/ NUT BRIEFING ON ACADEMY SPONSORS UNDER THE COALITION GOVERNMENT
February 2013

Introduction

This document explains the Government’s approach to academy sponsors. It focuses on the process by which organisations can become academy sponsors and the potential funding available to new and existing sponsors from April 2013.

Background

  • A sponsor runs an academy through an academy trust which has the power to appoint the head teacher and the board of governors. The sponsor is directly accountable to central Government though a Funding Agreement: a legally binding contract between the Secretary of State and the academy trust. The Funding Agreement provides the framework within which the academy must operate.
  • At the time of the May 2010 election there were 203 sponsored secondary academies open and a large number in the pipeline. These were established under the previous Labour Government. Under the Coalition Government the sponsored academy programme has continued to expand. At the start of February 2013 their number stood at 618.
  • Schools which are judged to be “underperforming” are those targeted for the forced academy programme.
  • Academies have access to three types of funding: initial grants for the pre-opening plans to establish an academy; capital grant for buildings; and funding for running costs once the academy is open.
  • This briefing will outline pre-opening and sponsor development funding that is specifically available to sponsors and sponsored academies, and that is in addition to the revenue funding and capital grants available to all schools.
  • The NUT has prepared a briefing about funding for academies as a whole which is available at:

Academy sponsors under the Coalition Government

  • The number and profile of academy sponsors changes from month to month as the DfE approves new organisations and as new sponsors take on more schools.
  • Existing sponsor organisations range from large academy chains, universities, secondary and primary schools, grammar schools, further education institutions, diocese, businesses and individual “philanthropists”.
  • On 1 February 2013, ten sponsoring organisations were responsible for 210 of the 618 open sponsored academieswhile a third of all academy sponsors were responsible for just one open school.
  • The largest academy chain, the Academies Enterprise Trust, was responsible for 52 schools at the start of February 2013. Many approved sponsors are schools and academies that have themselves become sponsors, bringing other schools into a single multi-academy trust.
  • The Government is actively seeking to increase the number and size of sponsors and has recently announced a fund to provide up-front funding for the development and expansion of prospective and existing sponsors (see below).
  • “Sponsor brokers” working in the Office of the Schools Commissioner (OSC) are responsible for matching approved sponsors to “suitable” projects i.e. so-called “underperforming schools”. However, the process for appointing sponsors to schools is entirely opaque and has been characterised as a “beauty parade”.[1] The Royal Society of the Arts (RSA) Academies Commission report into academisation called for a sponsor “selection process that is open, fair, rigorous and supported by clear criteria”.[2]
  • The DfE does not publish a comprehensive list of approved sponsors. However, lists (by region) of approved sponsors that have consented to have their contact details published online are available at:

Accountability

  • The DfE says that “Sponsors are held accountable for improving the performance of their schools”. However, while individual sponsored academies are held accountable in the same ways as maintained schools, there is no formal process or mechanism for ensuring accountability at the sponsor level.

Becoming an academy sponsor

  • The application process to become a sponsor has been described as “very light touch” by DfE officials and could take only a week to complete.[3]
  • The DfE guidance states thatanorganisation interested in becoming an approved sponsor should send an initial “expression of interest”via email to the OSC.Prospective sponsors must demonstrate an understanding of the role of an academy sponsor andoutlineprevious experience or plans to work with an underperforming school or schools.
  • If the prospective sponsor is an academy then they must provide their last four years’ attainment data; show English and maths progression data; and the most recent Ofsted ‘grade’.
  • If the prospective sponsor is not a school then they must outline evidence of capacity and capability to deliver “educational aims and objectives”. This could include details of previous experience of working with an “underperforming” school(s) or any plans to work with third party organisations such as educational consultancies, universities, FE colleges etc. The DfE guidance also says that the expression of interest email can contain “any other helpful information” such as “track record of success in your particular sector”.
  • This initial email will result in the prospective sponsor being contacted by a sponsor broker from the OSC to discuss the applicant’s suitability, experience, plans and capacity in more detail.According to the DfE’s website, the OSC will also carry out unspecified “suitability and vetting tests”.
  • DfE guidance suggests that discussions between the OSCand a prospective sponsor could include potential projects from an early stage: “When you contact the Office of the Schools Commissioner to say you would like to become a sponsor, a broker will talk to you about your ideas and what is involved. We will work with you and local authorities to identify suitable schools for you to sponsor.”
  • New sponsors can also apply for financial assistance to “build capacity” (the Sponsor Capacity Fund - see below) at the same time as they are applying to become a sponsor.

