Last reviewed 8 November 2019

The Department for Education (DfE) is to offer house builders loans to help them build schools alongside new housing developments.

Education Secretary Gavin Williamson has confirmed that up to £20 million per school will be made available to builders working on mixed-use projects.

Launched in partnership with the Ministry of Housing, Communities and Local Government (MHCLG), the Developer Loans for Schools programme will be piloted until 2021, with loans initially being offered to 10 bidders.

Developers interested in participating in the pilot programme are invited to submit proposals to the Department for Education.

To be considered, areas must meet a range of criteria, including: demand for more good school places; planning permission to build extra homes; and early funding required for a school as part of a housing development.

Loans agreed under the scheme will be charged at interest and be repayable once new homes are sold.

Admitting that building schools and properties at the same time so they are ready for new communities can be challenging for housing developers in some cases, Education Secretary Gavin Williamson argued that the new loans will help parents secure a good school place for their child at the same time as moving into a new family home.

The loans initiative builds on guidance published earlier this year by the DfE which aims to support local authorities to secure contributions from developers to fund school places associated with new housing developments.

It also follows updated Planning Practice Guidance which ensures that funding for schools is properly considered when housing developments are planned.