When a school closes

Contents of this section

Preface

Introduction

Find Your Trust Deed

Identify Your Trustees

The Usual Way Forward

Decide What the Ideal Future Would Be

What about Time Delays?

Whose Money Is It Anyway?

What about the records?

A Check List For Action

Preface

The closure of a church school affects every member of the local community who uses or has used the school, or for whom it is simply a familiar part of the landscape. The trustees of the school, who are often (but not always) the incumbent and churchwardens of the Parish, are involved, with the Diocesan Board of Education, in the decision-making about the building’s future. This page provides guidance on the correct procedure to follow when a Church of England school closes. The advice contained is an amended version of that contained in the booklet, When a school closes published by the National Society in 1992.

Introduction

It is always a sad time when a school closes. The sadness is associated with the good memories that the community holds of the school, and with the impact that the closure will have on the community. This impact is greater if the community has been making use of the building outside school hours, especially if it is the only meeting-place in the area.

At the same time, a number of decisions have to be made about the future; the principal of these is what is to be done with the school building. Any playing fields will usually belong to the local authority. Where the community has been using the building, these decisions may have an effect on community activities. If the school is a community (formerly called county) school the decisions on these matters lie with the local authority; while the people of the area may be active in making representations to the authority, the only direct local connection with the decision-making process is through the councillors elected to serve in the ward in which the school is situated. If the school is a church school, however, local people may become involved in the decision-making by virtue of the offices they hold in the church. It is helpful if everyone knows what his or her role is or could be, and understands the issues involved in the decisions so that there is as little confusion as possible in the process of making these decisions. Of course, the school may be closing because a new school is being built to replace it. In this case it is most likely that the old school will have to be sold to help to pay for the new one. Then the sadness about the closure will be about losing a visible link with the previous generations who have been educated in the school.

Find Your Trust Deed

All church schools have, or should have, a trust deed. These are mostly documents which were drawn up at the time that the school was founded and which set out the ownership of the land and buildings, and indicate how the school should be conducted. They usually were drawn up under various acts of parliament during the last two centuries. These deeds may reveal that the trustees are responsible for all the land that surrounds the school or it may be that they are only responsible for part of it, with the local authority owning the rest.

The trust deed may have been lodged in the County Record Office. It could also be in the Diocesan Archives, or the offices of the National Society in London. The Diocesan Archivist is also Cheshire County Council’s archivist and is based in Chester. Perhaps it is in the school safe, the Vicar’s study or the Parish chest. Sometimes the Public Record Office will hold a copy of the trust deed. When the original has been found, a copy should be made to be kept in a safe place in the school, while it is still functioning, and then it should be lodged with the Diocesan Archivist where it can be properly preserved by experts who understand both the business of ensuring that it is available for consultation and the preservation of old and important documents.

The trust deed may make clear some of the action that has to be taken. For instance, there may be reference to the fact that when the school was given to the parish, it was on the understanding that it would be returned to the ownership of the donor if the school closed. This is called a ‘reverter’. It may not be apparent on the face of the trust deed that there is a reverter, but if the deed contains wording such as ‘under the authority of an Act passed in the fourth and fifth years of the reign of Her Majesty Queen Victoria entitled “an Act to afford further facilities for the conveyance and endowment of sites for schools”’ this indicates that the school site may be subject to reverter. If there is a clause like this in the trust deed you will need to consult DBE officers before any action is taken. Your trust deed may also indicate that the buildings were given only for the purposes of a school, or they may have been given for other purposes as well. Inclusion of the words ‘educational purposes’ however, does not necessarily mean that the building can be used for youth work or playgroups when it closes. When the deed is read in the context of the legislation that was in force at the time that it was written, it often becomes clear that phrases like this in a trust deed cannot be given such a wide interpretation. Advice from lawyers experienced in this area of law may be necessary in order to clarify this point. It will be apparent that these points about the content of the trust deed could affect some of the decisions that you will be asked to take or discuss. DBE officers should always be consulted.

Identify Your Trustees

Within your trust deed the trustees of the school will be identified. These are often, but not always, the incumbent (vicar or rector) and churchwardens of the parish. Parish boundaries may have changed, and in such a case the previous parish may still have some rights to the nomination of trustees.

It is the trustees’ duty to ensure that the decisions made about the school building are in accordance with the trust deed. If it is not possible to fulfil the terms of the trust any longer because the school is closed, then they should co-operate with the creation of a new scheme to apply the assets of the trust to the nearest objective that can be found for them. This usually means that, where the money or building was given for the creation of a church school, it should now be used for the support of other church schools. Depending on the detailed wording of the trust deed, it is possible that a proportion of the money can be used to support parish-based religious education. Problems sometimes occur because the incumbent and churchwardens do not recognise that they are acting as trustees of the school trust and not as the responsible officers of the parish. Others may also find these different roles confusing.

