Education CommitteeWritten evidence submitted by Geoffrey Davies
Introduction
1. I am a solicitor specialising in education law and have been advising academy trusts, particularly multi academy trusts, from 2002, early in the last Government’s academies programme. I have acted for many of the larger sponsored multi academy trusts. I am also a director of United Learning Trust, which until recently was the largest sponsored multi academy trust.
Sponsored Multi Academy Trusts
2. The previous Government’s academies programme essentially sought sponsors to support particular academies, either on a single academy or multi academy basis. Some of the earlier and best known sponsors were ARK, Oasis, Lord Harris and The Church Schools Company (now United Church Schools Trust), for all of which I have acted since their inception. The structure required by the Department for Education and Skills (now the Department for Education) (“DfE”) required the sponsor to establish a company limited by guarantee—known colloquially as an academy trust—which would then own and operate academies. The principal sponsor would be a member of the academy trust and would normally have the right to appoint and remove a majority of the board of directors of the academy trust, which is the governing body of the academy trust. Following the model set by the Church Schools Company for the operation of its private schools, the DfE agreed to the concept of their being local or academy governing bodies (LGBs) for each of the academies operated by the academy trust. The LGBs are technically committees of the directors of the academy trust to which certain powers and functions of the board of directors were delegated. There is no specifically agreed scheme for such delegation and the extent of delegation depends very much on the ethos of the academy trust in question, and of the competence of the members of the relevant LGB.
3. The board of directors of a multi academy trust normally (in accordance with the requirements of the DfE) comprises:
(a)
(b)
The articles will also contain a right for the DfE to flood the board by appointing additional directors in certain limited circumstances.
4. The LGBs were required by the DfE to comprise:
(a)
(b)
(c)
(d)
(e)
as well as persons nominated by the directors of the academy trust. It was usual for academy trusts appoint to the LGB persons of influence in the area in which the academy is situated. Recently the DfE has relaxed the requirement for membership of LGBs so that only two elected parents are required to be members of it. Indeed the DfE has relaxed the requirement even to have a LGB by saying that each academy need only have an advisory body comprising at least two elected parents.
5. Most multi academy trusts established fairly quickly a strong central executive team, led by a chief executive officer. The teams would normally include expertise on education, ICT, HR and finance. Control over the operation of the academies is vested in the executive team. The executive team would report to the board of directors usually once a term. The principals of the academies would normally report directly to the chief executive officer of the academy trust.
6. The role of the directors of the academy trust would largely be a strategic and monitoring role, holding the executive team to account. The presence of LGB chairmen on the board of directors considerably contributes in the case of United Learning Trust to the quality of discussion at board meetings because of their intimate involvement with the academies for which they are directly responsible.
7. As mentioned above, the role of the LGB is not clearly defined. There are certain specific roles undertaken by the LGBs, such as dealing with grievances by staff and staff disciplinary matters, considering admission issues and exclusions. However the principal purpose, at least in the United Learning Trust model, is for the LGBs, and in particular the chairmen of the LGBs, to be a critical friend of the principal, challenging and supporting the principal in the exercise of the principal’s duties. However, the principal does not report to the LGB, but to the central executive team and the LGB is not be in a position to give directions to the principal as to the conduct of the principal’s duties. The role of the chairman of the LGB is particularly critical in this structure and most LGB chairmen spend a considerable amount of time directly engaged with the academy for which they are responsible. They provide a conduit for information to be provided to the central executive team, and through the central executive team to the board of directors. That provides a check in relation to any information provided by the principal to the central executive team.
8. None of the directors of the academy trust (other than the chief executive if he has been appointed a director) nor of the members of the LGB (other than any staff members) receive any remuneration from the academy trust.
9. How well does this structure work? In my opinion extremely well indeed. The LGBs provide on an individual academy basis a direct link with the local community in which the academy works. The directors of the academy trusts are able to take an overview of the operations of the academies as a whole, and are able to identify differences between different academies, for example staff ratios, expenditure on particular heads of expenditure, performance against targets etc. The information provided to the directors therefore provides a good basis upon which they can challenge the performance of the central executive team and, through the central executive team, the academies themselves. However one of the key features which makes this work well is the involvement and commitment of the original sponsor. It is absolutely clear from any involvement with the Harris Federation that Lord Harris’s personal commitment to the academies operated by the Harris Federation sets the tone and standards by which the Harris Federation’s operations can be judged. The same could equally be said to be true in relation to ARK Schools, Oasis Community Learning and United Learning Trust. It should be recognised that in relation to each of these four entities a strong central executive team has been established with considerable experience in the areas in which the academies operate.
Non-Sponsored Multi Academy Trusts
10. Since the current Government’s conversion programme started a number of non-sponsored multi academy trusts have been established. The critical difference between these multi academy trusts and the sponsored multi academy trusts is the absence of a sponsor. There is no person or organisation which actually controls the operation of the multi academy trust itself.
