"Governed by the Community"

David Barry's picture
 24
Whitehall Park School is a proposed Free School for the London Borough of Islington. The proposers are a for-profit company, Bellevue Ltd, who run a number of fee paying schools, both in the UK and Switzerland. The main shareholders of Bellevue are a hedge fund based in Zurich. It is to be located on the old Ashmount School site in Islington. See more here.

They recently advertised for Governors: (Closing date for applications: 6pm Friday 24th January 2014. -Interviews: Early February 2014, so readers of this blog have missed their chance).

In their ad they wrote:

"Our school will be from the community, for the community, governed by the community"

Does anyone see any irony in a company controlled by a Zurich based hedge fund, talking about the school being "from the community, for the community, GOVERNED BY THE COMMUNITY"?

They further write:

"To strongly support excellence in teaching and learning, two of the fundamental elements of the success of Whitehall Park School will be the strength of its governance and its links with the community. This cannot happen without your help."

(The context for this is their observation in briefing meetings that the new Free School believes in involving parents and the community unlike (they say) other local state financed schools described as being "under the control of Labour Islington")

The Role of the Chair at Whitehall Park School:

They then provide a detailed role description for the job of Chair of Governors and list the desirable qualities for candidates for appointment as chair. The job description and key abilities required need not be repeated here as they are broadly the standard ones from DfE guidance, except for a crucial point which they highlight as the first line in the job description. The Chair is to be:-

"Accountable to the Trust Board"

And not to the Governing Body they chair. So not only will the chair be appointed by Bellevue, rather than, as in Community Schools, elected by the Governing Body, the chair is also formally accountable to Bellevue and not to the Governing Body. Now this really matters as the Chair of Whitehall Park School, in the usual way of Chairs of state school Governing Bodies has been given power of "Chair's action".

As DfE guidance explains:

" The chair or vice-chair has the power to carry out functions of the governing body if a delay in exercising a function is likely to be seriously detrimental to the interests of the school, a pupil at the school or their parents, or a person who works at the school."

Which is a pretty important power, especially when the full Governing Body meets only three times a year - (a common interval, and the one Bellevue have said they will adopt).

In my own experience as Chair, uses of Chair's action always had to be reported to the Governing Body as quickly as possible (email good for this) and then formally noted at the next full Governing Body meeting which had the power to rescind it if they wished. Being accountable to the Governing Body in this way was an important check on the Chair, and I was always aware of it. I was also subject to annual election.

The Whitehall Park Chair also has this power of Chair's Action but is accountable for its use to Bellevue and not the GB, which has no power to rescind. And Bellevue appoint the Chair anyway. Who between thrice yearly Governing Body meetings can take Chair's action on any matter within the GB's remit, and is accountable to Bellevue for this and not the Governors.

Perhaps its relevant that Bellevue have added to the usual duties of a Chair an additional one:

"The chair leads the governing body"

And no doubt, the person they appoint will.

THE OTHER GOVERNORS

Next they provide a detailed role description for the less demanding post of ordinary governor, which appears to cover not only the Governors they directly appoint, which, by law, is a majority of the Governing Body, but also any staff or parent representatives (Parents are allowed to elect two governors). This again is pretty standard except for the first line of the job description, which is not. It reads that governors are:

"Accountable to the Chair of the Governing Body."

So the Chair is accountable to Bellevue, and the Governors are all accountable to the Chair. So all quite nicely tied up then.

But there is more.

" All governors are expected to meet the Seven Principles of Public Life, defined by the Nolan Committee in 2013" And who could disagree with that?

Finally they write:

"The appointed candidate will need to receive Department for Education (DfE) approval from an Enhanced Disclosure and Barring Service (DBS (E)) clearance check (no cost), plus additional checks from the Trust (Bellevue Place Education Trust) to ensure candidate’s views align broadly with that of the Trust’s."

But nowhere do they say what the Trust's views are that the candidates views are to "align with"

Does anyone have any suggestions as to what these "views" might be? And also is there any possibility that this might limit the independence of governors? Is there any conflict with the first Nolan principle?

("Selflessness: Holders of public office should act solely in terms of the public interest.")

And, in particular, where does this leave elected parent governors who are it seems, only to be acceptable, if their "views" "align" with that of a foreign owned commercial company?

And who are to be "accountable" to the Chair and not their constituents?
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Comments

Brian's picture
Mon, 24/02/2014 - 19:58

Very interesting and illuminating post David.

Would it be going too far to say that the governors are, in effect, employees of Bellevue and will, therefore, do as they are told.

David Barry's picture
Mon, 24/02/2014 - 22:26

So far Bellevue have opened one Free School already, it opened last autumn. It is Rutherford House School, in Balham. The person who was introduced at meetings about the Whitehall Park School as Chair of Governors at Rutherford House was actually a Bellevue Ltd. paid employee....

