Technology | 2009.11.30
Are academies just 'a ludicrously expensive con-trick'?
Sponsors have failed to provide the cash pledged to academies, new information reveals, so the taxpayer is left footing the bill
It has always seemed a struggle. The government and its Conservative predecessors have fought what has often appeared a losing battle for 20 years to persuade private sponsors to pump their cash into schools.
But now, new figures have shown just how hard this task has been in relation to academies, Labour\'s flagship school improvement policy. Some 13 of the 90 academies – or one in seven – that are supposed to have been given private sponsorship money for capital building work have yet to see a penny of it, data provided in a parliamentary written answer reveals.
And sponsors in total have so far stumped up barely two-thirds of the £145m they are supposed to have paid towards capital costs in the seven years since the first of England\'s 200 academies opened. This is despite these financial commitments being written into the contracts all academy sponsors had to sign to gain control of decisions on the curriculum, staffing and assets of these quasi-independent institutions, funded mainly by taxpayers.
Those running large chains of academies in some cases have so far paid only a fraction of the amounts pledged. And documents relating to the largest chain of schools, run by the United Learning Trust (ULT) charity, appear to show ministers going to extraordinary lengths to secure the trust\'s continuing support.
The revelations will intensify the debate over the future of state education, with critics arguing that schools have been semi-privatised, with sponsors offering little in return. The sponsors are likely to face fresh calls to meet their pledges in full, even though ministers have now relaxed the rules so that future sponsors will not have to part with any cash.
Existing sponsors point out, however, that in many cases they have funded academies to the tune of millions of pounds.
The academy funding figures are revealed in a parliamentary written answer to the Labour MP Karen Buck. They show that sponsors have paid £98.1m of the £145m they pledged to fund the 90 academies listed in the written answer as expecting sponsorship money for building work.
The ULT, a Christian charity that runs 17 of the schools, has provided just over half of the £20m it promised in capital sponsorship, the figures show. This equates to £10.7m. The first 12 ULT academies are estimated to have cost nearly £300m in government capital funding and sponsorship.
The ULT has yet to pay any of the £950,000 pledged to William Hulme\'s grammar school in Manchester, the answer shows. It has paid only £27,000 each to two academies in Barnsley, south Yorkshire and Walthamstow, east London, which opened in 2006.
Oasis Community Learning, another Christian charity, has paid only £308,000 of the £6m it pledged to sponsor three academies in Enfield, north London, and Grimsby and Immingham, Lincolnshire. Each opened in 2007. Total capital costs for the three are estimated at £82m.
Lord Harris, chairman and chief executive of Carpetright plc, sponsors a chain of nine academies in south London. Seven, for whom sponsorship is listed in the written answer, have so far received £3.7m of the £8.5m pledged.
Figures on individual academies are also revealing. St Paul\'s academy, in Greenwich, south London, which opened in 2005, has been given only £200,000 of the £2m it was pledged by the Roman Catholic Archdiocese of Southwark.
The Harefield academy, in Uxbridge, Middlesex, has received only £700,000 of the £1.5m promised by a group of sponsors led by the cosmetics entrepreneur David Meller before it opened in 2005. The school now says the latest figure is £921,400, with the balance to be paid by April 2010.
Documents on the Department for Children, Schools and Families website make it possible to track the lengths to which ministers have gone in order to help the ULT to sponsor academies.
The ULT has been in the news recently, the Guardian revealing last month that it has been banned from taking on more academies until it improves standards in the ones it already runs. The documents suggest that this represents a worsening of what has been a close relationship between the government and the ULT.
Initial funding agreements, which the ULT signed with the DCSF to open its first three academies in 2003 and 2004, show it promising to pay £2m each towards the capital costs of new schools in Northampton, and Lambeth, south London, and £1.9m to one in Manchester.
But only one – Lambeth – has received the cash in full. The Manchester academy has a shortfall of £386,000 in sponsorship cash, while in Northampton, it is £352,000.
The documents show how the government entered into a series of "side agreements", after the initial contracts were signed, in which ministers agreed to provide extra money to help the trust meet its commitments.
For the Manchester academy, the "side agreement" between the then education secretary, Charles Clarke, and the company set up by the ULT to run the school, says: "The secretary of state recognises that the company is not able to pay its full contribution during the period when capital costs will be incurred."
