The importance of external valuations for schools and multi-academy trusts
School buildings and their assets are an intricate mix of structures, facilities, and infrastructure that serve the unique and specialised function of education. This is even more complex when referring to MATs and their diverse portfolios spread out across multiple locations.
Understanding the true value of these assets is absolutely crucial for informed decision-making and financial planning, as well as with financial reporting and regulatory compliance.
Engaging with professionals, such as RICS accredited valuers, ensures precise valuations in accordance with current market value to help minimise future financial risk whilst ensuring compliance governmental procedures.
Moving away from DfE valuations- new government guidance
Recent updates in the Academies Accounts Direction (AAD) 2024 and the Academy Trust Handbook 2024 represent a pivotal change in how schools and Multi-Academy Trusts (MATs) should approach property valuations, aligning with the DfE’s broader objectives to enhance governance, transparency, and financial autonomy within educational institutions.
Historically, schools have predominantly relied on property valuations provided by the Department for Education (DfE), as it was marked as best practice. However, in recent years, there have been concerns that DfE valuations might not always be appropriate for academy trust accounts, which could lead to significant discrepancies between a property’s true value and its reported value in financial statements.
The AAD 2024 now emphasises that academy trusts, especially those with long leasehold premises, should use independent external valuations to ensure their property values reflect local market conditions. This is because DfE valuations are meant for national assessments and might not represent fair value at the local level.
The guidance provides several options for determining fair value, including:
- Obtaining a valuation from a chartered surveyor
- Obtaining a valuation from the relevant local authority
- Leveraging asset valuations from construction companies or transferring academy trusts
Reasons for external valuations
Regulatory compliance: To meet DfE regulations, financial statements must accurately represent asset values, ensuring transparency and accountability.
Financial accuracy: Independent valuations reduce financial risk by ensuring assets are neither over- nor undervalued, which supports appropriate insurance coverage and financial planning.
Strategic decision-making: Knowing the true value of property assets helps schools and MATs with long-term planning, enabling better resource allocation, capital investments, and asset disposal decisions.
Transparency and governance: Accurate valuations enhance transparency and build trust with stakeholders, including trustees, investors, and regulators, by demonstrating sound financial management.
Eddisons Education
At Eddisons Education, we provide expert property advice to clients across the education sector, offering comprehensive valuation services for schools and multi-academy trusts.
From asset disposals to full-scale financial reporting, including land and building valuations, our team of 60+ RICS-regulated surveyors brings specialised knowledge to meet the unique needs of educational institutions.
