More wasted cash?

The DfE has today updated the list of academies (SATs and MATs, but possibly not MACs) where there has been a change in overall responsibility, either from a standalone academy (SAT) into a multi-academy Trust (MAT) or between MATs. https://www.gov.uk/government/statistics/academy-transfers-and-funding-england-financial-year-2018-to-2019

These changes are generally not cost free. They can take place for a variety of reasons including, ‘due to intervention’, usually after an inadequate rating by Ofsted; ‘initiated by the Trust’ and as a result of the fact that the Trust ‘sponsor closed’. The last of these reasons seems to have incurred costs of around £3 million in the 14 months from January 2018 to February 2019. The DfE can offset such costs against any balances held within the Trust, but that cash cannot then be spent on educating the pupils.

Now it has to be recognised that in the past costs were incurred in dealing with failing local authorities. Hackney in the early years of the Labour government was one example, and I think that Bradford was another. Indeed Commissioners are still sent into Children’s Services rated as ‘inadequate’. However, the ability of trustees to effectively close their Trust brings a new dimension to this issue. I suppose that some of these Trusts might have, so to speak, fallen on their sword before they were the subject of intervention by the Regional School Commissioner’s Office.

Nevertheless, the fact that trustee can voluntarily decide to abandon one or all of their schools at a cost to the system does raise questions about the best use of scarce resources, an issue highlighted in the previous post on this blog.

There also doesn’t seem to be any requirement on trustees to think of others when making decisions to close a SAT or a MAT. There are times of year when such actions might be allowed, but others where it should be banned. I recall a few years ago a MAT announcing the closure of a school a couple of weeks before the notification of places for the following September was to be relayed to parents. The local authority had to re-run the whole exercise for that area, with a waste of time and money. Those costs would presumably not be included in the figures provided by the DfE, and I suspect the local authority were not reimbursed for the time an effort of their officers in ensuring every pupil had a place at secondary school that September.

The DfE might also like to publish a list of ‘orphan’ schools, declared ‘inadequate’ by Ofsted and requiring conversion to academy status but finding it a challenge to secure a MAT willing to embrace them.

I don’t know whether the Select Committee in their Inquiry into school funding looked into this sort of cost to the system, if not, then they might like to put such a study on their list for the future.

As I have written in previous blogs, there are some areas, such as pupil numbers increases, where costs cannot be avoided. There are other areas where reducing waste should be a real priority for the system. This looks like an example of the latter.

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Stop wasting money

A new report commissioned, and part funded by the Local Government Association, has found that ‘middle tier’ oversight functions for academies cost some 44% more than for local authority maintained schools. The research was carried out by Sara Bubb Associates, and the team conducting the study involved some senior figures from the world of academia. The full report can be accessed from: http://sarabubb.com/middle-tier/4594671314

This study published shortly after the call for evidence by the Confederation of School Trusts (see earlier post) shows that the overall costs for middle tier functions within the academy system in 2016/17 was £167.05 per pupil compared to £115.71 for the local authority system. It is worth pointing out that the two do not share a common financial year, and that some of the disbanded local advisory and professional development functions may have been taken up by MATs. However, neither of these points would be likely to fully explain the difference between the two amounts.

By my calculations the figures in this report suggest that saving of some £300 million might be made if the ‘middle tier’ was rationalised and local authorities were charged with oversight of all schools; perhaps with regional boards to allow for the economies of scale that this report points out are missing from the current academy sector at present.

The authors of the report call for an urgent review of the middle tier system in the light of international best practice. It is generally acknowledged that England has some of the most centralised public services; schooling is no exception to that state of affairs. The authors also recommend an evaluation of the cost-effectiveness of the multi-academy trust model, and I would add of standalone academies as well. The authors also want to see greater efficiency, fairness and transparency in funding the oversight of England’s school system. The DfE has gone some way since the data used in this report on at least facing up to the high salaries that were being paid in some parts of the academy system, but have not yet tackled the underlying issues identified in this report.

The DfE has also undertaken some work to drive down costs for schools, emulating, for instance, TeachVac’s free national vacancy site with a version of their own. However, the have failed to take on board advice in the 2016 White Paper that might have clarified some of the ‘middle tier’ functions, such as in-year admissions once again becoming the responsibility of local authorities. That isn’t just a cost matter, but also one of fairness for pupils compelled to change school during the school-year. As I have pointed out in the past, children taken into care and moved away for their own safety from their previous home often find some schools reluctant to admit them, even if they have places available.

