A high street bank has agreed to write off millions of pounds in debts owed by 27 schools that fell victim to a large-scale equipment leasing rip-off. A BBC Panorama programme to be screened this evening found there are at least 169 schools that fell for the elaborate scheme. This is from the BBC…
At least 10 head teachers have been suspended or resigned after being duped by mis-selling companies.
Some schools signed deals that saw them paying as much as 10 times the going rates for computers and photocopiers.
Clydesdale bank told the programme that as an act of goodwill, it would forgive the debts of the 27 schools which signed deals with the the bank involving two firms, called LTM and DTS.
Both companies, which operated out of the same premises in Hertfordshire, collapsed with combined debts of £30m.
But it was the schools themselves that were left to make repayments under the deals that LTM and DTS had arranged.
The debts that schools across the country were left to pay has put some in danger of closing. Other schools have been left with hefty bills to pay for equipment that in some instances did not arrive and in other cases was damaged or substandard.
In total, more than 70,000 pupils have been affected.
Margaret Hodge MP, chair of the Commons public accounts committee, said that while banks and other financing companies might not be legally required to examine whether the deals offered value for the public money being spent by the schools, she felt there was a “moral responsibility”.
“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,” she said.
A spokesman for Clydesdale bank said that it had no involvement in selecting the suppliers, or the equipment prices agreed by the schools, but was taking a sympathetic view of the situation.
The bank, which called in the police to investigate the actions of both LTM and DTS, said: “As a gesture of goodwill, we will be writing to all 27 schools that financed their equipment with us to provide them with reassurance that the bank will support them by writing off the outstanding principal debt associated with these agreements.
“Those schools will also be able to retain the equipment. We hope this will provide the schools and their communities with a great deal of comfort.”
Panorama: Reading, Writing and Rip-offs, BBC One, Monday, 24 September at 20:30 BST and then available in the UK on the BBC iPlayer.