How the 2016 Budget Statement Impacts the Education Sector

Terry Stocks
There are circa 25,000 schools in the UK providing education for approximately 9.5m pupils. Overall expenditure on schools is £102bn, the third largest sector spend behind health and social protection. Estates spend accounts for approximately 10% of the total.

The budget, announced 16 March 2016, has preserved funding for schools against a backdrop of budget cuts for other government departments. There was a commitment for all schools in England to become academies, or be on their way to becoming academies by 2020.

The current academy conversion rate is around a 1000 per annum. The trajectory of schools converting to academies will have to change exponentially, to about 3000+ per annum! This is a big undertaking. Currently is takes around six weeks for an application to be considered, although well documented and supported by the Department for Education (DfE) and Education Funding Agency (EFA), it remains a process schools must be prepared for, as it transfers a number of new liabilities to the new academy. The potential rate of new academy applications will pressurise the process and therefore converting schools must ensure they are aware of their long term liabilities.

It is true to say that an academy has more autonomy over its budget expenditure and curriculum, but it should carefully review the impacts when deciding on whether to ‘go it alone’ or be part of a Multi Academy Trust.

A converting school can become a single academy or part of a multi academy trust. It is true to say that an academy has more autonomy over its budget expenditure and curriculum, but it should carefully review the impacts when deciding on whether to ‘go it alone’ or be part of a Multi Academy Trust (MAT). The criteria for a single academy states the school must be outstanding or good with outstanding features. Its pupil attainment must be above the national average and it must have healthy finances.

As a single academy you must also support another local school, which must be articulated as part of the application. With the push for all schools to become academies it stands to reason that a large number will have pupil attainment below the national average, and therefore will be guided to become part of a MAT. A MAT provides the ability to share costs to a greater extent than a single academy as it manages the operational costs across a number of sites and assets. This will help achieve economies of scale but does result in a larger management liability across all functions including estates.

The EFA academies agreement sets out clear expectations for the estate management and future planning. The EFA’s guidance sets out requirements and reminds academy boards of their statutory estate responsibilities. It states that all school buildings should be kept in good condition, all relevant duties under the Health and Safety at work act should be complied with, including asbestos management. The academy / trust should have a detailed knowledge of the condition of their estate and have plans for its long term maintenance and renewal. The EFA also state that they will ask trusts to provide information on how they have used their estates funding in year.

There will be a growing need for the private sector to provide support for converting schools, academies and MATs...

Many of these requirements will be new to an academy or trust and they will have significant work in focusing on new HR, curriculum and service contracts. Estates could be the thing that loses focus given its previous ‘non-core’ role. Moving to academy status removes the safety net local authorities previously provided.

There will be a growing need for the private sector to provide support for converting schools, academies and MATs to ensure their liabilities, on transfer to academies, are known and accounted for and their ongoing estate responsibilities are being met; not only to satisfy the EFA estate requirements, but also to protect the board in discharging its new legal liabilities.

Faithful+Gould can offer a market leading estates service, providing advice at all stages of conversion to academy status and operations. We have considerable expertise within the schools and higher education sector covering all service requirements from budget application, survey, design, sustainability, delivery and handover to operations.

The move to full academy status is bold. The government states it will accelerate the government’s schools reforms and move to create a gold standard education throughout England.

The move to full academy status is bold. The government states it will accelerate the government’s schools reforms and move to create a gold standard education throughout England. It sees the academies programme transforming education for thousands of pupils, helping to turn around struggling schools and offering schools the freedom to excel. The move will dilute the current local authorities’ management of schools and place allocation and in the short term raises questions who will take over that role. It will likely be taken up by the new regional Education Commissioners. However all this will need to be made clearer over the coming months.

As a key provider to the public sector we will seek to support the education sector and new academy boards, ensuring their statutory liabilities are met and that estates management does not distract them from focusing on their key function of providing first class education.

The government’s announcement is bold, its intentions are well placed. There is an exciting future, but caution is required to ensure the desired focus on education is achieved.

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