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Education: Trust land under threat

by
06 February 2015

Howard Dellar plots the changing agenda for academies

THE 2010 Academies Act changed the rules for setting up and running academies, and changed their Regulator.

Since then, I have been increasingly concerned that the independence of the directors running an academy, a multi-academy trust, or, indeed, a chain of academies is being eroded by regular intervention from Whitehall.

The pre-2010 academies were registered as charities at the Charity Commission, after the independent- school governance model of a charitable company, and their independence was respected. But, more and more, we are seeing evidence that the freedoms once espoused by the Government, and embraced by many of the early converters after 2010, are being replaced with control from central government - control, moreover, that is uncertain of its direction of travel.

One month, an academy trust or chain seems the flavour of the month with the DfE; the next, not so. In the first half of this Parliament, tiny academies were set up as stand-alone ventures which the DfE would be unlikely to sanction now. These days, policy favours multi-academy trusts, or, very recently, mini-multi-academy trusts. The single converter academy is now rare, particularly at primary level.

Since 2010, academies have been exempt from regulation by the Charity Commission; their new Principal Regulator is the Secretary of State for Education, or, in practice, the Education Funding Agency. It has a duty both to regulate academies and to promote the academy agenda, which means increasing their numbers. The directors of an academy, however, are also its charity trustees; they still have to follow charity law, despite the academy's being an exempt charity. Increasingly, the directors' duty to act reasonably and independently is being eroded by attempts to impose a duty to follow the directions of the Secretary of State, as the following examples show.

  • The Secretary of State for Education, Nicky Morgan, imposes changes on an academy's funding and governance arrangements through the funding agreement. But new funding agreements with significant changes are being imposed on new academy trusts without any consultation with key stakeholders.
  • The Academies Financial Handbook can be changed at whim, and again imposes increasing restrictions on the directors' ability to manage their academy.
  • Recent proposed changes to the Funding Agreement contain clauses that give the Secretary of State power to make academy trustees' land available to other academies, and to restrict directors' powers to change their company's articles.
  • Another recent change gives the Secretary of State new and wide powers to declare directors (or proposed directors) unsuitable. There is no requirement for her to state the evidence, and there is no appeal. The director cannot then be appointed, or must be removed.
  • Some academies established before 2010 were set up with an endowment of, typically, £1.5 to £2 million; pressure is being brought to bear on the trustees of those funds by the DfE/EFA to pass the money on to an academy that is struggling financially. This does not sit comfortably with a charity trustee's duty to act independently, and in the best interests of the charity and its future, as well as its present beneficiaries.
  • THERE is evidence that, in certain cases, officials acting for the Secretary of State are seeking to force schools with trusts to transfer charitable property to the academy itself. The regulation of the academy by the Education Funding Agency rather than the Charity Commission risks the expropriation of private value by the state.

Certainly, my hope as a charity and education lawyer is that, as politicians draft their manifestos before the election, they will think carefully about wrapping academies in too much red tape, and let these charities lead the change in educational improvement by letting directors function properly as independent charity trustees.

If the tide is not turned, the academy agenda looks more and more like aggressive centralisation. This may be at odds with the Government's stated policy of increasing local autonomy, and the Big Society agenda.

Howard Dellar is Head of the education, ecclesiastical, and charities department at Lee Bolton Monier-Williams.

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