Academy chains prove to be a lucrative business

Fiona Millar's picture
Here is an interesting story, from the Yorkshire Post newspaper, which sheds some light onto the  web of financial arrangements enjoyed by the chains now entering the schools market. The particular chain named, Outwood Grange Academies Trust, was one of those accredited by Ed Balls when he was Secretary of State for Education. The head teacher of the original Outwood Grange School, Michael Wilkins, by all accounts an excellent school leader, reportedly gets annual salary of £182 000, £40,000 more than the Prime Minister. He also works as a National Leader in Education troubleshooting in other struggling schools, attracting significant payments from other local authorities ( over £1 million in the last four years) which go into the private consultancy company set up by Outwood Grange, which in turn, according to the Yorkshire Post, pays the head teachers' own private company.

In this article from last year on the website of the National College for School Leadership, this approach to financial management in academy chains, is also discussed and endorsed. Indeed Dr Elizabeth Sidwell, now Michael Gove's schools commissioner at the DFE, is quoted enthusing about the 'trading arm' set up at the Haberdashers' Askes chain of schools to  generate funds for consultancy work. According to the article, these funds are then ploughed back into the Haberdashers' Askes academies.

These two articles raise some interesting points. Firstly whether these National Leaders in Education and academy consultants are being paid too much? Obviously going into a challenging school with serious weaknesses is important work, but should the rates for this work be more realistic given the financial climate, and should individual heads be able to profit to such an extent, especially if salaries for their day jobs are set at such a high level? Surely this should be enough to compensate for the other consultancy work done on behalf of the chain. Also should the profits from this work, all paid for by the tax payer, be ploughed back into one school , or a group of schools, or should it come back to the Department to be shared amongst all schools?

Secondly it is clear that, in spite of the claim that the business of setting up and running new schools is charitable work, there  is also a lucrative side to it, especially for the executives concerned, if the charities set up consultancies and trading arms , either offering school improvement advice, or help with getting new schools started. Looking again at the new free school application process ( especially the 'How to apply' section) it is clear, as Toby Young and others have pointed out, that the procedure would be very hard to manage for any single parent or teacher group without the sort of professional support that these consultancies now offer. It seems quite wrong that ,at a time when many schools are agonising over how to shave thousands of pounds off their budgets, without making staff redundant, other schools, their heads, or executives at academy chains,  should be benefiting to such an extent.
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Ros Coffey's picture
Mon, 21/03/2011 - 10:58

I can think of another litigious Head teacher in London who has generated a goodly sum of monies which seem to benefit both him and his school group, this really does not sit well with me.

And I for one find this very sad - state schools should be not for profit organisations - rather than money making enterprises.

I have a couple of solutions:

a) you go and take up consultancy work at another school and the monies get paid directly to you but the equivalent will be removed from your home school salary. Thus ensuring no financial gain or indeed loss by your home school which would appear to be paying you for work that you are not there to do.

b) The consultancy fee goes directly to your home school as they would be suffering the loss of your skills and services while you were consulting for other establishments.

At least with both of these options there would be total transparency and an audit trail that is open for all to witness.

Janet Downs's picture
Mon, 21/03/2011 - 13:29

A headteacher should be a headteacher first and foremost. S/he should not be spending time pursuing outside interests especially when these prove to be a nice little earner, even if the monies are totally ploughed back into schools. In Alberta (a top performing country according to OECD), headteachers meet regularly to share ideas - they don't get paid extra for this but do it because they are professionals and want to improve the system for all pupils.

Anne Timothy's picture
Mon, 28/05/2012 - 14:27

If people are going to take on a consultancy role purely for the financial gain it presents, then we have two problems, we may well foster greed as an acceptable motive for sharing a relatively narrow view of how a school should be run and we may also squeeze out other consultants, such as myself, who have very valuable expertise to offer, who do not earn a lot and who are in the business of progressing school improvement for the benefit of children, parents and teachers.
Recently I learnt that academy chains have the opportunity to top slice funding from other schools, in much the same way as LA's could - this would severely narrow the field of advice on offer and further deplete the dedicated staff in school improvement departments of local authorities.

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