(I mention her here: http://www.localschoolsnetwork.org.uk/2014/01/whitehall-park-school-the-... )

However apart from other such governors as may also happen to be Bellevue Ltd. employees, strictly Brian it would be

"going too far to say that the governors are, in effect, employees of Bellevue"

as they will be unpaid volunteers! And this is stressed by Bellevue

"This is a voluntary post and is un-remunerated"

Employees have certain rights under employment law. These volunteers, because they are volunteers, have none....


Brian's picture
Mon, 24/02/2014 - 22:38

Given that the governors have to hold views which align with those of Bellevue it strikes me that they are de facto employees, albeit unpaid, but not de jure. Without, as you state, any rights other than to do as they are told. Interestingly this contrasts with the big bad controlling local authorities. I recently attended a briefing by the LA for its governors. The briefing was in two parts. Part one was statutory changes which governors had to adhere to. Part two was about the policies and principles of the LA ... it started with asking governors to note that, as LA appointees, they would be expected to 'be aware of and consider these principles and policies. However we do not expect you to always agree with them and you must make decisions which you consider to be in the best interests of the the pupils in your school. Sometimes these might not coincide with the wider aims of the LA as we recognise all schools are different.'


Brian's picture
Mon, 24/02/2014 - 22:46

Interesting that the DfE has the power to confiscate a valuable local asset and gift it to a private profit making company.


Janet Downs's picture
Tue, 25/02/2014 - 09:16

Brian - the DfE's got form on this. For example, Warrington council felt "pressurized" to hand over part of a school playing field as a site of a proposed free school, King's Leadership Academy.

http://www.localschoolsnetwork.org.uk/2012/09/controversy-surrounds-new-...

Jay's picture
Tue, 25/02/2014 - 11:08

David Barry - you say the chair of governors at Rutherford House is a woman and an employee of Bellevue Ltd.

According to their website, the chair of governors is a (male) officer in the Fleet Air Arm who currently works at the MoD.

You also say "the proposers {of Whitehall Park} are a for-profit company, Bellevue Ltd".

Are you sure this is accurate? On another thread you identify the sponsor as Bellevue Place Education Trust (a charitable trust). This latter would be more normal. I don't think for-profits can propose free schools.

Janet Downs's picture
Tue, 25/02/2014 - 12:27

Jay - you're correct that the chair of governors at Rutherford House is now a man, James Walker.

The trust behind the school is Bellevue Place Education Trust, a charitable trust. However, two of its directors are also directors of Place Group which offers services to schools. A third director is a director of Bellevue Education Group which has ten subsidiaries including Bellevue Educational Services and Bellevue Schools. These are all for-profit companies.

The parent company of Bellevue Education Group is Bellevue Education International

http://blvue.com/

According to Education Investor, a major shareholder in Bellevue Educational Group is Plato One Ltd (a Hong Kong listed company)

http://www.educationinvestor.co.uk/ShowArticle.aspx?ID=3012

http://www.companies-hongkong.com/plato-one-limited-vyj4/

According to this redacted document (2012) from Companies in the UK, Bellevue Education released shares to Plato One and Plato Two, both Hong Kong companies.

http://www.companiesintheuk.co.uk/company/documentextract/56750437

http://www.companies-hongkong.com/plato-two-limited-zwbb/

You can see how tangled these companies are.

Barry Wise's picture
Wed, 26/02/2014 - 16:30

It doesn't seem in the slightest bit tangled to me.Bellevue comes down essentially to two individuals: Mark Malley ( former headmaster ) and Marwan Naja (ex-banker turned education investor). Er.... that's it. I've seen parent teacher associations with a more complex power structure.


David Barry's picture
Tue, 25/02/2014 - 12:44

Jay:

Your query about who the Chair at Rutherford House was sent me back to my notes:

The person introduced to a public meeting held by Bellevue on Thursday 10th October 2013 as the Chair of Governors at Rutherford School, was a woman, whose name, unfortunately, I cannot find in my notes of the meeting, and she was further described as an employee of Bellevue Ltd. (Which fact , in context, was used as an indication of the commitment of Bellevue Ltd to Rutherford House School)

I imagine , that having used one of their employees as the founding Chair, it would be not at all an unusual thing for someone else to be Chair now, especially if they got a congenial (to Bellevue Ltd) volunteer for the post.

rogertitcombe's picture
Tue, 25/02/2014 - 14:23

However they might be dressed up, these are the basic principles that that appear to apply to all Academy governors. They are directly or indirectly under the control of the Board of Directors.

