Interesting data from ofsted

The Regional Director of ofsted spent just over an hour answering questions at a meeting earlier this week of Oxfordshire’s Education Scrutiny Committee. Sadly, neither the press nor any members of the public turned up to hear this interesting and informative exchange of views.

One of the questions posed by the Committee was about schools ranked ‘outstanding’ on previous criteria and whether the judgement will remain when the new Framework, currently out to consultation, comes into force. There doesn’t seem to be a mechanism to reset the dial when there is a major change in the inspection framework.

This question was thrown into sharp focus later this week by ofsted’s publication of inspection outcomes for the autumn term of 2018. This is available at: https://www.gov.uk/government/statistics/state-funded-schools-inspections-and-outcomes-as-at-31-december-2018

Of the 102 schools classified as ‘exempt’ under the 2011 legislation, that were subject to a full inspection, 12 schools (12%) remained outstanding, 50 (49%) declined to good, 35 (34%) declined to requires improvement and five (5%) declined to inadequate. The fact that four out ten of these schools declined to either ‘requires improvement’ or the category of ‘inadequate’, in five cases, must be of concern. A further 15 ‘outstanding’ schools had a short inspection and, thus, remained with the same outcome.

Ofsted also commented that the number of schools that had improved from ‘requires improvement’ had declined, compared with previous years. However, ofsted noted that ‘This may be a sign that the remaining schools have more entrenched problems and will be harder to turn around.’

Ofsted has also looked at schools in the government’s opportunity areas that have received extra cash outside of the normal funding arrangements. As might be expected, there was a 10% different between the percentage of schools rated as ‘good’ or ‘outstanding’ in these areas and the national percentage of such schools. As ofsted observed, ‘The lower percentage of good and outstanding schools in opportunity areas is to be expected, as the areas were chosen on the basis of the problems they were experiencing.’

No doubt, at some point in the future, ofsted will comment on both the use of funding in these areas and the difference it makes to schools outside those areas, but facing similar or even more extreme challenges.

In the present complex structure of governance, the lack of local robust school improvement teams offering help to all schools, whether maintained, standalone academies, small or even large MATs means that ofsted can often only inspect after a school has begun to decline. Good local school improvement teams, funded across all schools, might well be able to prevent some declines from happening. MATs can make this happen as they can top slice their schools, but other schools cannot as easily do so.

When the country finally emerges from its Brexit travails, this is but one of many issues that will need to be addressed. One can but hope that such an outcome will be decided sooner rather than later.

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Revenue balances: a waste of money?

The issue of high salaries paid to top officers by some academy trusts, highlighted in the previous post, isn’t the only financial issue facing the sector.  Now that more of the 2017-18 account are appearing a Companies house, it is possible to see the extent of the revenue balances being held by many academies; together with the occasional deficit.

So far, in Oxfordshire, 20 of the 39 Trusts operating academies or free schools across the county have reported their accounts and had them published on the companies house web site. In aggregate, they reveal around £4.6 million of revenue reserves held by primary schools and £4.3 million held by secondary schools. However, the deficits across both sectors total £1.1 million, mostly from one secondary school that has been in financial special measures for a couple of years and is gradually reducing its deficit.

One multi-academy trust, United Learning, operates six schools in Oxfordshire, but does not reveal revenue balances by school in their accounts. This MAT pools the money centrally for all their schools, and can then presumably use it where it can do the most good. Pooling also allows the total amount held in reserves to match the needs across the MAT in any one year and the amount can be set at a lower level than if the figure is chosen by each school. This was the approach taken in the past by local authorities, before schools gained control of their own budgets nearly 30 years ago.

A MAT operating say, 30 schools can decide that a reserve of five per cent overall might be appropriate to meet the contingencies and future needs in any one year of all schools in the MAT, whereas each school governing body might be more cautious and aim for 10% if setting a level on its own.

There is, however, a risk with pooling across geographical boundaries that schools in one area could be subsidising schools in another area. If parents discovered that a school in a MAT was taking this approach, they might choose not apply to that school, but to a school where the full funds were available for the education of their offspring.

This is an argument that balances are reducing because of the financial pressure that school currently face. There are certainly schools where revenue balances were lower in 2018 than in the 2017 accounts. But it is not yet a universal truth for all schools.

Could all schools in a local area be required to bank either with the local authority or an arm of central government? Such pooling would only work if these balances can be used rather than be treated as a deposit accounts. Pooling balances might also free cash being saved by schools for special projects at some point in the future for more immediate use, including cash being accumulated for capital projects. There seems little other justification for revenue balances of more than £1 million being held by some secondary schools other than future capital projects, especially while other school have insufficient funds.

