Back-room sponsors for new academy schools

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The Government has been accused in court by parents of breaking European competition law in its ‘back room’ method of choosing sponsors for new academy schools. They fear that some sponsors are big profit-making companies whose best interests may not be shared by the schools they run.

Since the ‘open to tender’ rules which govern sponsorship of schools generally do not apply to academies, is the government guilty of disregarding the basic principles of fairness, openness and equity of treatment in laying down the foundations of a new academy school? Managing Schools Today discusses the issue.

Academies are state-funded schools established and controlled by sponsors from a wide range of backgrounds, including colleges, universities, individual philanthropists, businesses, the voluntary sector, and the faith communities.

For the Government they are a key element of the drive to raise standards, aspirations and creating opportunity in some of the most disadvantaged communities in the country.

Trust schools are state-funded foundation schools supported by a charitable trust. They are able to manage their own assets, employ their own staff, and set their own admissions arrangements, but the level of financial involvement from outside from partners and their control over the governing body differs from academies.

One of the many concerns of parents, teachers and support unions is that Academies and Trust schools are disproportionately likely to admit pupils from more socially privileged backgrounds or those with more educationally assertive parents.

At the same time, support from companies, individuals, trusts and foundations are vital to the ongoing success of the specialist schools programme and to the improvement of education in this country as a whole.

However, the whole issue of school sponsors recently saw the government being taken to court by parents who maintained that there was no transparency in how sponsors are appointed. The parents claimed that by secretly appointing private sponsors to schools, ministers were breaching competition rules.

The legal challenge began over a proposed academy in Camden in north London, which was brought to the high court by parent, Gillian Chandler, a mother of three whose primary-aged children will be able to apply for the new academy, scheduled to open in 2011.

The high court challenge centred on the accusation that schools secretary, Ed Balls, had bypassed EU procurement laws by not putting academy contracts out to tender, allegedly denying other potential sponsors a chance to compete – so breaking government rules regarding open competition for new schools.

The success of the legal action could have profound effects for the future of the government's academy programme. For instance, if the current process of appointing preferred bidders for academies becomes illegal, parents will be able to demand a community school instead of a private-run state-funded academy - and sponsors will have to mount campaigns to be able to run schools, potentially putting some off.

Furthermore, many of the parents involved in the legal challenges would like to apply to run the schools, believing they could do a much better job than business sponsors in securing the future of the schools.

Trentham High School in Stoke, another school threatened by proposals to build an academy there, is also embroiled in legal action by parents to protect its future. Ian Hookway of the Save Trentham High Action Group, wants to force a competition, giving interested parties - including themselves - the opportunity to help decide the type of new school they will get as well as who will run it.

"We believe we could provide a much more compelling case to secure the future of this school than the route that's currently being taken," he said.


The controversy over sponsors includes allegations that an American education company is set to sign a series of multi million pound deals to run academies for profit.

Edison Schools is in advanced talks with academy sponsors to take charge of three schools within the next year, and as many as 12 altogether.

The company will charge each academy around £1.2m for a three-year contract, with about 20 per cent of the fee directly linked to improving school performance.

Academy sponsors themselves are not allowed to operate their schools for a profit. But Edison Schools will be able to take money out of the schools’ budgets in return for hitting targets. This pushes the Government’s ban on running state schools for profit to its limit, and may be paving the way for profit-making companies to run alternative provision for excluded and vulnerable children.

Naturally, teaching unions have condemned the plans for privatising state schools.

John Bangs, head of education at the National Union of Teachers, said: “It opens up the possibility for other global education companies to come in and make a profit.”

Edison Schools said it had received increased interest from local authorities following the launch of the Government’s National Challenge scheme, which has threatened to close schools where fewer than 30 per cent of GCSE pupils attain five good grades, including in English and maths.

Edison Schools also expects to expand its work with local authorities. The move would be similar to a deal the company recently signed in Northampton, where it is working with 20 schools. Part of the contract would be based on payment by results, with exam grades, value-added scores and Ofsted ratings being taken into account.

John Dunford, general secretary of the Association of School and College Leaders, said: “The line between the public and private sectors in state education has become much less clear.” He thinks the most effective way to improve performance is through help from other schools, rather than private companies.

However, Edison Schools has already recorded dismal GCSE results for a poorly-performing comprehensive school it was meant to be turning around. This year, just 19% cent of students at Salisbury School in Enfield, north London, achieved five GCSEs at grades A* to C including English and maths. This was 3% down on last year and less than half the national average.

Enfield Council is paying Edison £390,000-a-year to transform the school.

The National Union of Teachers had previously claimed that the contract was a waste of money and should be spent improving children’s education rather than ‘lining Edison’s pockets’.

There is also the question of the unfair pressure on local authorities to include an academy in proposals for much-needed improvements to secondary school estates to be financed through the otherwise welcome Building Schools for the Future (BSF) programme.

The dilemma faced by local authorities is to include an academy in the BSF bid and it comes free to the authority courtesy of the taxpayer, or don’t include an academy and new build schools come in at full price.

This is bullying behaviour, and in the face of such governmental tactics, the pressure to forego sound educational planning and practice is often too strong for local councillors concerned for the pockets of their council tax payers to resist. So in the place of good practice comes an assortment of private sponsors.

One of the conclusions to come out of the report into academies and trust schools by the Anti Academies Alliance was that the almost absolute power the sponsor gains once a school acquires academy status was a matter of grave concern, as was the lack of clarity around where that power is delegated when a sponsor moves on. Schools are public entities funded with public money; the powers of decision-making on how public money is spent should not be channelled into the hands of one private or independent sector body and certainly not without rigorous accountability safeguards.

The report recommended that the government remove the powers of the sponsors, whilst continuing to encourage links with business and other organisations.

Meanwhile, labour MP, Ken Purchase, who is opposed to the Academies programme, has said: “Academies take an unfair slice of precious capital and revenue from the education budget, provide poor value for money, distort local education provision and so the programme should be halted.”


Now parents want to force a competition, giving interested parties - including themselves - the opportunity to help decide the type of new school they will get as well as who will run it. They are seeking to challenge the legality of the way sponsors are chosen for proposed academies in their areas and believe they could provide a much more compelling case to secure the future of some schools than the route that’s currently being taken.

Patents also believe the government has duties under EU community law and in particular the procurement directive, to ensure that when they award a public service contract they follow an open process - so that anyone who wishes to bid is aware of the opportunity.
Ideally, interested parties would have an opportunity to put forward their proposal and the government can then decide in an open and transparent manner which organisation should be awarded the contract. At the moment there is no such process.

The ultimate decision to appoint sponsors is made by the government, which says it will be rigorously defending itself against any legal action by parents.

Schools Minister Jim Knight said: “The basis of the legal argument is that we don’t consider European procurement law to be applicable in the selection of sponsors because they raise money for a school rather than profit from it.”

He went on to say: “We’ve got a perfectly open system in terms of people who want to come forward and suggest themselves to be academy sponsors, and then it’s a question of us then marrying those up with projects that will work for the communities and the sponsors.”

The jury is out at the moment as to who will ultimately win the legal battle. What is certain is that the outcome of legal action by parents could potentially change the way sponsors are chosen for all future academy schools.

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