Therefore, it says, the government will pay an additional amount of £1,503,572 less some professional fees and any sponsorship contributions which the ULT had received from third parties. This money was to be taken back by the government through an annual reduction in the cash the academy received in future for its core budget. The ULT would not incur interest on this loan.
Similar arrangements were made for Northampton academy and academies in Salford, Paddington, west London, and Swindon, for which the government agreed to meet all of the ULT\'s sponsorship commitment in the short term.
In October 2005, this was extended through a "master side agreement" between the government and the ULT, relating to future ULT academies.
In the meantime, the government had also reduced the amount it required the ULT to commit to the sponsorship of academies from £2m to £1.5m each. But for six ULT academies listed in the parliamentary answer, the commitment appears even weaker than this: the company running each school must only make "reasonable endeavours" to raise the sponsorship originally pledged.
Karen Buck MP says she is not against academies, but more information should be made available on their funding. Three academies in her west London constituency had "transformed" educational provision for disadvantaged pupils. She adds: "This is about transparency. If a contract has been signed, I think it is reasonable that we should be told whether the money has been paid. If it is still outstanding, or if it is not going to be paid, on what basis was that decision made?"
For academy sceptics, the picture illustrates the progressive watering down of the financial commitments required of academy sponsors. Paul Holmes, a Liberal Democrat member of the schools select committee and a former teacher, says: "It always was a nonsense that sponsors could buy control of a school for only £2m. At less than that, it is even more ludicrous."
On the "side deals", he adds: "It is outrageous that the government can play fast and loose with taxpayers\' money, agreeing to come up with the sponsorship the sponsor should have paid in the first place. The academies scheme is a ludicrously expensive con-trick."
Pupils in academies are unlikely to have borne the brunt of any sponsorship shortfall, with a lot of government money made available for academy building projects: a National Audit Office report in 2007 found early academies cost £3m more than initially budgeted for, on average, with the government covering extra costs. The ULT says none of its academies\' core budgets has suffered.
Nationally, sponsorship rules have undergone several iterations. When they were first introduced, these said that the sponsors had to come up with £2m, although not necessarily straight away.
In 2006, a new system was introduced whereby sponsors would pay £2m, but on a different basis. The sponsor would pay this into an endowment trust, with resulting funds to contribute to an academy\'s running costs. The DCSF\'s website says the sponsorship would usually be paid over five years, with at least £500,000 payable in the first year.
The parliamentary answer says that, of the 10 academies that opened in 2007 under this scheme, only four had received £500,000 or more in sponsorship by August 2008. Four had received nothing.
In 2007, the rules were amended again so that universities, colleges and schools wanting to sponsor academies were no longer required to provide sponsorship. Then, in September 2009, Ed Balls, the schools secretary, finally said all sponsors of academies opening from 2011 would no longer be required to contribute cash.
Ministers want to create 400 academies, and academy supporters will point out that £100m pledged on building work sponsorship is still a large sum. The endowment trust sponsorship method has generated another £8m. Against this, the academies scheme has been estimated as taking at least £5bn of capital investment. Holmes describes £108m as a "drop in the ocean" against the schools\' capital and running costs.
Successive governments have found it hard to secure private funding for school improvement projects. The city technology colleges scheme, launched by the Conservatives in the late 1980s, only saw 15 privately sponsored schools open. Specialist schools have also faced difficulties securing sponsorship cash.
A ULT spokesperson says: "Despite having no endowment of our own, according to the published DCSF data ULT has contributed more than any other single sponsor to the academies programme. Every penny of this £11m has been invested in improving education in communities which for years beforehand had received too little. But it is ironic that, had we become involved in the programme later, we would not have been required to make any financial contribution whatsoever."
A spokesman for Oasis Community Learning says: "Oasis Community Learning is in an ongoing discussion with the DCSF over the sponsorship arrangements for our three academies in Enfield, Immingham and Grimsby, as well as our responsibilities in our other schools."
A DCSF spokesperson says: "Academy sponsors have so far contributed around £100m to the state education system, an unprecedented level of investment from the private and charity sector. Some payments are made up front, and others over time in agreed instalments, but no money has been denied from school budgets.
"In many cases, where work on new buildings has not been completed, sponsorship money is not yet required. However, all our sponsors are committed to providing their sponsorship money, and we expect them to do so.
He added that all £20m ULT funding would be paid "in due course", that Oasis was committed to raising its sponsorship payments and that the Harris sponsorship money would also be paid.
For more information, please visit
http://www.guardian.co.uk/education/2009[...]es-sponsors-government-funding
