South Shields Council faces £7.6m school closure bill
A council could be saddled with a £400,000 annual bill for the next 19 years if a school shuts, members have been warned.
South Shields School is facing closure following a failed attempt to become an academy.
The government currently covers the cost of the building.
If it closes, South Tyneside Council would be landed with repaying £7.6m for the Private Finance Initiative (PFI) deal that built the school in 2007.
Ofsted inspectors gave the school their lowest rating - inadequate - in 2017 prompting the Department of Education to order the school be turned into an academy.
But governors have been unable to find a sponsor for the school, which has about 550 students, due to "falling pupil numbers" according to Moira Smith, the council's lead member for children.
Cabinet member for resources and innovation Ed Malcolm said the council would be liable for the repayments if the schools closed, adding: "That is why the council would have to quickly find another educational use for the building if the school were to close."
The PFI deal has 19 years to run with annual repayments currently set at £409,802, although that would increase with inflation according to the Local Democracy Reporting Service.
Ofsted returned to the school in May for a monitoring visit with inspectors saying managers were "taking effective actions towards the removal of the serious weaknesses designation" and the school's "improvement plans are fit for purpose".
But, Ofsted said, the council's "statement of action is not fit" and "does not set out how it will facilitate the school's speedy transition to an academy".
Ms Smith said: "In the absence of a credible sponsor, the local authority has no option other than to consult on the closure of the school.
"It is in everyone's interests to manage this at a local level so that we can help shape the best possible future for students of South Shields School."