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leasing office equipment: no such thing as a free lunch

1 May 2012

Reports of schools entering poor value equipment leasing arrangements highlight an issue that is now more relevant than ever as academies take responsibility for their own contracts.

Many contract problems stem from unclear terms and conditions, such as complex cash-back arrangements provided by intermediaries (often agreed verbally with nothing in writing). This makes cash back arrangements difficult to pursue and can and has left schools on the hook for the full, often inflated charges. For example when the intermediary ceases trading, leaving the school unable to recover cash-back payments directly from the finance company.

Schools should compare the cost of purchasing the equipment from an independent supplier, and against more straightforward arrangements without cash-back. Particular care should always be taken over cash-back schemes and other complex proposals. It may in any event be a good time for schools - particularly academies directly responsible for these issues - to consider their approach to procuring private sector contracts.

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