Beaulieu and its finances
TIMELINE: A tumultuous two years for Beaulieu
INSIGHT: The "increasingly worse" spending that left Beaulieu on the brink
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