Perhaps any new regime at Sanctuary Buildings after the new Prime Minister enters into office will use this report as the basis for a fresh start. However, I am not holding my breath. In the meantime, reports such as this one that highlight the amount of money being spent unnecessarily are to be welcomed.

 

 

 

Market forces or national pay scales?

The DfE has announced that the Academies Minister, Lord Agnew, has written to 28 chairs of trustees as part of the Government’s commitment to curb what it feels are ‘excessive’ salaries based on the size, standards, and financial health of trusts. The academies have been asked to provide more details on the pay of executives who earn more than £150,000 – and those earning £100,000 if two or more people in a school earn a six-figure salary. https://www.gov.uk/government/news/schools-minister-calls-on-academies-to-justify-excessive-pay

This issue of six figure salaries has concerned the government for some time now, and comments about their letters to Trusts have featured in previous posts on this blog during the past year, ever since the issue first surfaced as a matter of concern.

Schools Week has publish a full list of the Trusts the DfE has written to at https://schoolsweek.co.uk/holland-park-school-warned-over-heads-260k-salary-as-minister-writes-to-28-trusts/

Interestingly, Holland Park School is one of the Trust to receive a letter. Their accounts lodged at Companies House, for the year to end August 2018, show the highest paid staff member receiving an emolument [sic] in the range of £260,000-£270,000 for the year.

Those with a long memory stretching back into the early 1990s will recall that as a large secondary school Holland Park always paid at the top end of the salary scale. But, how to justify around double the national rate for the job as identified by the School Teachers Review Body and the Teachers’ Pay and Conditions Document? Well, ever since a Secretary of State allowed academies to ignore both of those documents, the genii was out of the bottle. Indeed, Holland Park School had three staff earning more than £140,000 in 2017-18.

The school is judged ‘outstanding’ by Ofsted and is a Teaching School. The examination results are excellent, but does any of this justify paying such high salaries to senior staff? As a single school trust the head isn’t managing several schools, so there cannot be that argument for additional pay.

Is there an argument around market forces? Without such pay the school would not attract and keep a head teacher? Research into the turnover of senior staff in school using TeachVac data for 2017-18 suggest that only around 12% of secondary schools failed to appoint a head teacher when seeking to make an appointment. The figure is higher in the primary sector.

After more than 30 years of studying the labour market for senior staff in schools, I would suggest that rarely has there been a period when finding secondary head teachers that been easier than at present.  You can justify a recruitment allowance to help heads settle in a new area, but is a differential of around ten times the pay of a newly qualified teacher acceptable? The government clearly thinks not.

Should all public sector schools be brought back within a national pay framework and was it a mistake to allow schools to go their own way? Perhaps the real mistake lies with a refusal a decade or so ago to set rules for what was an Executive Head Teacher and how much they should be paid.

 

Schools for the future?

In the first segment of the BBC’s Today programme this morning, sometime in the run up to the seven o’clock news, I heard a representative from a Free School in the North West saying that control over the money was one reason the school had been established. Regular readers of this blog will probably know what comes next. True, if you are a standalone academy of free school or a local authority maintained school you have total control over your funds, but not if you are a school in a group of academies. There your Trustees can shift money between schools with impunity: so much for the free to control your finances.

Last Tuesday, at Oxfordshire’s Cabinet meeting, I raised this issue with the Cabinet member in the Conservative led administration whose portfolio includes schools. I asked for a commitment to fight for cash allocated to Oxfordshire schools to be spent at that school and not, when the school is part of a group of academies that cross the county boundary, used to secure the education of children in another part of the country. After all, Oxfordshire is a member of the F40 group of local authorities that see themselves as under-funded. It would be grossly unfair to transfer cash from an Oxfordshire school to another school in a better funded area. The minutes have yet to be published, but I expect them to show she wasn’t happy with this possibility.

Of course, under the Common Funding Formula, all schools should be funded at a similar basic level, but the principle of devolved budgets remains. Over the past two decades, once a budget was handed to a school it was sacrosanct and could not be touched by anyone else. Now, that principle has been broken for some schools, why should it apply to any?

The answer to this question is important, especially as the Labour Party continues its journey away from competition as a panacea of all evils in education and back towards the possible municipal control of schooling model.

