Education Matters - Choppy waters for academies: is the academies model working?

29 November 2018

In the wake of a recent spate of press articles and the Labour Party’s criticism of the academies model, we ask whether there are fundamental governance issues that might – at least in part – be to blame.

The Times Teaching Educational Supplement (TES) has recently published a number of articles criticising the academies model. There is firstly the issue of what Labour calls ‘fat cat salaries’ to the chief executives. TES reported that the Department for Education (DfE) has named 125 academy trusts which paid at least one salary of more than £150,000 last year, and that the DfE has written a series of letters to academy trusts demanding explanations for these high salaries.

On 9 November, TES also published an article based on information in the DfE annual report on the academy schools sector in England, highlighting the fact that the number of academy trusts that are closing ‘has almost quadrupled in the space of a year’. A recent high profile example of a failing academy trust is the closure of the Bright Tribe Trust, reported in the national press (including the BBC, Schools Week and TES).

Bright Tribe was founded by businessman Michael Dawn and originally ran ten academies in north and east England, but was investigated following allegations of financial mismanagement of £1m in government funding. The investigation found that the trust had made undisclosed payments and broken rules regarding related-party transactions. The trust is expected to close and the DfE and relevant Regional Schools Commissioners are seeking new sponsors for all of the trust’s schools.

The failure of Bright Tribe Trust is not an isolated case, so one has to ask what is going wrong within the sector and whether Angela Rayner’s criticisms of the governance of academies and free schools in her speech to the Labour Party conference on 24 September were justified.

Rayner criticised the salaries of executives in multi-academy trusts (MATs), and said that the governance structure places no obligation on trusts or sponsors to step in to help ‘zombie’ academies (i.e. where a trust stops maintaining an academy), and criticised the model for excluding the voice of local communities. She also highlighted increasing evidence of financial mismanagement within MATs. Rayner stated that “the next Labour government will give power back to communities so that our schools are run by the people who know them best - parents, teachers and local communities.” 

Rayner confirmed Labour’s intention to scrap the free schools programme and end the ‘forced conversion’ of maintained schools into academies if it wins the next general election. Labour plans to enforce national pay rules, allow local authorities to bring ‘zombie’ academies back under their jurisdiction, and it seems that Labour’s longer term plan is to create a National Education Service and bring existing academies under its authority.

We have asked ourselves whether there is any substance to these criticisms: is there a fundamental issue with governance within academy trusts?

The legal structure of an academy trust is very different to that of a maintained school. The governance structure of a maintained school is relatively simple: the local authority oversees all of its schools, but each school has a governing body with responsibility for that school, and a head teacher who makes most of the decisions in relation to the operation of the school.

The position for MATs is very different. MATs are charitable companies that are independent of local authorities, with responsibility for two or more academy schools (and/or free schools). The governance structure for MATs is significantly more complex: each school within the MAT still has a ‘local governing body’ and head teacher, but sitting above them is a chief executive (and senior management team), board of trustees and finally a board of members. This complex and multi-tiered governance structure, made up of a mixture of paid and unpaid individuals, often results in uncertainty regarding roles and responsibilities.

The members are supposed to be ‘eyes on, hands off’ (unless the board is clearly dysfunctional), but often mistakenly believe they have the power to override the decisions of the trustees where they disagree. The board of trustees is made up of volunteers (with some exceptions) who are often experienced governors but do not have an understanding of company law, charity law or how to manage a substantial business. The trustees of the MAT are much further removed from the day-to-day operations of each academy school than are the governors of maintained schools, yet most individuals on boards of trustees were formerly governors and it can be difficult for them to understand their new role. There is also often a lack of accountability within MATs, with little control over delegated authority and inappropriate oversight of activities at board level, resulting in issues going unnoticed and becoming exacerbated.

In our experience there is a pervasive lack of understanding within the sector of the legal structure and governance requirements. However, we have seen how improvements in governance are capable of turning a failing trust into a thriving trust. The challenge facing the sector is that the obligations for trustees of MATs are onerous, the regulatory framework is constantly changing, and yet trustees are all volunteers with many other pressures on their time. So, we are not sure whether it is right to say that the model is fundamentally flawed, but we do consider that improvements in governance can result in effective MATs. Perhaps the answer is not to scrap the programme, but to invest more in the education and training of individuals sitting on the boards of MATs and maybe even to reconsider the voluntary nature of the role?

The content of this article is for general information only. For further information please contact Liz Brownsell or a member of Birketts' Education Team.

This article is from the winter 2018 issue of Education Matters, our newsletter for our clients and contacts in the education sector. To download the latest issue, please visit the newsletter section of our website. Law covered as at November 2018.

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Liz Brownsell

Senior Associate, Co-Head of Charities and Social Enterprise

+44 (0)1473 406383

+44 (0)7525 735802