Funding schools is a tricky business, but money should not be tied up in reserves when it can be released for improving teaching and learning.

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.

 

Accountability and asbestos

The Public Accounts Committee (PAC) of the House of Commons has just published a report into Academy accounts and performance, with a final paragraph about asbestos reporting by schools tacked on the end for some reason. https://publications.parliament.uk/pa/cm201719/cmselect/cmpubacc/1597/159702.htm proving that Brexit is not quite the only game in town at Westminster this week.

The PAC don’t think that accounts for academies are clear enough and provide enough information at the school level for parents and others from the local community interested in the spending of individual schools. Personally, I have found academy trust accounts more forthcoming than financial information about individual maintained schools. However, there are clearly Multi-Academy Trusts where information has not been forthcoming in the views of the PAC.

We can all cite issues of questionable behaviour by the leaders of some Trusts. The DfE spent a lot of time and effort last year trying to deal with the high salaries some CEOs of Mats were paying themselves, with some degree of success.  However, it wasn’t as if everything was fine and dandy before. Head teachers had been known to fiddle the books and use the school credit cards for unacceptable purposes: a few even end up being prosecuted and doing time in prison.

The PAC has set out a list of demands that the DfE must comply with by the end of March, although I expect that deadline will be extended should there be a general election before to date to exit the EU.

Personally, as I have explained in previous post, entitled ‘Does local democratic control matter in education?’ written in August 2017 that someone has viewed earlier today ,I would rather democratic control was exercised where the school is located by democratically elected local authorities and not from London. I suppose, however, if you believe in the Regional School Commissioner role, and I don’t, then they might be the office best placed in the DfE hierarchy to oversee financial transparency of academies.

I am disappointed that the PAC didn’t mention the behaviour of some academies and MATs in respect of in-year admissions and especially the way they deal with children taken into care requiring a school transfer. That is another subject this blog has championed and will continue to so.

Finally, the difficulty in making schools report about asbestos and the importance of this matter is a real concern. The PAC reported that:

The Department originally asked schools to respond to its survey by 31 May 2018. However, due to the poor response rate, it extended the deadline to 25 June 2018 and again to 27 July 2018. Despite this, only 77% of schools responded to the survey. The Department said that it was disappointed with the response rate. We asked the Department what action it had taken with the 23% of schools that had still not provided the information requested. The Department said that it had re-opened the survey and extended the deadline for the third time, to 15 February 2019, to allow the remaining schools to respond. It also told us that those schools that still failed to respond would be picked up in its school condition survey. However, this survey will not be completed until autumn 2019.

Paragraph 30 PAC Report

This really does reveal why we need a governance structure for schools in England that is both accountable and able to act effectively on important issues of whatever description.

First Swallow?

The Diocese of Bristol must be one of the first multi-academy trusts (MATs) to have posted accounts for the financial year 2017-18 on the Company House web site. At least, it is the first one I have come across. These account cover the year from September 2017 to August 2018, and thus follow the academic year. This is unlike accounts for maintained schools that follow the financial year from April to March.

In the past, this dual system has caused trouble with the government’s auditors for civil servants at the DfE. But, hopefully, that is all in the past.

One interesting feature to note is the five per cent overhead charge levied on schools in this MAT. There are eleven schools in the MAT and the cost to them seemingly increased from £403,000 the previous year to £486,000 in 2017-18. This charge covered physical, human, financial and legal support as well as education support and the classic category of ‘other’. From this, the Diocesan Board of Finance received £150,000 in 2017-18.

Now five per cent seems like a reasonable amount and it will be interesting to compare it with amounts levied by other MATs and paid by standalone academies for these professional services. There is also the question of how maintained schools should access these services? If schools in MATs must contribute to a central services charge, should maintained schools be required to do the same or be allowed to shop around for the best deal?

The Bristol Diocese MAT is coy in its accounts about the senior staff structure, although it has to declare the salary of its highest paid staff. There doesn’t seem anything about the gender pap gap, but I may have missed that bit somewhere during a quick read.

During 2018 the Minister wrote to MATs about excessive pay for some Chief Officers and it will be interesting to read any comments about this from auditors as more accounts are published. Will we see any significant reductions in pay or just an acknowledgement of the government trying to interfere in the running of MATs.

When more accounts emerge it will also be possible to review the amounts schools spend on those areas not covered in the DfE comparisons on the school data and performance indicators published by the DfE.

