Academies  have been  getting extra funding-so why the smoke and mirrors?


Half of all secondary schools in England are either Academies or in the process of converting- over 1400 in all.

Last September Chris Cook of the Financial Times  asked one school Headmaster why his school was converting to Academy status. He said: “A conservatory”.

This is not an apocryphal story and manages to sum up why some  schools have converted to Academy status. Extra money. This was  confirmed by  a  recent survey conducted by the Reform think tank and published in March this year. It found that  more than one-third of schools in the government’s academy converter programme have cited additional money as their primary reason for taking part.  Also, in  a survey of almost 1,500 schools carried out last year by the Association of School and College Leaders, seven out of 10 cited financial gain as a reason for converting.

The stated purpose of the Academy scheme has never been to grant schools additional funds. It has been to give them new freedoms and   real autonomy,  so they can manage their own affairs, free from Local authority bureaucracy, to help raise performance. (and not to disadvantage other neighbouring schools through a two tier funding system)

The findings are in marked  contrast to the government’s claims that schools were not converting to academy status to receive this extra funding. Academy institutions, funded directly by the central government as opposed to local authorities, are supposed to be financed at the same level as other local schools. The principle behind academy funding is  pretty straightforward: every child gets the same spending, whether they attend an LA school or an academy. But  Heads and governing bodies know that this has simply not been the case.  Many who support the Academy scheme  and who believe that academies really do represent a lever to bring about systemic change and improvement , fear that schools which jumped to become academies for the cash windfall may not have the strength or depth  of leadership required to stand alone and so  may serve to undermine the whole reform programme.

Chris Cook , of the FT ,explains the funding  system as follows:

‘LAs spend money on things for LA schools, like pupil transport: so-called “central services”. If you are an academy, however, you have to provide some of these services yourself. So you get grants in lieu of those services which should equal the amount paid for those services: the Local Authority Central Services Equivalent Grant – or Lacseg. The problem arises because, for reasons that are unclear, the DfE sets these totals months before it knows how much LAs will actually spend in each area .Then, even if it discovers that its estimates are clearly wrong, it refuses to correct them’

Cook gives an example. Islington. He writes ‘So we know that the DfE estimated the Lacseg should be £551 for a pupil in Islington in 2011-12. But, in truth, the LA was only spending £219. This means a 1,000 pupil secondary would enjoys a £332,000 overpayment from converting to become an academy.’

Cook adds that the uplifts were bigger generally  for schools that converted in 2010-11 — and were sometimes so large that the DfE decided it could not correct them in one go. Those schools are continuing to be overpaid. Cook suggests that this  is ‘daft’ and if the DfE paid a flat fee of about £200 to all academies, it would be a more accurate mechanism with smaller errors than their attempts at localised estimates.

This, of course, raises a number of issues. First, the reality is that if you convert to Academy status, you get more funds,  and that has been  the case until now . Secondly the the funding system is very complex, unfair and wasteful, at a time when funding  is  particularly  tight. Some schools feel rather hard done by.

Most worrying perhaps, for reformers at least, is what motivates schools to convert. If it really is just about getting access to more funds, rather than winning and using new freedoms and autonomy, then isn’t there a danger that schools will simply continue as usual  rather than bring in changes and innovative approaches  that might serve to   improve their schools and the system as a whole?

And the funding system seems already to be changing.  Academies look unlikely to receive, in the future, as much as they have in the past.  Local authorities have changed the way they do their annual spending returns – known as ‘section 251’ returns. As Fran Abrams writes in the Guardian this week ‘councils have quickly adapted to this new use of their existing data, and have started to make their calculations differently. Broadly, what they have done is to remove money from the central, catch-all pot and label it instead as being for a specific purpose, thereby reducing the total amount from which academies get their cut.’ So it  may  well be the case  that the financial benefits of converting to Academy status are already on a downward trajectory.

But , crucially, they will still have their new freedoms.   And, by the end of this Parliament, a substantial majority of secondary schools will be Academies.


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