Private School Informs Council of Inability to Fully Repay £2.4 Million Debt

A private educational institution, which secured multi-million-pound loans from a council that has since declared bankruptcy, has informed the local authority that it “not currently have funds” to completely settle its outstanding debt. Specifically, Greenfield School, located in Old Woking, Surrey, received £13.3 million in loans from Woking Borough Council, with a payment of £2.4 million scheduled for 25 November. Documents from the council, slated for presentation on Thursday, indicate that “the school may not be in a position to do this”. The loans extended to Greenfield School were referenced in the Public Interest Report, released on 5 November, which examined the circumstances surrounding Woking Borough Council’s bankruptcy. This report by Grant Thornton disclosed that the council had borrowed funds for investment in regeneration initiatives and subsequently to assist its unprofitable companies in servicing interest payments. Additional funds were also borrowed and subsequently lent to the private school, with the council’s rationale at the time being that providing loans to the private sector would alleviate capacity pressures within state schools. Demands for an investigation into this loan emerged in October. Greenfield School, which charges annual fees of £17,010, is currently paying 1% interest on the borrowed amount. According to the meeting documents, the school made a repayment of £851,098 on 11 October, following the sale of assets. The documents state: “No payment is required by the school until 25 November, and there has been no confirmation that the payment will not be made.“However, the school has approached the council advising they do not currently have funds to make full payment and have discussed re-financing options.” Potential solutions involve additional property sales; however, council documents indicate that this process could span approximately two years to finalize, if it proceeds at all. An alternative option involves the council directly assuming control of Greenfield’s assets. The report suggests granting the school an extension for loan repayment. Greenfield School stated that it had no further comments beyond the information contained within the council documents.