An interesting parallel is the status of elected NHS hospital Foundation Trust governors. These are elected on a geographical basis by 'members' who comprise anybody who is interested enough to register with the Trust as a member. FT governors have no executive powers with regard to the decisions of the Trust Board of Directors, but they do with regard to the Trust Chair. The Chair is answerable to the governors and can in theory be dismissed by them.

I think it is a normal assumption of both corporate and public governance that the Chair is answerable to some sort of elected or otherwise representative constituency.

I wonder if the lack of such accountability of Academy and Free School Chairs could be legally challenged.

Janet Downs's picture
Thu, 27/02/2014 - 15:51

Barry - there are three directors at Bellevue Place Education Trust: two also directors of Place Group, the other a director of Bellevue Education Group which as I said above has ten subsidiaries, all private limited companies with shareholders. Follow the money, as they say.


Liz's picture
Sun, 09/11/2014 - 14:40

Janet, I think you've mixed up "Bellevue Group" , which is indeed a Zurich based financial group with a hedge fund arm with "Belevue Education" which is a UK based company with a Hong-Kong investor. They are two completely different organisations.


Janet Downs's picture
Sun, 09/11/2014 - 15:53

Liz - there is indeed some confusion. However, I have never claimed that Bellevue Education Group Ltd and the Zurich based Bellevue Group are the same organisation. Bellevue Education Group Ltd is a UK based company with a Hong Kong investor as made clear in the company accounts to August 2011:

'The immediate parent and ultimate controlling parties of Bellevue Education Group Limited are Mark Malley and Plato One Limited (ll#_]#f#Ty shareholder), a Company registered in Hong Kong and controlled by Mr Marwan Naja.'

Bellevue Education Group Ltd owns Swiss boarding schools as well as UK based independent schools. It also runs three state-funded free schools although, in theory, these will be run by a charitable trust Bellevue Place Education Trust which comprises two for-profit firms: Bellevue Education Group Ltd and Place Group Ltd as the website of Whitehall Park School makes clear.


Liz's picture
Sun, 09/11/2014 - 23:04

Actually you did Janet. Your original article says "The main shareholders of Bellevue are a hedge fund based in Zurich. ......Does anyone see any irony in a company controlled by a Zurich based hedge fund, talking about the school being “from the community". However, Bellevue Education does not have a Zurich hedgefund as its major shareholder at all. It has a Hong Kong businessman as its major shareholder and Chairman, and the rest of it (35%) is owned by its founder Mark Malley, a prep-school headmaster.

(Bellevue Group are associated with a Zurich hedgefund, which is presumably the source of your confusion, but they are a completely different company).

Janet Downs's picture
Mon, 10/11/2014 - 12:56

Liz - I didn't write the headline article. My only comment about the ownership of Bellevue Education Group Ltd was in my answer to Jay on 25/2/14 at 12.27pm and did not link Bellevue Education Group Ltd with the Zurich based Bellevue Group.

The question really is not how Bellevue Education Group Ltd can be confused with a company with almost the same name (although, I repeat, I did not make that connection) but how a charitable educational trust, Bellevue Place Education Trust can actually comprise two for-profit firms as is claimed on the website of one of Bellevue Education Group Ltd's schools. While I understand that charities can have for-profit trading arms, I'm at a loss to explain how a charity can actually be made up of for-profit companies. It's a bit like, say, Oxfam saying it's made up of Kraft Foods and McDonalds.

Barry Wise's picture
Mon, 10/11/2014 - 15:24

For Zurich, read Geneva.
For hedge fund, read private equity.
For Bellevue, read Manixer.

http://www.manixer.com/

Liz's picture
Mon, 10/11/2014 - 15:46

Ah, yes, sorry Janet, that should have been addressed to David Barry.

However, I disagree with you that the charity is "made up of" for-profit companies. More correctly, it was "set up by" for-profit companies. So, using your analogy, it's more like Kraft Foods and McDonalds joining forces to set up Oxfam, and putting their own directors on the board in order to have control over its development. However, that's not a very good analogy, because Kraft Foods and McDonalds have no expertise in the Humanitarian Aid sector, whereas the two companies that have set up Bellevue Place do have expertise in the education sector.

Of course we can't know the company's motivations for wanting to enter the non-profit free school sector. It could be purely altruistic (that's a perfectly reasonable explanation, and you're prejudiced by your politics if you think otherwise), or, less nobly, they could be attracted by the idea that free schools might be allowed to make a profit in the future.

rogertitcombe's picture
Mon, 10/11/2014 - 16:01

Liz - We are all 'prejudiced by our politics', you included. A commercial operation that sets up schools whose governors and chair are vetted by the company, while the taxpayer foots all the bills doesn't seem like a good deal for parents or pupils to me.

I would expect publicly funded schools to be democratically accountable to the public and to have independent governance arrangements in line with other publicly funded institutions.