Both my own Party, the Liberal Democrats and Labour have the courage to see that reforms started under Ed Balls and enthusiastically taken up by Michael Gove haven’t produced the solution that they wanted. Improvements in outcomes there have been, but the system is now too weighted against the disadvantaged in society. If your child is taken into care and moved away, there is a high risk that their education will be severely damaged. The growth in home education starting at the end of Key Stage 3 isn’t always a good sign and pupil place planning during a period of rising school rolls has been a nightmare in many areas and cost the country money wasted on travel costs that were not really necessary.

There really isn’t the need for a new form of cooperative school proposed by the Labour Party this week. Updating the voluntary school sector rules for the twenty first century would be quicker and simpler to achieve as a way forward.

Good schools for all remains the aim: can it be achieved without a degree of overall local control and planning for the future?

 

How to run a National School

Recently Lord Agnew, the PUS for the School System wrote to firms that audit academies and their Trusts/Committees. Now a letter from a Minister carries with it both political and administrative weight when compared to one from a civil servant writing on behalf of their political masters. Lord Agnew’s letter can be found at https://www.gov.uk/government/publications/letter-from-lord-theodore-agnew-to-academy-trust-auditors

In the letter, , in the words of the DfE website, Lord Agnew ‘shares across the audit sector several key points that will help boards govern more effectively and make best use of the freedoms they have.’

So what are the key points in the letter? General Annual Grant (GAG) pooling is the first point specified.

Lord Agnew reminds the auditors that ‘The opportunity to pool GAG is particularly valuable, in particular to simplify the provision of support to weaker schools in a MAT until they can grow their pupil numbers. It is worth remembering that a MAT is a single financial entity.

This isn’t a power generally available to local authorities in relation to maintained schools and typifies the different power arrangements between schools in MAT/MACs and those schools still in the maintained sector. Interestingly, he doesn’t ask the auditors for a time limit on taking money away from some schools to support others. Auditors might like to consider whether this cross-subsidy between schools should really be open-ended or in need for regular justification, since Regional School Commissioners seem to differ in their approach to such weak schools. Auditors can provide helpful national guidance by acting in concert on this point.

By the time Lord Agnew has reached Auditors’ management letters, he is telling audit firms that, ‘We would like to see the recommendations made by auditors being implemented in a timely manner with scrutiny at board level to ensure that this is the case.’ Now whether or not he sees it as a duty on the auditors to see that the contents of these letters are addressed is an interesting question. Of course, if the issue is really serious, then the auditors should quality the accounts. However, this is something auditors are generally reluctant to do, even though the DfE itself isn’t unfamiliar with the process in terms of its own accounts and their relationship with the academy sector.

Lord Agnew also hope his letter will open up debate between the auditors and their clients. His list of Operational Challenges is interesting. These include,

  1. Are your clients using a standard employment contract for all teaching staff so that they can be cross deployed to different schools?
  2. Are they using the same exam boards in all their schools to enable cross school marking and also to optimise the point above?
  3. Do they have a central electronic purchase order system to ensure strong controls on expenditure?
  4. Do they have a central bank account that simplifies bank reconciliations and ensures that there is constant, easy visibility of the cash position?
  5. Are they benchmarking their supply costs and if over a number of years the level is constant have they considered employing permanent staff to fill some of this requirement thereby improving the quality and removing agency charges?
  6. Are they accessing the Department’s procurement arrangements if they are providing better value than they can achieve on their own?

The first of these is highly interesting in the sense of moving back to controlling the lives of teachers. When I joined Haringey, in 1971, my contract specified a school but added that the council had the right to move me to another school. With all schools in the Authority in a tight geographical area this wouldn’t have had much to concern me, even if was in use, which by then it wasn’t. With MATs/MACs spread across large areas, it might be helpful to understand whether this policy, advocated by the DfE, is having any effects on recruitment and retention of teachers both at classroom level and, more specifically, in terms of promotion to middle leadership if it means a house move to a different area?

If these powers are to be enforced on academies, then presumably they are both important and useful for our school system. In that case, why aren’t local authorities allowed to create them for maintained schools and what is the future for stand-alone academies?

Perhaps Lord Agnew will write to Directors of Children’s Services explaining why these operational challenges don’t matter in the remaining maintained schools?

 

 

Pressure on academy budgets in 2015-2016

The DfE has now published the financial data on single academy schools for the year 2015-2016, covering the period to the end of August 2016, almost two years ago now. https://www.gov.uk/government/statistics/income-and-expenditure-in-academies-in-england-2015-to-2016

What is striking is the similarity with the trends in non-academy school finances for 2016-17 highlighted in my post of the 14th December 2017.

