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A "small fortune" spent on employment terminations and IT, rocketing maintenance and "entertainment" costs and a Government grant deemed "not fit for purpose" all contributed to Beaulieu being left on the financial brink last year with forecast losses of £1.2m, Express can reveal today.
Made public for the first time by Express last week, financial documents showed that the convent school recorded a loss of more than £379,000 in 2022, and was on course to become insolvent by the end of 2023.
It also emerged that the situation had become so difficult that the Government had to step in to guarantee a £2.5 million overdraft and take on the lease for its building.
Pictured: Beaulieu's 2022 financial statements were published last week after repeated queries from Express.
But how did the longstanding Roman Catholic institution get to 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 notes that its marketing department is functioning at a "cost not a profit".
"Money is being spent on a 'what we have to do' and not 'what has been funded' [basis]," according to the document.
The update also broke down the increase in costs for different areas from 2021 to 2022.
Pictured: An internal ‘Finance Update’ document published in June 2023 showed a significant increase in costs from 2021 to 2022.
Some of the most significant increases were in 'courses and travel' and 'entertainment' which rose by 137% and 94% in 2022 respectively.
But the most dramatic increase by far was in 'legal and professional' expenses, which rose from £36,815 in 2021 to £179,390 in 2022 – a whopping 387% rise.
The 'Finance Update' predicted a further increase in the cost of legal fees, forecasting a £200,000 spend in 2023.
It also forecast that £300,000 was due to be spent in 2023 on "employment termination, including advice".
The document states that spending has got "increasingly worse" in recent times due to "sorting out the problems the school was left with".
It states that data protection, corporate governance, employment termination, and IT Systems have cost Beaulieu a "small fortune".
Beaulieu describes capital repayments on its Sports Hall as "unaffordable".
The school received a £1.5m grant from the government's post-pandemic recovery Fiscal Stimulus Fund towards the cost of the build.
Pictured: Beaulieu School's new sports complex Beau Sports & Activities Centre was opened last year.
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 notes that repayments on the Sports Hall can be delayed until next year, but the "problem won't go away".
Beaulieu also criticises the Model School AWPU Grant – which is money provided by the States of Jersey Education Department to private schools.
The amount provided is calculated each year as it is dependent on the number of pupils within the school on 15 January each year.
The grant provided to private schools is calculated at 47% and 22% of the Age Weighted Pupil Unit (AWPU) multiplied by the number of pupils for secondary and primary schools respectively, plus a fixed element to cover school overhead costs.
The AWPU is the main variable element of funding and covers costs of leadership, teaching, special needs, support staff, resources, support services, and the costs of running and maintaining the premises.
According to the Government, the amount given to schools is a grant to support the operation of the schools in delivering the Jersey Curriculum to its students.
It is up to the individual schools to decide how the money is distributed, but the private schools that receive a grant are required to provide their audited accounts each year.
Pictured: Beaulieu received a Government grant of over £2.3m in both 2022 and 2023.
According to the States of Jersey Group 2023 Annual Report and Accounts, Beaulieu received a Government grant of over £2.3m in both 2022 and 2023.
However, Beaulieu argues that this grant is "not fit for purpose".
The school claims that that the "upkeep of the buildings too high and not included" in the grant, and also claims that staffing is "misaligned".
It criticises the "paltry" 1.8% allocation increase from 2022 to 2023, in comparison to the 7.9% increase in teachers' pay.
The school also notes that "assumptions were made around income were reasonable but so far have not turned out to be true".
Beaulieu explains that it was assumed that the Government would increase grant income by 7.9% for the teachers' pay increase – but this turned out not to be the case.
The document states: "All this leaves the school in a precarious position with the requirement for an extended overdraft facility immediate and lots of negotiation to be done with Government around the Model School calculations and the overall level of support."
Express has contacted the Education Minster for comment about Beaulieu's concerns regarding the Government grant.
Whilst the school's 'repairs and maintenance' costs only rose by 40% from 2021 and 2022, the rise still accounted for an extra £166,417 – bringing the total spend to over £580,000 last year.
The Finance Update notes that there is "insufficient revenue to meet the needs to ageing premises" – and predicted that over £450,000 would need to be spent on 'repairs and maintenance' in 2023.
The document explains: "Building maintenance costs were huge in prior years but assumed to be reducing to some degree and whilst they have reduced it's only because spending continues with things only done on a "needs must" basis but so many things are just falling apart and costs are higher than previously anticipated."
The 2022 financial statements also declared building work as a "future major expense".
The document states: "In Spring 2021 routine inspections revealed that significant work was needed to the fabric of the Main House. A detailed survey was carried out and issues identified.
"Because the property is a Listed Building, the necessary works have to conform to particular guidelines, and although costings at Beaulieu Convent School have not yet been finalised it is expected that the remedial works could cost up to £300,000.
"It is expected that these works would be carried out over the coming year, but no provision has been made for such expenditure in these financial statements."
The document notes that the maintenance expenses are likely to have an impact on the school's net income for both 2022 and 2023.
TOMORROW: Express investigates the disaster-planning to get the school back on track and ensure it cannot be taken over by CYPES.
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