The Academies Enterprise Trust (AET), one of the chains barred from taking on any more academies, has been sent a Financial Notice to Improve
(FNtI) by the Education Funding Agency (EFA). This follows further Ofsted criticism
of AET academies following focused inspections in June: ‘too many pupils in the Trust are not receiving a good enough education.’
AET is the largest multi-academy trust
having grown rapidly since the Coalition came to power. In 2011, ex-education secretary Michael Gove said he wanted chains to grow ‘at the fastest sustainable rate’
. Even at the time it seemed a reckless comment. In retrospect, it was dangerously foolish.
The EFA noted ‘an improvement’ in AET’s overall financial state. However, the EFA still had serious concerns about ‘volatility’ apparent in financial projections and lack of confidence in AET’s ability ‘to secure finances across the group’. The Agency has revoked all ‘delegated authorities’ listed in the Academies Financial Handbook – all these transactions must now come to the EFA for approval.
This raises a serious question: what action will the EFA take about the proposed contract, worth £400m over ten years, between AET and PriceWaterhousCoopers (PWC)
which would outsource all backroom services
in AET academies to PWC. Alex Cunningham MP, a member of the Education Select Committee, has already described his proposal has been described as a ‘huge step towards a huge privatization
’ over a range of school services. Will the EFA allow this outsourcing to go ahead?
A second question is whether AET will be required to lose some of its academies as E-Act has had to do. This raises yet more questions:
1How much does it cost the taxpayer when academies are shunted from sponsor to sponsor?
2Where is the stability of provision if schools change hands every couple of years or so? New sponsors usually want to stamp their own ‘brand’, culture and ethos on their academies – this costs money and has the potential to interrupt pupils’ education.
Financial Notices to Improve issued since June 2014
July 2014: Royston Academies Trust
has a forecast deficit of up to £800,000 over the next three years. The EFA will provide £650,000 ‘deficit funding’ over and above the £150,000 already given to the Trust to avoid insolvency in 2013/14.
August 2014: Visions Learning Trust
opened a University Technology College in Burnley in September 2013. The EFA has given ‘substantial repayable support’ of £160,000 for 2013/14 and £230,000 for 2014/15. A further advance of £95,000 would be needed for 2015/16. The Trust was unable to balance its budget and didn’t submit final audited accounts for 2012/13 by the December 2013 deadline.
August 2014. Hadlow Rural Community School
. EFA criticised the trust of this free school, which opened in September 2013, for 'inadequate management of the delivery of its capital new-build project' and for not submitting required financial documents.
September 2014: E-Act receives a second FNtL
. This requires the Trust to list the actions needed to address continued and additional weaknesses.
October 2014: Enterprise South Liverpool Academy Trust
is listed as having received a FNtL on 15 October 2014
. But the EFA link goes to a letter dated 24 June 2013. This raises the question of why it took so long to appear on the EFA website*. The EFA identified a ‘significant deficit position of up to £2.578 million over the next three years’. Emergency deficit funding of £265,000 had been provided to avoid insolvency in 2012/13. The EFA will provide further deficit funding of £1,909,000 – the EFA intends to recover £820,000 of this. The academy, which cost £24m, was officially opened by Prince Edward
on 8 September.
October 2014: Sawtry Community College (see here
*NOTE The EFA
says it would ‘publish in all but the most exceptional circumstances and may consider not publishing or publishing after a period of time has passed if it is not in the public interest. For example, if publication could prejudice a police investigation or have an acute detrimental impact on a particular individual or group of individuals or risk their personal safety.’ It’s still unclear why the FNtL for Enterprise South Liverpool Academy Trust wasn’t published as soon as possible after June 2013.
The original headline has been amended to make it clear that AET was the largest multi-academy trust. This addition removes any ambiguity.