Education Act 1996

483 City colleges: financial provisions

(1) Payments under an agreement under section 482 may be in respect of capital or current expenditure.

(2) In so far as such payments relate to current expenditure, the agreement shall provide for their continuance (subject to the fulfilment of the conditions and requirements falling within section 482(4))—

(a) for a period of not less than seven years, or

(b) for an indefinite period terminable by the Secretary of State by not less than seven years' written notice.

(3) Where such payments relate to capital expenditure, the agreement shall provide for the repayment to the Secretary of State, in the event of the school at any time discontinuing or ceasing to have the characteristics specified in the agreement and in section 482(2), of sums determined by reference to—

(a) the value at that time of the school premises and other assets held for the purposes of the school, and

(b) the extent to which expenditure incurred in providing those assets was met by payments under the agreement.

(4) Without prejudice to subsection (1), an agreement under section 482 may provide for indemnifying a person, in the event of the agreement being terminated by the Secretary of State, for expenditure—

(a) incurred by that person in carrying out the undertakings mentioned in section 482(1), or

(b) incurred by that person (otherwise than by virtue of subsection (3)) in consequence of the termination of the agreement.