An issue which may arise early in the discussions about the future of the school is whether it has received grants from either the Department for Education (or its predecessors) or such charities as The National Society. In some circumstances such grants may have to be repaid. This is more likely if it is proposed to change the use of the building away from that of a school. Clearly such possible repayments will need to be considered when discussing future uses for the building.

The Usual Way Forward

The 1996 Education Act provides the usual route for resolving the future of the buildings which form part of a closed school. Under Section 554 of this Act the Secretary of State for Education and Skills may make an order to determine the future ownership of the buildings and the use to which any monies deriving from their use or sale may be put. Such orders are known commonly as Section 554 Orders. In these orders a proportion of the proceeds will always be assigned to the support of the work of church schools in the Diocese. This is an important principle that has been in force since the 1944 Education Act, when the church agreed that it would ensure that any monies received from the State by way of grant would be retained for educational purposes.

The Diocesan Board of Education has a duty to ensure that this happens, and their support of church schools within the Diocese is dependent on such finance. The Diocesan Board of Education has responsibilities for the support of church schools in the Diocese through the Diocesan Boards of Education Measure 1991. In order for us to undertake our responsibilities it is vital that we are enabled to manage the funds that are properly available to us as efficiently as possible. The alternative is to make even greater demands on the parishes in the Diocese via their contributions to Diocesan expenditure to support the work of Church schools.

While a proportion of the proceeds of buildings or funds that are subject to a Section 554 Order will be used for church schools, it is often possible to ask the Secretary of State to approve the allocation of a proportion of the monies to a local religious education fund, usually under the trusteeship of the incumbent and churchwardens of the parish. The principles governing the drafting of Section 554 Orders follow the accepted doctrine in charity law that when a trust fails to be able to meet the purposes for which it was created its assets should be used for the nearest possible alternative purpose that can be found. This is known as the cy pres principle.

The use of such Orders does not prevent the parish from discussing the best possible future for the building, but it does clarify the ownership of the building and the use to which any financial assets may be put. Without this clarification the sale or lease of the buildings may be delayed as a result of legal difficulties. Everyone will wish to avoid such difficulties, to ensure that there is no occurrence of the problems so often associated with empty buildings and the drain on finances that their insurance and maintenance imply.

There will be some occasions, because of the nature of the trust deed, when a Section 554 Order will not be appropriate and a Charity Commission scheme has to be sought. Only skilled legal advice can ensure that these cases are correctly identified and appropriately dealt with. This page does not attempt to deal with such cases, few in number, which are subject to complex ‘mixed’ trusts. DBE officers will provide advice in such cases.

Decide What the Ideal Future Would Be

The preceding sections consider the legal possibilities. Before deciding on what legal route to take the trustees should discuss with DBE officers the needs and wishes of the parish. It should be remembered, though, that if the site is subject to a reverter the trustees may have no choice but to sell the site for the best possible price and pay the money to the heirs of the original donor. It should also be remembered that if the school is being transferred to new buildings the old site may have to be sold and all or most of the proceeds of sale used towards the cost of providing the new site or buildings.
In those cases where a Section 554 Order is not appropriate, it is necessary to decide whether another use can be found for the building which falls within the objects of the original trust. The trust may, for example, allow the building to be used as a parish hall or centre. In these cases, however, the trustees must examine how such a use can be funded. Many school buildings are over 100 years old. They may need extensive conversion work to make them suitable for alternative uses, and they may be costly to maintain in the future. The trustees must ask themselves whether these expenses can really be met by the parish while the building is being used for Sunday school, parent and toddler clubs, evening classes and groups such as the Mothers’ Union. Too often these schemes are attempted but collapse when the lack of regular expenditure on maintenance results in the need for major renovation, and the trustees are left with a building which cannot be used and which they have no funds to repair.
If there is no community use for the building which falls within the objects of the original trust, then the trustees can only sell the building or let it out at a full commercial rent. In these circumstances it is unlikely that the benefits of retaining ownership of the building and leasing it outweigh the benefits of selling in the open market and investing the proceeds. The trustees would normally have to obtain a scheme from the Charity Commissioners making provision for the use of the money.
Where the school is suitable for inclusion in a Section 554 Order there are still many ways in which the needs of the local parish can, with careful planning, be met. The Section 554 Order will empower the Diocesan Board of Education to sell the site, and in many cases a sale at full market value will be appropriate. If the Order provides for a local religious education fund, then the higher the price obtained for the building, the more money there will be to go back to the parish. The Diocesan Board of Education will, however, also be able to let the building and, where there is a need for the premises to be put to community use, it is possible to produce imaginative schemes which meet the needs of both the Diocesan Board of Education and the parish. For example, the building could be sold to a local community organisation on terms which ensured that if it were ever resold for development the Diocesan Board of Education would share in the profits. Because of these provisions, the Diocesan Board of Education might be justified in selling the site at a lower price than if it were sold immediately for development. Similarly, the Diocesan Board of Education could let the building for community use but stipulate that the church was to have rent free use of it at certain times for a Sunday school and other religious education. Because of this stipulation, the market rent for the building would be lower than if it were let on normal terms.
 