11. The DfE’s requirement as to membership of multi academy trusts has been non-proscriptive, although the DfE normally requires the chairman of the board of directors to be a member. Broadly the DfE simply requires there to be a minimum of three members of the multi academy trust who are then entitled to appoint a majority of the directors of the multi academy trust. In addition to the directors appointed by the members, the DfE normally requires:
(a)
(b)
(c)
(d)
12. There are no provisions in the DfE’s Model Articles of Association for a multi academy trust which deals with the succession in membership of the multi academy trust. The first members effectively have vested in them the future control of the multi academy trust, without any control over their long term suitability and without any guidance as to what should happen if they die, become insane, or simply lose interest in the operations of the academies for which they are members of the academy trust are responsible. In my opinion this is a significant defect in the current organisation of multi academy trust.
13. Notwithstanding the comments above, the fundamental structure though for non sponsored multi academy trust and sponsored multi academy trust is substantially the same and, subject to the key personnel being suitable for the task undertaken, can provide a sensible structure for the operation of multi academy trust.
Single Academy Trusts
14. The position in relation to sponsored single academy trusts and sponsored multi academy trusts is substantially the same in that the sponsor of single academy trusts will normally be in a position to appoint a majority of the directors of the board. In the older single academy trusts the board was required to include the same people as would in the case of a multi academy trust serve on the LGB. More recently the DfE has relaxed the requirement for membership of the board so that in addition to the directors appointed by the principal sponsor, it was only necessary to include two parents elected by parents of pupils at the academy operated by the single academy trust.
15. The position with regard to single academy trusts established, as a consequence of the conversion of a maintained school into an academy, is very similar to the position in relation to a non-sponsored multi academy trust. The members of the single academy trust will quite often be some, or even all, of the members of the governing body of the maintained school. The DfE merely requires there to be three members of the single academy trust when it is established, without being proscriptive as to who they should be. The same difficulties, as I have mentioned above in relation to succession etc. of those members, arises in relation to a single academy trust as arise in relation to a non-sponsored multi academy trust.
16. The single academy trust will have a board of directors but no LGB. The principal of the academy will fulfil the role of the chief executive officer in a multi academy trust. It is very unlikely that in a single academy trust there will be any independent education experience available to advise the directors about the success of operations or otherwise of the academy operated by the single academy trust unless that experience is available on the board itself. There is therefore a considerable risk that with a single academy trust the only authoritative statements about the education of the children available to the directors of the academy trust will come from the principal. The ability of the board to hold the principal to account is severely limited, in the absence of appropriate experience on the board, because they have no information with which to challenge the principal other than that provided by the principal and his or her team. It would be very easy to see how a board of directors of a single academy trust could be duped by a principal.
17. In essence the board of directors of single academy trusts are probably in no better position to govern “their academies than were the governing bodies of the maintained school which their academies have replaced. The key difference is that the local authority no longer has any formal role in challenging the performance of the executive team within the school. There will, of course, be good and bad boards of directors, as there are now good and bad governing bodies. In the case of single academy trusts, the roles which would fall to be performed by the directors are likely, because there is no central executive team, to be more onerous then the roles to be performed by the directors of a multi academy trust.
18. Is there a better way of ensuring long term stability of the membership of non-sponsored academy trusts?
As the members of a non sponsored academy trust appoints (or elects) the majority of the directors of the academy trust the relationship of those members and the way in which they pass on their roles over the years is of critical importance. As things stand it is probable that with a well run academy trust, the original members will resign and be replaced with members nominated by the directors. In less well run academy trusts I fear that they will muddle along without addressing the issue properly. One possible alternative would be for the parents of registered pupils at the academy to have the right (under the articles) to be members of the academy first whilst their children are on the roll at the school. This arrangement would give real accountability of the directors of the academy trust to the parents. The parents who are members would have the right then to elect and remove the directors. I would suggest that that should happen, as is the case with publicly limited companies, on a three year rotation to ensure that there was continuity, with the elections taking place at an annual general meeting of the academy trust. The directors could also present the accounts of the company for approval at that time and would, necessarily, be available for questioning. There would then be some real accountability for the directors’ actions (or inaction) and for the performance of the academies operated by them. I would not suggest that this applies to sponsored academy trusts as there is a real level of responsibility to the sponsor.
Should Directors of Academy Trusts be paid?
19. In my view it is an honour and privilege to serve on the board of directors of an academy trust, and a civic and social responsibility. The moment one seeks to remunerate directors, I fear that the wrong people will seek to put themselves forward. For those that are successful in the community, the amount of remuneration which could properly be afforded is unlikely to be sufficient an attraction to serve. For those to whom the remuneration is an attraction, one would ask why? It is possible nonetheless that, given the quite considerable role which is played by the chairman of a multi academy trust, which goes far beyond simply chairing meetings of the board, there is a justification for the payment of remuneration. Indeed under the current Articles of Association it is possible to remunerate a chairman for services beyond the role of merely being a director. However it would be rare for anyone to make use of those provisions.
January 2013