Development funding and support for sponsored academies

  • Sponsor organisations receive money to fund the establishment of a new sponsored academy. The money is paid to the academy trust which is set up and controlled by the sponsor.
  • The amount of additional funding available to sponsored academies will depend on the DfE’s assessment of the level of support that the school needs in order to become an academy. The DfE uses the terms “fast-track” (for a school seen as requiring less intensive support), and “full” (for a school deemed to need more intensive support and redevelopment) to describe the two different routes by which a school becomes a sponsored academy.
  • The following funding arrangements were announced in September 2012 and are in place for full-sponsored academies which have been brokered to open from April 2013. Academies already in the pipeline will be funded under the previous arrangements.For full-sponsored academies separate variable project development and lead-in grants have been replaced with a flat-rate pre-opening grant. Funding available for fast-track sponsored academiesremains the same as before.
  • In both cases the sponsor organisation does not take responsibility for any deficit run up by the school before conversion. This remains with the local authority once the school becomes an academy.
  • The DfE says that the changes to development funding are intended to reduce bureaucracy and save time. The NUT believes that funding to academy sponsors should be transparent. It is notable that the new arrangements give more discretion to academy trusts, and hence sponsors, to spend the money as they see fit and that unspent funds can be rolled over. The NUT is concerned that academy sponsors will be less accountable for the use of funds than community schools and that these additional sums could be used as inducements by academy chains.

Full-sponsored academies

  • Before opening the academy trust will receive a project development grant to cover curriculum development, legal advice, project management and early appointment of key staff. This money is released once the Academy Action Plan (AAP) – effectively a business casesetting out “the sponsor’s vision for the school, how they will fulfil that vision, and how they will run the school” – is approved by the DfE.
  • Primary academies will receive £120,000 and secondary academies will receive £200,000.Any funds which the academy trust does not spend can be carried over for use in the academy after opening.In addition the DfE will also fund staff restructuring costs on a case-by-case basis.
  • After opening the academy trust receives a single grant composed of two elements: resources (books, material, equipment, etc) and “leadership or other costs” to help build up student numbers. In both cases funding is not ring-fenced so the academy can spend the money as it sees fit.
  • Primary academies receive £25,000 for one form entry and £50,000 for larger academies to pay for resources while secondary-sponsored academies receive £150 per pupil.
  • Money is also available to help build up student numbers in schools that are significantly below capacity. Grants will be provided for up to three years after the academy opens and arecalculated according to the extent to which the academy is under capacity, declining as the school fills up. Sponsored primary academies will get a flat-rate grant between £10,000 and £135,000. The grant is allocated in 10 per cent bands: schools with 80-90 per cent capacity receive the lowest amount, while the highest amount is available to schools with 30-40 per cent of capacity.
  • Sponsored secondary academies will get £18,000 for every percentage point the academy is under capacity, up to a maximum of 90 per cent.
  • The DfE may also provide single flat-rate grants for “environmental improvement” (capital development) in sponsored academies: £50,000 for primary-sponsored academies and £100,000 for secondary sponsored academies. The decision to award a capital grant is made during the academy Action Plan stage i.e. before the project is officially signed off by the DfE. These grants are in addition to any other capital funding including the academiesCapital Maintenance Fund which is available to all academies (but not maintained schools) once they are open.Academies may not receive this funding if the school has already received recent capital funding.

Fast-tracksponsored academies

  • For fast-track sponsored academies the academy trust receives £25,000 towards conversion costs. This is the same funding that converter academies receive and remains the same as previously.
  • The academy trust will also receive up to £40,000 for primary schools or up to £65,000 for secondary schools to be used on school improvement. Funding can be used “flexibly” by the academy trust.
  • Unlike full-sponsored academies, there is no additional funding for staff restructuring or minor capital works and no post-opening start-up grants.

Sponsor Capacity Fund

  • In September 2012 the DfE announced the creation of the Sponsor Capacity Fund aimed at increasing the “capacity of high-quality organisations to sponsor underperforming schools”.
  • Funding is available to organisations planning to sponsor their first school by September 2013 but also to existing sponsors that want to increase their capacity “so that they can take on more schools, more quickly”. For new sponsoring organisations, the DfE says that applications to the fund will be considered alongside an assessment of suitability to become a sponsor. Existing sponsors interested in the fund are able to discuss this with “their Sponsor Development Adviser” within the OSC.[4]
  • The grant can be spent on set up costs (legal, accountancy or HR advice, admin support), infrastructure costs, and also used to contribute to the salary costs of “key individuals”.
  • The DfE says that applications to the fund are assessed on the basis of “need in the area in which the sponsor is proposing to operate” as well as a variety of other factors including “whether the organisation will make the local sponsor pool more diverse”; value for money; and the extent to which the sponsor has access to alternative funding.
  • Funding is available during the 2012-13 financial year only.The DfE says that the available funding is limited but has not publicly stated the overall amount or provided details of the potential size of individual allocations.

NUT BRIEFING ON ACADEMY SPONSORS1

[1]Robert Hill, “The missing middle: the case for school commissioners”, RSA projects, July 2012, p. 20.

[2]The Academies Commission, “Unleashing greatness: Getting the best from an academised system”, January 2013, p. 9.

[3]“Be 'friendly option' for primaries, colleges urged”, TES, 05.12.12.

[4]According to the DfE, Sponsor Development Advisers (SDAs) "work directly with academy sponsors and school brokers within local authorities (LAs) during the first stages of the development of each new academy”. They are responsible for “ensuring sufficient high quality academy sponsors are available in areas across the country” and “will identify, validate and manage sponsors for each project”. Each Adviser is a lead contact for around 15 sponsors.