In today’s tables, about this select group of academies, all groups of schools spent more than their income in 2015-2016. For the primary academies, this is the first year where median expenditure exceeded income. In the secondary sector, it is the third year running median expenditure has exceeded median income.

In the year ending August 2016, the total revenue expenditure in this group of academies exceeded income by £280m. This represents 1.5% of income, up from 1.0% in 2014 to 2015. However, as the DfE notes, this does not mean that these academies are inevitably in debt, as they may have had reserve funds from which these costs were able to be met. Nevertheless, it is not a trend that can continue for ever as reserves are eventually exhausted.

There is a strong probability that the gap has widened since then as the funding crisis in schools has intensified. If the next pay rise isn’t fully funded, then some schools may well be in real financial difficulties.

As might be expected when budgets come under pressure, these academies spent a great proportion of their income on teaching staff than in the previous year. Although expenditure on teaching staff as a proportion of total expenditure has fallen by 3.2 percentage points since 2011/12 when the data were first collected. However, it rose by 1.2 percentage points in 2015/16 over the previous year.

Supply staff cost these schools 2.3% of their budgets in 2015-16, so even the recent government announcement about driving down the costs of some supply agency activities, while welcome, is hardly going to make a big difference to most schools’ budgets. The fact that 12% of the 4.3% of other expenditure was spent on PFI costs suggests that for some schools this is a real burden and must affect how they can manage their budgets. It would be helpful if the DfE could have shown this table for schools with PFI costs and those without that burden. Some eleven schools are shown in the detailed tables with expenditure of more than £1,000,000 on PFI costs, with one school in the South West paying more than £2,000,000. Not surprisingly, its expenditure on both teaching staff and resources is not at the upper end of the scale.

The data on supply staff costs looks somewhat suspect, since some schools may have filled the same figure in for both supply teaching staff and agency teaching staff columns, generating an overall total that is twice both amounts. This might be the case in some schools, but seems too common not to be worth investigating further. However, the school that spent £1,700,000 on supply staff doesn’t fall into that category of schools.

With the announcement from the Secretary of State at the NGA Conference, we can now expect more of this information, including for multi-academy trusts.

 

‘intervene fast… take the serious action necessary’. Promises

Why has the Regional School Commissioner for North West London and the South Central Region not issued any warning notices to any school about poor performance since the end of 2016? The updated DfE list of such notice published earlier this week  https://www.gov.uk/government/publications/list-of-letters-to-academy-trusts-about-poor-performance reveals that the last notice issued was in December 2016 and that was to a school issued a pre-warning notice at the start of that year. Indeed, all the schools issued with notices in 2016/17 had previously received an earlier letter, meaning no new school in the region has been added to the list since early 2016.

Is the Office of the RSC not communicating to the DfE or has the RSC decided that the Secretary of State’s words in his speech to the NGA that ‘on those rare occasions when a school is failing – be in no doubt – we will intervene fast and we will take the serious action necessary’ doesn’t apply in the North West London and the South Central Region?

It cannot be that there are no Inadequate schools within the region, although there may not be many. The RSC appears also never to have issued any sort of notice to a school run by any of the faith groups in his region. This may explain why the school I highlighted in my previous blog post hasn’t received any overt indication of concern about performance, except from Ofsted when it declared it Inadequate in the spring of 2017 and received expressions of further concerns in the two follow-up s8 monitoring reports.

Is the RSC for the North West London and the South Central Region trying a new policy, at variance with the words of the Secretary of State, by seeking to improve schools beyond the glare of publicity? Interestingly, the figures for number of notices issued by the North West London and the South Central Region are also matched by some other regions that have also not published any notices in 2017/18, whereas the RSC for the South West has issued five of the 12 notices in 2017/18.

There are clearly Inadequate academies, as rated by Ofsted, in the regions where no notices have been published in 2017/18  as well as previously rated Inadequate schools where progress to return to an effective standard of education has been unsatisfactory. How are RSCs handling these schools now the notices seem to have fallen out of fashion? How will the Secretary of State’s promise to intervene fast be acted upon if the general public do not know what action is being taken by an RSC?

The Secretary of State has also promised more openness from Headteacher Boards and their minutes, so that is one possible way forward. Local politicians might also like to call RSCs before their Education Scrutiny Committee to given an account of how the RSC’s Office is raising standards in their local area among the academies and their Trusts. Oxfordshire’s Education Scrutiny Committee has been holding such meetings for the past three years with the RSC or their Office. Sadly, the ESFC have yet to agree to such a meeting despite two academies being in financial special measures for more than two years.