Tangled undergrowth at Stem Academy

Janet Downs's picture
The free school which raised eyebrows and provoked a question in the House of Lords about inducements to sign a declaration of interest is again causing controversy. Staff at STEM6 academy, aka Stem Academy Tech City, which opened in September 2013 for 16-19 year-olds, are unhappy about conditions of service.

The body responsible for STEM6 is the Stem Academy Educational Trust. It was set up in February 2012 as Stem Academy but changed its name on 4 September 2013. The Trust is described by Companies House as “Dormant”.

The bid to establish the STEM6 free school was won by the Skills and Development Agency, a not-for-profit company registered as S&DA Ltd*. S&DA has a for-profit subsidiary called the Skills and Development Alliance which is described by Ofsted as:

“… a consortium of nine community-based education and skills providers, offering training primarily across London and closely surrounding areas. Its Skills Funding Agency contract is administered and managed centrally through a management fund which all members contribute to as a percentage of their contract income.”

The Skills and Development Alliance has several partners which offer training. Among these partners are S&DA* and QVQ Ltd* which share the same registered address as the Skills and Development Alliance. One of the directors of Stem Academy Educational Trust is also a director of Skills and Development Alliance, S&DA and QVQ. A second trustee is also director of the Alliance and QVQ.

It appears, then, there’s a tangled web comprising a charitable trust (listed as “dormant”), a not-for-profit enterprise, a for-profit subsidiary and another for-profit firm involved with STEM6. At the same time, STEM6 is being accused of offering unacceptable conditions of service on staff which would inevitably reduce costs for the academy.

This appears to be another example of academy trusts with links to for-profit companies: Sabres Educational Trust and IES; Wey Education Schools Trust and Wey Educational PLC/Zail Enterprises; Bau Federation/Mentora Academies Trust and Bahçeşehir Ugar Educational Institutions; Learning Schools Trust and Kunskapsskolan…

When sponsored academies were first set up under Labour, sponsors were supposed to provide external support and financial help. The National Audit Office 2010 (NAO) found a “significant proportion of academies” hadn’t received the promised money. It also expressed concern about potential conflicts of interest when academies felt pressurised to buy services from their sponsors.

Since then, the number of sponsors has exploded. There are well over 400 on the Department for Education’s approved academy sponsor list. Many of these are linked to for-profit firms which stand to gain from provision of services to academies which are locked into contracts with their sponsors and have no freedom to shop around. NAO 2010 warned that buying services from sponsors may not be the best value-for-money. And when academy trusts appear to reduce overheads by, say, cutting staffing costs, then concerns about conflicts of interest grow exponentially.

*S&DA Ltd is a company “Private limited by guarantee without share capital”. This structure is used by not-for-profit companies. Skills and Development Alliance, a subsidiary of S&DA, is a private company with share capital ie for-profit. QVQ Ltd is also a private company with share capital.

NOTE: I am not against making a profit. Publishers, service providers, IT firms and so on all profit from selling stuff to schools. However, when schools are linked to sponsors which stand to gain from their links with schools, there is a conflict of interest between the educational needs of the pupils and the need for a company to make a profit. As ex-Gove advisor, Sam Freedman, said before the last election: these firms aren’t motivated by altruism but because involvement in schools is an investment.
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