Mis-sold IT leases could cost schools millions

17 Jan 2012

by: Margaret Snell

An investigation by BBC Radio 5 live has found that schools across the UK are being charged up to ten times too much for laptops and other IT equipment through mis-sold lease agreements.

The investigation found that some schools were effectively being charged £3,705 per laptop for machines valued at between £350 and £400 each. An industry insider says the overcharging could run to hundreds of millions of pounds. Under such leasing schemes, schools effectively hire equipment from a supplier by taking on a loan from a bank that funds the supplier.

The Leasing Advisory Service says it is helping a local authority which had to pay nearly £500,000 to settle a lease on behalf of one school for photocopiers worth just £45,000. In some cases, head teachers are being chased for payment by finance companies for equipment they were told was free.

The Department for Education advised that: “Schools need to be absolutely sure of what they sign up to and read the small print because it is usually very difficult to legally challenge or break these types of contracts.”

James Bird, CEO at Stone, an ICT services provider to the UK Public Sector and education, argues that despite some cases of poor practice, there are a lot of positive reasons why leasing arrangements can be good for schools that are looking to maintain a high level of ICT. It can enable schools to maintain or improve their pc estate with less capital, and gain access to the latest technology sooner.

Bird says there are three crucial points for schools to consider before entering into a leasing agreement: check through the details of the lease thoroughly and make sure it fits the needs of your school; consider whether your current ICT capability will meet your future demands; be sure to confirm what is included in your leasing agreement.

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