But then I must be prejudiced by my politics to think that such an expectation is both reasonable and necessary.

Liz's picture
Mon, 10/11/2014 - 16:33

In reply to Barry Wise (below):

It looks like the Hong Kong investor I referred to (who is Bellevue Education’s Chairman) moved his money from Hong Kong to Geneva, because it’s the same guy. Its his Hong Kong funds that are reported as the major shareholders online (http://companycheck.co.uk/company/08028529/BELLEVUE-EDUCATION-INTERNATIO...), but perhaps that’s now out of date.

Yes, it’s private equity – the entrepreneurial prep-school headmaster found himself a rich financial backer with an interest in the education sector and they’re expanding rapidly. Wikipedia has a comprehensive history: https://en.wikipedia.org/wiki/Bellevue_Education.

In reply to Roger Titcombe (also below):

It’s possible to neutralise political prejudice by sticking to the facts and avoiding value judgements.

Janet Downs's picture
Mon, 10/11/2014 - 17:01

Thanks, Barry. It appears that Bellevue Education is connected with a Swiss-based firm 'focused on value-add investing and corporate advisory in private companies.' What David got wrong initially was basing it in Zurich not Geneva.

Liz - the two for-profit companies may indeed have had experience in education but one of them has never actually educated any children. It's been involved in academy conversion, consultation and PR which is not the same thing as having experience of teaching. I'm not sure that meets your definition of 'Humanitarian Aid'.

In 2008, Sam Freedman, who later became one of Michael Gove's advisers (he's now with Teach First) said when for-profit education providers got involved in education:

"They are not interested for altruistic reasons. It's an investment...Soon you'll see organisations given money to run schools rather than them sponsoring academies."

The last part of that statement has already come true. Academy chains receive public money for running their academies (and not always well - E-Act operated in a culture of extravagance; the biggest chain, AET, has been told to get its finances in order; and millions of pounds of taxpayers' money has found its way to companies linked to academy trustees).

Michael Gove made it clear before the last election that he would be happy to see groups like Serco running schools. See my latest thread for links to the evidence.


rogertitcombe's picture
Mon, 10/11/2014 - 17:14

Liz - Are the unacceptable governance practices described in this thread facts or not?


Liz's picture
Mon, 10/11/2014 - 21:06

"What David got wrong initially was basing it in Zurich not Geneva"

Janet no, I strongly suspect he was referring to the Zurich based company "Bellevue Group", which has a hedge fund arm. It's an easy mistake to make.

If Bellevue Education was owned by a hedge fund, I'd be a lot more worried than it being owned (and built up more-or-less from scratch) by a private entrepreneur with an interest in investing in education, who takes an active interest as Chairman of the company. Ok, so he might get bored of education at some point, and sell off his shares, but it's less likely to happen than a hedge fund offloading a non-profitable portfolio.

Janet Downs's picture
Tue, 11/11/2014 - 14:26

Liz - you're right that confusing Bellevue Group in Zurich with Bellevue Education Group Ltd with connections to Geneva is an easy mistake to make.

You say you'd be concerned in Bellevue Education was owned by a firm with links to a hedge fund because such firms have a history of dumping non-profitable parts of their investment. This concern isn't just for firms with hedge funds but to any firm whose main interest is in making a profit. Southern Cross Healthcare, for example, dumped its care homes when the hoped-for profit didn't materialise. Last year, JB Education, owned by Axcel, a private equity firm, folded leaving 10,000 students to in Sweden to find other schools. In 2007, Swedish TV channel had discovered how the founder of JB Education had become a millionaire 'despite the schools' many shortcomings'.

Couldn't happen here? IES Breckland, a free school in Suffolk, is run by the English arm of Internationella Engelska Skolan (IES), the Swedish for-profit education provider. IES is owned by TA Associates, a Boston-based private equity firm which has a stake in hedge fund manager Evanston Capital Management. In theory, Sabres Educational Trust is the charity running IES Breckland but Private Eye asked if Sabres was just a 'powerless conduit' for the DfE to send money to IES.

Wey Education Ltd/Zail Enterprises Ltd admitted it set up its charitable arm, Wey Education Schools Trust, as a 'vehicle' by which the company's shareholders could make a profit.

And Prospects Academies Trust has already closed down leaving six academies in limbo. According to Private Eye, ex-schools minister Lord Hill had overruled civil servants and allowed Prospects to take on more academies when Prospects' managing director complained the DfE attitude was “unhelpful” because it was “having a negative impact” on the Trust’s “commercial operation”.

So the portents are there - academies are likely to be closed if the for-profit firms behind the charitable arms find they're not making much profit out of them. Remember, it's not altruism - it's an investment.

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