19 August 2009

Academies - news for sponsors and academy trusts

Withers' Charities & Philanthropy Team continues to advise on a large number of ongoing Academies Projects.

Our work in the past has at times involved high level discussions with the Department for Children, Schools and Families on the compatibility of the provisions in the DCSF's model documents with charity law.

We are pleased to see that the Charity Commission has now considered this aspect in further detail which has resulted in a very recently published ‘Statement of Principle and Registration Protocol' focussing on the independence of Academy Trusts.


It has always been a fundamental principle of charity law that an Academy Trust seeking to be established as a charity be independent from the State. It should exist in order to carry out its charitable purposes, and not for the purposes of implementing the policies of the DCSF – albeit that the policies of the Department and the Academy Trust may coincide.

Independence is not simply about carrying out the Academy Trust's own charitable purposes but also touches upon the way the Academy Trust is governed and the way in which it operates.

The new Statement of Principle expressly recognises that Academy Trusts have the right to negotiate the terms of the funding agreement with DCSF and have the freedom to consider the acceptance or rejection of provisions in the DCSF model agreement.

Funding agreements

Funding Agreements should not:

  • require the Academy Trust simply to implement the policies or carry out a statutory duty of DCSF
  • involve the surrender of trustees'/governors' discretions to the DCSF.

The terms of the funding agreement should allow the trustees/governors of the Academy Trust to have responsibility for decision-making in the operation and management of the Academy including:

  • how the Academy is operated
  • its planning and development
  • its policies and objectives
  • the form of education (within the constraints of the relevant statutory provisions which apply to all academies)
  • the selection of beneficiaries (pupils) – again, within the constraints of the relevant statutory provisions, for example: providing for different abilities wholly or mainly drawn from the area in which the school is situated and without charge
  • internal financial control and management
  •  the management and control of the Academy's budget
  • its staffing.

The funding agreement should not therefore restrict trustees/governors in such a way that the Academy Trust is obliged to accept DCSF decisions/directions or implement DCSF objectives and policies in the conduct of education.

Importantly, the Statement provides that:

‘DCSF should not exercise control, or fetter the planning and management of the Academy Trust through requirements for consent except where such a requirement is legitimate to protect public funds or publically funded assets or to protect the delivery of services contained in the Funding Agreement.

The Funding Agreement should not fetter the Academy Trust's freedom to use other funding streams for its purposes. DCSF may require the Academy Trust to notify the Secretary of State in certain circumstances, where notice is legitimate to protect public funds….'

Charity Commission registration of new academy trusts

The Charity Commission has introduced a new registration process for Academy Trusts. Sponsors will now be required to submit a statement that they have had regard to the Statement of Principle and Registration Protocol and relevant guidance in reaching an agreed Funding Agreement.

If sponsors have deviated from the new model Funding Agreement or have agreed to more prescriptive terms a full explanation of the variations and the reasons for them will also need to be supplied.

Model funding agreement – scope for change

The latest DCSF model funding agreement builds on the Statement of Principle and sees some welcome changes to protect the independence of Academy Trusts.

We suggest that Academy Trusts that have already entered into funding agreements seek advice as to what changes they may now be able to agree with DCSF and the Charity Commission to improve their position. It may also be possible to consider amending existing memoranda and articles of association of Academy Trusts for the same reason.

Freedom of Information Act 2000

On 25 October 2007, the Ministry of Justice published a consultation document entitled:

‘Freedom of Information Act 2000: Designation of additional public authorities'

The consultation invited views as to which additional organisations should be brought within the Freedom of Information Act (‘FOIA') framework.

The Ministry of Justice (‘MOJ') published its response on 16 July 2009. The response deals specifically with Charities and Academies.


The MOJ's response to the consultation notes that charities generally are not funded from the proceeds of taxation and that the management of charities is also subject to regulation by the Charity Commission (which is subject to FOIA). Charities are also required to publish annual accounts and other evidence of good practice.

It goes on to say that:

‘The Government would expect charities to respond as openly and promptly as possible to reasonable requests for the information they hold. Equally, it would expect that members of the public would take particular care to ensure the requests they make to charities are reasonable and will not have the effect of unnecessarily diverting resources from charities‘ primary purpose.'

In a welcome move, the Government has accepted that to subject all charities to FOIA would divert funds away from charitable spend and create greater administrative costs.

‘The Government therefore considers that the benefits of bringing charities [within FOIA] would be significantly outweighed by the negative impact on charitable causes they support.'

This is extremely good news for most charities. However, the position of Academy Trusts is very different.

Academies & FOIA

Currently, FOIA applies to the governing bodies of all schools and colleges in the state sector other than Academies. The response draws a distinction between independent fee-charging schools and Academies:

‘The Government believes that the law as it currently applies and the disciplines of the market place provide sufficient incentive for fee-paying independent schools to operate in line with the interests of pupils and their parents it sees no justification at present to bring such schools within the scope of FOIA'

Academies on the other hand are under the control of the governing body of an Academy Trust which is responsible for the Academy's land and other assets. DCSF is subject to FOIA and already publishes a large amount of information about academies ‘…but Academies themselves are not caught by [FOIA], even though they are state funded.'

The Government's response is therefore that Academies WILL be subject to FOIA in the same way as the governing bodies of maintained schools in England and Wales.

Academy Trusts will now be consulted about how this change will affect them and the timetable for implementation.

We suggest that existing Academy Trusts seek advice as to:

  • the response to the further consultation
  • their own FOIA publication scheme and policy
  • how they will manage the process of dealing with FOIA requests and responses
  • the impact on funding.

Young people's learning agency

The Young People's Learning Agency is due to come into existence in 2010. Ministers have decided that the YPLA will act on behalf of the Secretary of State to deliver routine academy functions such as payment and calculation of grants and performance management on behalf of the Secretary of State.

The precise date on which the YPLA takes on academies' functions is yet to be decided. Ultimate legal responsibility will remain with the Secretary of State for Children, Schools and Families. We will keep you updated as more information becomes avaialable.

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