A new wave of Academy conversions


While take-up of the Government's initiative has differed across the UK, many schools are increasingly coming to the view that its determination (that eventually all maintained schools in England and Wales will become independent academies) is slowly gaining momentum and will become inevitable for most schools.

Experience of conversions under the pre-and post-Academies Act 2010 regimes has highlighted a number of factors that school governors and head teachers should take into account. 

This article examines two of these, and then looks forward to how the current legal framework is expected to change under the Education Bill that is currently under development and is expected to become law later in 2011.

The first point is on the decision that school governing bodies must make as to what basic legal structure to adopt for their school as an Academy.  The choice offered by the Department for Education is between the single academy model under which the school will convert by transferring its staff, pupils contract assets rights and arrangements for the school's occupation of school land and buildings to a new company limited by guarantee or academy trust company that will operate exclusively for that school only. 

The school governing body and (where relevant), the local authority will be replaced by the board of directors as the responsible body for running that school and no others.  The alternative, multi-academy model provides the potential for a more complex governance structure involving more than one school while allowing, initially, a single school to be operated by the academy trust company.  If more schools come under the overall governance of the multi-academy trust company, the model articles of association allow each school to have its own governing body with delegated authority and a level of autonomy in relation to the individual school.  Each school would have an element of representation on the main board of directors.  The directors have overall responsibility for the financial health and proper running of the company and the schools operated from within that company. 

An advantage of the multi-academy model is that a school that converts will be well placed to work closely with other schools to form a cluster of schools within a single corporate structure that might share the benefits of shed staff and facilities buying power, administration and leadership and, where appropriate, support by stronger schools of weaker or smaller ones.  In this way, the multi-academy model provides greater flexibility to take advantage of opportunities in the future to withstand anticipated ongoing pressures on overhead costs, and the school's ability to operate effectively and efficiently. 

Disadvantages include the need to manage a diminished feeling of independence, which, after all, is seen to be a key advantage of conversion, and a resistance by some schools to a perception of being 'taken over'.  Another potential pitfall is the need to ensure that risks of failure of one school do not affect the fortunes of another school within the same academy trust company.  Funding arrangements will normally be ring-fenced to the benefit of individual schools but there could be wider risk management issues that would need careful management by the board of directors.  This will be crucial to ensuring the overall solvency of the multi-academy trust company. 

The second point that has emerged out of conversion project is the important consideration of what happens to liabilities of pre-existing schools and their conversion to Academy status.  A perhaps unexpected result of the interrelationship between the Academies Act 2010, the School Standards and Framework Act of 1998 and the Education Act 2002 as amended is that unless the Secretary of State's direct otherwise, (and normally he will not), liabilities associated with the previous governing body and the pre-conversion school are not transferred to the academy trust company, but, instead, revert to the local authority on the dissolution of the governing body.  The governing body will normally dissolve on the point of conversion.  This means that all arrangements involving the governing body including land assets staff and the transfer of rights must be fully ready and signed before the date of conversion.

Elizabeth Davis, Head of the Charities Law team at national law firm Blake Lapthorn

School Leadership Today