Leeds could lose out on almost £1m of potential revenue after the Government effectively ordered it to hand over a former primary school site to a new free school for nothing.
The Khalsa Science Academy, a Sikh ethos free school, already operates from a site in Chapeltown since opening last year.
Bosses now want to take over the former Fir Tree School building, which was recently declared surplus to council requirements, as its permanent home.
However the Department of Education won’t buy it from the council, and has now confirmed that it is likely to use powers under the Academies Act 2010 to enforce a handover.
The only other option for the council is to release the building on a 125 year lease on a peppercorn rent.
A new report to be debated by the council’s decision-making executive board this week says: “The Academy in conjunction with the DfE has identified the ex Fir Tree site as suitable as a permanent home for the school.
“There is no requirement in law for the council to provide land for Free Schools and officers initially sought to understand how the council would be compensated for the loss of this valuable site.
“The stance taken by the DfE is that there would be no benefit to the overall public purse if they compensated the council for the site and sought a transfer of the site at nil cost.
“The DfE was asked to confirm that it was prepared to direct the council that it was required (in law) to make such a transfer. The Parliamentary Under Secretary of State for Schools wrote to the Director of Children’s Services setting out the legislation which he could use to enforce the transfer of the freehold of the site.
“He was... minded to enforce the transfer of the freehold of the site under powers contained in the Academies Act 2010.”