Download SECTOR presentation FABGS

Asset Finance for Schools
11th June 2009
Darrell Slevin
Associate Director
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Structure of presentation
 Sector Treasury – Who are we?
 Current Regulations and Financing Options
 Assets Leased by Schools / Current Position
 Proposed Solution
 Sector’s Lease Expiry Support
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Sector Treasury……Who Are We?
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Highly experienced team
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A leading Public Sector leasing advisor
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Arranged leasing facilities in the last three financial years for over
150 clients for assets with a value in excess of £250m
Luton’s Appointed Advisor
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Current Regulatory Framework
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The Schools Standards and Framework Act 1998
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The Education Act 2002
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The School Finance (England) Regulations 2006
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Prudential Code
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SSAP 21 / FRS 5
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IAS 17 – April 2010
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OPTIONS
Purchase
Grants
Internal Loan
Leasing
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Assets Leased by Schools
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Computer Hardware and Software
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Photocopiers and Printers
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Telephone Systems and Fax Machines
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Furniture and Lockers
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Laboratory and Workshop Equipment
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Catering Equipment
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Sports and Gymnasium Equipment
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Musical Instruments
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Coaches and Minibuses
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Security Systems
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Background - IT/Equipment Leasing
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Supplier introduced leases
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Beware
On assets which depreciate fast and are difficult to return, a form of finance lease is likely to be
the finance option utilised by suppliers. This is non-compliant (ultra vires).
Concerns
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Uncompetitive rates
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Agreements are usually finance leases
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Onerous documentation
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Finance linked to supply – forced refresh
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Termination and roll up leases “blend & extend”
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Equipment specific
Always look to break down
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Supply costs
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Finance costs
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Maintenance / Service costs
Operating Leases can be arranged for most assets
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Lease Roll-ups – Caution!
“Easy upgrades”
Technology
Refresh
BNP Paribas, Canon, Capgemini, Dell, HP,
IBM, Ikon, Konica Minolta, Pitney Bowes, RM,
Sun Microsystems, Syscap & Xerox
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Proposed Solution: The Call-Off Facility
Competitive Rates
Wide
Coverage
SaveAsset
money
Easy to arrange
Standard Terms
Minimise problems
SSAP21 Compliant
Real Operating Lease
Reputable Lessor
Real Return
Option
Reduce
problems
Reporting
Mechanism
WEEE
savings
Reduces problems
Schools Deal Direct
Reduces LA
involvement
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Sector’s Lease Expiry Support
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Database of contracts
Early reminder of contract expiry to LA
Evaluation of options
Help negotiate lease extension terms
Third party sales to the School
Negotiate return condition charges