St Michael's and St George's school grants

18 January 2012

"Following a question raised in the States Assembly on 17 January 2012, I would like to provide further information to members about the discontinuation of States grants to St Michael’s and St George’s preparatory schools.

The annual grant to St Michael’s school of approximately £410,000 will be phased out over the next 5 years. By 2016 they will no longer receive a States subsidy.

The arrangement for St George’s is different. When negotiations began, the school was facing a large rent increase that would have put its future in doubt. In order to avoid closure, the school requested an advance of the annual grant it would have received over the 5-year period. This enabled St George’s to purchase the premises at La Hague Manor, St Peter, and secure the future of the school for its 180 pupils.

The proposal was worked through by both the States Treasury and approved by the Comprehensive Spending Review Board under the previous Council of Ministers. It was approved by Treasury Minister who made the money available from the restructuring provision. Both Ministers recognised that this payment would support the States’ strategy to deliver real savings and provide better value for money within existing spending limits. I am grateful to the Treasury Minister and his officers for their work on this.

The level of grant provided to St George’s each year has been approximately £204,000 but fluctuates slightly depending on student numbers. The advance payment it received was £500,000 – equivalent to 2 and a half years of the full grant, or roughly the same as it would have received if the funding had been phased out over 5 years.

In other words, the amount of public funding received by the school has not changed. It is only the timing of the payment that has altered.

The arrangement clearly has important benefits for St George’s and the Jersey taxpayer. By adopting a flexible approach we have been able to save a valued school. We have also reached a solution that has enabled us to save a considerable sum of public money in the long term. This one-off payment has ended St George’s reliance on taxpayers.

I have already said that I support transparency and it was always the intention to publish this information as soon as possible. However, it would not have been appropriate to publish details of the payment until the property transaction was completed. The sale went through Royal Court on 16 December. I was then in the process of arranging a meeting with the school to discuss the announcement. This was overtaken by events and yesterday’s question.

I am grateful to the schools for their co-operation in achieving these savings. I would also like to reassure States Members and the public that safeguards are in place to ensure this grant cannot be exploited for commercial gain. A contract is in place that requires full or partial repayment of the £500,000 in the unlikely event that the building ceases to operate as a school during the timeframe of what would have been the grant."