The Department for Enterprise has defended its decision to only charge King William’s College interest on its loans after the initial three years.
It was revealed in Keys last week that the island’s only private school will receive £2.2m in repayable grants, which will be repaid over five years, with interest only being paid after the third year.
A spokesperson told Manx.News that the terms were necessary to ensure the school’s long-term survival and protect millions in economic benefits for the Isle of Man.
Under the Financial Assistance Scheme (FAS), the school will pay no interest until 2026, followed by minimal rates being applied following the drawdown of funds, a move the department says reflects the need to stabilise its finances while safeguarding jobs and local spending.
“The structure of the financial assistance reflects what was required to support the long-term sustainability of King William’s College,” a spokesperson said. “This protects a significant number of local jobs, over £1.3m in annual tax revenue, and £3m in construction spending.”
They added: “An applicant has to demonstrate that they can meet the criteria in the guidance, including demonstrating the sustainability of the business and that is can trade on a profitable and sustainable basis, if support is provided.
“The department is confident that based on the information assessed to date, the applicant will be viable and will have the ability to repay. Additionally, the support provided is conditional on full security being in place.”
Company not Charity
The support was granted to King William’s College as a private company limited by guarantee, rather than its charitable arm. The department confirmed eligibility was assessed under the Enterprise Act 2008, with a full review of the school’s financial position.
“An FAS offer can be made to a charity lawfully if it is a business and eligible under the Act,” the spokesperson added. “In this case, the application was to the operating company, but a broader assessment was conducted.”
Confidence in Repayment Despite ‘Financial Difficulty’
While FAS guidelines allow support for businesses in “financial difficulty,” the department insisted the school’s ‘One School’ restructuring plan ensures future viability.
“The department is confident that, based on the information assessed, the applicant will be able to repay,” they said, noting the loans are secured against assets.
Checks and Minister’s Historic Ties Declared
Financial records, including accounts and forecasts, were scrutinised before approval with Treasury and the Council of Ministers signing off on the deal, following standard procedure.
Enterprise Minister Tim Johnston, a former student 35 years ago, declared his past connection but did not recuse himself. The department said: “The minister has no active interests or current participation with King William’s College.”
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