Academy control

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Kirsty McAuley of Coodes’ academies team highlights some of the legal issues surrounding the opportunities for the county’s schools to become academies

Business leaders in Cornwall, particularly those with children at school, are very likely to have come across the issue of academies.

Some may be existing governors and others may well be asked to donate their commercial acumen to the boardroom of a new academy.

On 26th May 2010 the Secretary of State for Education, Michael Gove, announced: “the Government is genuinely committed to giving schools greater freedoms. We trust teachers and headteachers to run their schools. We think headteachers know how to run their schools better than bureaucrats or politicians.”

The Academies Act 2010 (“the Act”) was subsequently enacted to give effect to that statement. The Act presently allows any school rated as outstanding or good with outstanding features the freedom to operate independently of local authority control. Schools not rated as outstanding may also be eligible to benefit from conversion if they work in partnership with a high-performing school.

The academy conversion requires a number of legal agreements to be drawn up, including the funding agreement, the commercial transfer agreement and the agreement of a Lease with the Local Authority (or the owner of the school property).

Model legal documents have been drafted by the Department for Education for this purpose but it is imperative that schools obtain legal advice and guidance on the implications of the terms of the agreements.

What is an academy?

The academy is set up as a company limited by guarantee with charitable status and must be incorporated with a minimum of three directors, which will usually comprise of the headteacher, the chair of governors and another party.

Additional directors may be appointed at a later stage, which may include the remaining persons on the board of governors at the maintained school.

Due to the interchangeable use of educational, corporate and charitable terminology, the directors of the academy may also be referred to as governors or trustees and this is particularly evident in the Department for Education guidance and standard documentation.

This should not be confused as directors, governors and trustees all relate to the same role.

How does it operate as a business?

The directors of the newly formed academy have the freedom to negotiate contracts and services acquired on behalf of the school including supplier contracts, employment of staff, legal and financial services etc. In practice this means that the academy, through its directors, is free to make its own decisions regarding the day to day running.

This will clearly be to the benefit of academy schools as they will have the opportunity to enter into the market place and negotiate contracts with third parties. Of course, there is nothing preventing the academy from continuing to use local authority services should they offer the best service and price.

The role of the director is essential and the Act puts control firmly in their hands. Academy conversion is a huge opportunity for governors, headteachers, staff and parents to take control and make it the best possible school it can be.

It is therefore important to appreciate that not only do schools need professional guidance during the conversion process when they will be getting to grips with the new corporate structure, but also to ensure that the new academy is supported by services that will enable the academy to reach its full potential.

www.coodes.co.uk

This article first appeared in the April 2011 issue of Business Cornwall magazine