What about Time Delays?

Often the process of completing the change from using the school as a school to its new use and possible ownership can take a considerable time. In the interim all those involved in the care of the buildings and any other assets of the trust, including any monies, have a responsibility to ensure that they are looked after wisely, so that, when they can be applied to their future use, their value has been maintained. Careful accounts should be kept of all transactions. This is a legal duty of the trustees, in which they should be able to look for support from others who are properly involved in preparing the buildings for their new use. Sometimes a temporary use may be agreed for some or all of the buildings in order to ensure that they do not become empty, and therefore targets for vandalism. Clearly it should be accepted by the temporary occupiers that their use of the buildings is only temporary, and they should also pay the trustees an appropriate sum for the use that they enjoy. Such arrangements should not be informal, and there should always be a clear written agreement between the trustees and the users of the buildings. Legal advice will usually be necessary before such an agreement is entertained. Any income from such an arrangement should, after costs of maintenance and insurance have been deducted, be held on trust until the future position of the school buildings, or the proceeds of sale of these buildings, has been determined. In such cases the advice of DBE officers should be sought.

Whose Money Is It Anyway?

The answer to this question is that the money is held on trust, and in most cases the trust is limited to educational purposes and often only to the promotion of a school. This is why the Section 554 procedures are the most common and usually the most appropriate way forward.

There are those who see in these procedures a plot to remove money from the parish and use it in the Diocese as a whole. This view seems to stem from a lack of understanding of a number of the issues. In the first instance, church schools are educational trusts, and therefore the money can only be used for educational purposes. Neither the parish nor the Diocese could use it to pay for a new steeple or repairs to the vicarage. Secondly, the gifts were given for a church school, and therefore all the principles of charity law require that the money should continue to be used for church schools. By managing the historic funding for these schools efficiently, the Diocesan Board of Education makes no demands on the parish share system for the maintenance or improvement of Church school buildings. Thirdly, the assumption seems to imply that the parish and the Diocese are distinct entities, which are constantly engaged in a struggle to outwit each other. They are both elements of the one Church; in the Church of England each parish is part of the Diocese, and the Diocese is made up of its parishes. It should be clear that although there may be differences of emphasis or view, those who are engaged in resolving these issues should accept that all are attempting to do the best that they can in the service of the Kingdom of God.

What about the records?

The School plays a central role in the community and its records are an important part of the history of that community. Some records such as current pupil files etc may need to be transferred to other schools, others such as recent accounting records, invoices etc may need to be kept for a statutory period after audit; the main series of records - the log books, admission registers, governors' minutes etc - and other less formal records such as photographs and magazines are key to understanding the history of the school and its community and care should be taken to ensure that they are saved for posterity. The Diocesan Record Office can advise and help on all aspects of managing the records. A final word of caution: it is very tempting to lend books and records to people in the community who express an interest, and the intentions of the lender and recipient are entirely well-meaning. However such unofficial arrangements all too often lead to losses, with uncertain recollections of who lent what to whom, and when: the result is a collective loss of pieces of the jigsaw which is the history of the community.

A Check List For Action

  1. Find the Trust Deed.
  2. Obtain an explanation of the legal position from a solicitor well experienced in these matters. This will almost always be the solicitor employed by the Diocesan Board of Education.
  3. Discuss the future use of the building with the Diocesan Director of Education.
  4. If the building is at present used by community groups, consider whether there is a viable scheme for retaining the building for community use, and if there is, discuss with the Diocesan Director of Education how this could best be achieved.
  5. If the building is to be sold and all or part of the proceeds of sale will come to the Parish under either a Section 554 Order or a Charity Commission Scheme, decide on a strategy for the management and use of the money.
  6. Record the decisions that have been made and the consultations that took place.
  7. Ensure that those who read the public notices that will be published about the future of the building know that they have been issued only after careful thought and consultation.
  8. Ensure that all monies and property are cared for with the attention that is appropriate to assets held on trust for others.


About Church Schools
Webpage icon Different types of Church of England Schools
Webpage icon Distinctiveness
Webpage icon History of C of E Schools