We often reflect on how academies have more cash (at least in the short term) and general advantages than their LA-maintained neighbours. But there are inherent and real dangers of academy status, and systems are being put in place that could in extreme circumstances jeopardise their existence.
1. They are all companies, accountable to Companies House and have to remain solvent in trading terms to continue to survive. There has already been some discussion in the media about how the DfE plugged about £8 million in various academies' annual accounts last year to keep them on a sure footing. But imagine the situation when about 2,000 schools are academies (and upwards of this figure), and quite a lot of them are having financial difficulties. That level of shoring up of accounts becomes unsustainable. In the short term there would be more takeovers by academy chains, to be sure, but in the long term?
2. They all have a direct relationship with the DfE with no local body to protect their interests. I noted recently in the model pro forma financial statements, given out as guidance on financial management to academies by the audit firm RSM Tenon, that the “principal risk and uncertainty” is “government funding”, ie that each academy is ultimately publicly funded. As the document states, “There is no assurance that government policy or practice will remain the same or that public funding will continue at the same levels or on the same terms”. It recommends that this risk is to be mitigated in one or more of three ways (my comments are in brackets after each of the three points):
• by “ensuring funding is derived through a number of direct and indirect contractual arrangements” (opportunities encouraged to engage in non-core [to each school and its pupils] educational activities in order to raise cash?? Teaching schools are a prime example.)
• by “ensuring the academy is rigorous in delivering high quality education and training” (Clear incentive to raise standards [by whatever means?] or face takeover or the chop. NB: FE sector: beware over mention of “training”—looks like schools will have to begin to encroach on classic FE territory in order to keep the head out of the water)
• by putting “considerable focus and investment on maintaining key relationships with the YPLA” (encouraging a “crony culture” with the funding agency as a way of getting preferential treatment)
I think that what convertor academies have failed to realize in their race for the cash on offer and “independence”, is that having a one-to-one with the DfE may not be as cosy, preferential or safe as was anticipated. It will be quite a hard existence—simply because they are companies which can fail--and one that is bound to detract from the core mission of schools, which is education.
3. How long before the first major law suit against an academy, particularly now that there is no opportunity to appeal to the LA (or very soon the local ombudsman) when someone has a complaint? Imagine a powerful, well resourced, parent incensed by a decision made by the school and unable to seek meaningful redress without having to march to Whitehall. That distance could create the fertile ground that could push a parent to go to the law. Any law suit could put a disproportionate strain on a school’s budget and take up valuable time on the part of the SMT—all to the detriment of the school’s core mission and purpose.
4. The amount of “red tape” that an academy has to endure is quite extraordinary, and the Finance Director (not “business manager” or “bursar”, please note, as a finance director is absolutely required by an academy in order to stay afloat) has a tough role navigating his/her way through it. This is in marked contrast to DfE rhetoric about the benefits of autonomy. For example, an external audit of each company (ie academy), is required annually by the Companies Act 2006 (cost, circa £8,000 per year for a large secondary school). This includes a regulatory audit that has to be carried out to ensure probity, as public money is being spent. I recently was at a conference where a headteacher got quite a shock on being informed of this piece of “red tape” for the first time. He had been intending to dole out pay-offs to teachers to get rid of them, but was informed that this would count as an inappropriate use of resources and would not be allowed. Thus, there is still no easy way even for academies to get rid of under-performing teachers. This, obviously, is a problem for every school. But for an academy, it might affect their chances of becoming good/outstanding and thereby withstanding the onslaught of predatory chains……
There is a lot, lot more to be uncovered about academy status, and it is no way as attractive as it possibly appears superficially. So far there are about 1,300 academies, with that number growing. The problem is that the black hole at the DfE is growing as well. Peter Downes, a school funding expert and Camdridgeshire county councilor, has estimated that so far, since the coalition was formed, academies have cost £1 billion to set up, which is why some £450 million is being top-sliced from Local Authority budgets to pay for it (still leaving a giant gap). It seems inconceivable that the academy road-train can continue, as it is simply costing us too much and is unsustainable to roll it out to the other 22,500 or so.
So what will happen? It ‘s not beyond belief that these academies will become like miniature 2-D figures on a giant World War II-style horizontal map standing at DfE HQ, with government ministers and civil servants shunting them around to work out which ones can go, which can be taken over and which can be in the vanguard. There will be winners and losers, and it may make headteachers rue the day that they did not stand together and have faith in a local layer that could take much of the strain of the non-pedagogical, non-core activities off schools’ backs. It might sound dramatic now, but let’s just give it a few years.