Magazine article Public Finance

Academic Achievement?

Magazine article Public Finance

Academic Achievement?

Article excerpt

On 10 March this year, the chief inspector of schools, Sir Michael Wilshaw, sent a letter to education secretary Nicky Morgan. It expressed, in robust terms, concern that seven multi-academy trusts (MATs), the organisations responsible for running many academy schools, were performing particularly badly. Their chief executives were overpaid, Wilshaw added, and some were hoarding cash reserves, with a total of £inm in the bank between them. In 2014-15, the seven trusts had spent £ on educational consultants.

A few days later, the government announced that every school in England will become an academy by 2022. This was the culmination of a sweeping change to the educational landscape since the Labour government introduced academies in 2000.

Following the model of charter schools in the US, the idea was to give failing schools a boost by allocating them to private sponsors. These new academies were taken out of local authority influence, and allowed to arrange their own admissions, manage staff recruitment, decide what to pay teachers and senior management and opt out of the national curriculum. By the time of the 2010 general election, 203 schools were in MATs.

The Academies Act 2010 expanded the programme by allowing schools to convert to academies without having a sponsor, reporting instead to central government. Initially, priority was given to schools rated as outstanding by Ofsted, and they were offered a financial incentive to convert.

Terry Wrigley, visiting professor at Northumbria University and editor of international journal Improving Schools, says: "For many years, they were treated as brand new schools and given vast amounts of money to enable them to pay for brand new books and computers."

Today, 59% of secondary schools and 17% of primary schools have academy status. Two thirds are run by MATs.

The coalition government also introduced free schools. Based on a Swedish model, these are completely new schools with academy status that can be set up by groups of parents, teachers, charities or private organisations. Just over 300 free schools have now opened, and the plan is to create 500 in the lifetime of this parliament.

Academisation, as Wilshaw's letter suggests, has been a costly process. In 2013, the Public Accounts Committee found that the government had overspent by more than £ibn on the academies programme in two years, and that £95m of this had come from a budget to support underperforming schools.

For the sponsors, it represents a good deal. When they take over a school, they pay a nominal rent to the local authority for a 125-year lease on the land and buildings. In the case of foundation schools (those owned by a trust), the freehold is transferred from the trust to the sponsor.

It's a potentially lucrative business, says Henry Stewart, cofounder of the Local Schools Network: "You now have people running academy chains, earning over £20ok a year. No director of education in the country earns more than £200k a year. So you have people responsible for a couple of dozen schools, paying themselves a fortune.

"Then, although they're not meant to make a profit, you often have allied service organisations that have a monopoly on the schools in that chain, and are making money from it."

One example can be seen in a 2014 National Audit Office (NAO) report, which found a number of financial conflicts of interest in the running of Durand Academy: among others, it was paying a business owned by the executive headteacher, Sir Greg Martin, £2sok a year to run the school's leisure facilities. In March, the Perry Beeches chain, which ran five academies, had to close because of financial mismanagement, including third party payments made to the chief executive.

The NAO has also criticised the rising capital costs of free schools, noting in a 2013 report that it had cost the Department for Education on average £6.6m to acquire and convert premises for free schools, more than double the £3m it originally estimated in 2010. …

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