Clydesdale Bank has agreed to write off millions of pounds worth of debt following a lease scam that led to hundreds of schools paying up to ten times the going rate for computers and photocopiers.
BBC’s Panorama programme found that at least 169 schools entered into the deal which was headed up by two firms called LTM and DTS.
A spokesman for Clydesdale Bank has said that as a “gesture of goodwill” it will be writing to 27 schools that it offered financing to as a result of the scam and “providing them with reassurance that the bank will support them by writing off the outstanding principle debt”.
LTM and DTS operated out of the same premises in Hertfordshire, but have since collapsed with combined debts of £30 million.
Schools that entered into an agreement with the companies have been left to make the hefty repayments, which has resulted in some now being threatened with closure. More than 70,000 pupils have been impacted by the deals.
Chair of the Commons public accounts committee, Margaret Hodge MP, has said that while lenders are not legally required to examine whether the deals offered value for the public money being spent by the school, she felt there was a “moral responsibility”.
She said: “I think if I was sitting in a major bank knowing that these supply companies were fleecing our schools, I would accept my moral imperative to intervene on behalf of the education sector.”
However, Stephen Sklaroff, chairman of the Finance and Leasing Association, said it was up to the schools to make sure they were not signing bad deals.
The BBC has discovered that banks have large amounts invested in school leases – estimated to be approximately £300 million worth across the UK.
Panorama’s ‘Reading, Writing and Rip-offs’ is due to air on BBC One tonight.