Government plans to force all schools into becoming academies

18 March 2016

Ian Sherburn, partner, takes a look at this week’s budget announcement about government plans to force all schools into becoming academies by 2022 - particularly the question of whether schools should become part of a Multi Academy Trust (MAT) or become an independent academy.

This week’s budget announcement about government plans to force all schools into becoming academies by 2022, has certainly generated debate within the press and education sector. It appears the main question is whether schools should become part of a Multi Academy Trust (MAT) or become an independent academy.

Prior to the budget, government policy was to encourage the majority of schools to become part of a Multi Academy Trust (MAT). This emphasis represented a significant shift in policy from the original intentions underlying The Academies Act 2010, in which schools were encouraged to become single academy converters. However, the budget announcement has not made it any clearer which route schools should take to convert to an academy.

Many MATs have been created across the country and prior to the budget we had seen a large increase in instructions to either establish new MATs or to advise schools wishing to join a MAT. At this stage (and depending upon further announcements from government), those schools that have not joined a MAT still have their destiny in their own hands, but the fear is that if they do not make the decision as to which MAT to join, it is possible that this decision will be taken from them.

What is a MAT?

A MAT is a limited company and its board of directors is generally responsible (to the extent not delegated) for the management and running of a number of academies/schools. All of the assets, undertaking and employees of each of those schools are owned/employed by the MAT. The individual schools within the MAT do not retain ‘individual’ legal status and varying powers are delegated to local governing bodies for each school. Indeed, in the smaller regional MATs it is usual for a reasonable level of control to be maintained by the existing school and not ceded to the MAT Board.

Whether a school is converting to a single academy or an academy school is considering being part of a MAT, it is important to get the appropriate advice to support the decision.

What do MATs need to consider if bringing in new schools?

For MATs that are looking to extend and bring in new schools, a number of issues arise which MAT boards should be aware of, namely:

1. Amendment to the MAT’s existing Master Funding Agreement.
2. Drafting a Supplemental Agreement in respect of the incoming school.
3. Drafting a Commercial Transfer Agreement pursuant to which all the assets, undertaking and employees of the incoming school are transferred into the MAT.
4. Employment Advice in particular regarding TUPE.
5. Drafting appropriate transfers of freehold land or lease(s) of land (generally for 125 years) in respect of the incoming school’s property.
6. Constitutional issues have to be addressed i.e. will any of the governors of the incoming school become directors on the board of the MAT? In any event, agreement will have to be reached as to the constitution of the Local Governing Body of that school and the parties will have to agree a Scheme of Delegation between the MAT and the incoming school to set out at which level responsibilities lie for the running and management of the incoming school and which powers are delegated etc.

If you are a school considering joining a MAT, what do you need to know?

For schools which have been approached about joining a MAT, key areas which require consideration and advice are:

1. The establishment of a Local Governing Body;
2. The Scheme of Delegation;
3. Advice on the Commercial Transfer Agreement (from its perspective)/land transfer; and
4. Employment advice.

We currently advise six MATs and we have advised over 35 schools on conversion to academy status, including various schools joining MATs. With a number of our legal experts acting as directors on the boards of some local academies and governors of schools, we have an integral knowledge and understanding of the sector and its challenges.

If you would like further advice and information on converting to academy status or joining a MAT, please contact me and we will be happy to help.

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