One area of concern that the accounts do highlight is the Local Government Pension Scheme, since all non-teaching staff in schools are normally entered into these schemes that are run by individual local authorities. Like most pension schemes, these have been in deficit and MATs and standalone academies have had to increase payments into the scheme to help overcome these deficits. Should the DfE now create a national scheme for these workers as they are clearly no longer local government employees? There may be an interesting debate to be had about the pension arrangements for these staff.

Until all schools are once again on a common annual accounting period there will remain two distinct groups that are difficult to compare in terms of income and expenditure. Such duality of approach is not helpful.

 

 

Funding issues remain

Yesterday, I received two comments from different parts of the country about issues that this blog has been highlighting over the past few months. I have reproduced these comments below:

The funding issue is key here and seeing all this unfold is quite alarming.  It seems that the government is intent on more MATs forming, though some of the income streams are becoming more uncertain, especially ones that can buoy up emerging MAT central teams.  I think it is crunch time at the moment because the government is essentially funding two systems at the moment—an enlarging academy sector and a diminishing LA sector.  I think this is one of the reasons why money is so tight.  

 There remains the question of small schools, as they will not fit into MATs (put simply, they do not bring in enough cash and are too difficult for most), and the diminishing funds available to LAs  means that small maintained schools are suffering and will continue to do so.  You cannot get rid of many of these schools as they are strategically important in many rural areas, and losing them would just consign many rural communities to being retirement destinations, the economies would lose any vibrancy without families living in them, and there would be potential food security problem if farms cannot pass onto younger families to run.  

 Finally a word about SEND.  The situation is dire, with in effect there being a cut in money for SEND—at a time when there is a massive rise in demand.  For this year, the ** Schools Forum has put 0.5% of the Schools block funding in to the Higher Needs block (though there would still be a £4.5 million deficit), and is consulting on putting 1.0% into the Higher Needs block next year.  

 To my mind the whole system is unsustainable, and clearly shows that the Tories simply do not care about children with SEND.  I reckon that all of our PRUs and current alternative provision in the county will disappear in its current form over the next two years, as the funding is being cut by half next year.  This is a massive crisis as it will just mean that the system as a whole will have to pay more for these hard to place youngsters as they get older, and their problems have not been solved whilst they were children in the education system.

Shortly after I received the above, this note followed:

Another dimension which has not yet been much talked about is the impact of the so-called ‘Hard formula’.  If that means money is allocated direct to every school from London, the scope for the Schools Forum to make minor tweaks is removed for maintained schools, but MATs will still be able to make transfers within their schools, as far as I understand it. This is because the DfE money will, in the case of MATS, go to the MAT and not the individual schools. This potentially puts schools in MATs in a difficult position. The Schools Forum is at least public and democratically observed, whereas the MAT trusts seem to me to be able to do whatever they want.

Both comments are from those with experience in education and whose views I fully respect.

If The Secretary of State is really intending to reduce exclusions, as he said yesterday, then these are the issues he has to ask his civil servants to start to address.

With birth rates now lower than a few years ago, the plight of rural schools where there is no now housing in prospect, could be dire, especially if they have any extra costs not catered for in the national formula. Time for some Tory MPs to wake up and smell the milk, so to speak.

CEOs pay: what’s happening?

A recent Chartered Institute of Personnel Development survey found that median pay for bosses of the UK’s biggest companies hit almost £4m last year – up from about £3.5m in 2016. https://www.bbc.co.uk/news/business-45183881

That set me thinking about the work the DfE undertook earlier this year in relation to the pay of CEOs of Multi Academy Trusts and whether or not the findings had been published anywhere?

Readers will recall that Eileen Milner, the chief executive of the Education and Skills Funding Agency, wrote in February to the chairs of 87 MATs employing individuals earning more than £150,000, asking them to explain their rationale for doing so by early March and to justify paying these salaries.

The intervention comes two days after the Department for Education minister, Lord Agnew, said that no MAT boss should receive a larger pay increase than their teaching staff and that CEOs should have their pay cut if there is a downturn in the performance of their schools. It follows a similar letter sent in December 2016 to single-academy trusts paying leaders more than £150,000. Lord Agnew’s February letter can be accessed at https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/683075/Lord_Theodore_Agnew_letter_to_chairs_of_academy_trusts.pdf

Further letters appear to have been written to some MATs in April and July seeking more information. These can be found at https://www.gov.uk/government/publications/letters-to-academy-trusts-about-levels-of-executive-pay 28 letters were sent in December 2017; 88 in February 2018 and a further 96 letters in either April or July 2018. With a final return date of 20th July, the EFSC should now have sufficient information to publish a report on the state of the most highly paid staff in the public education service.

There may be an issue relating to pensions should those not undertaking any teaching or direct site leadership of a school remain in the Teachers’ Pension Scheme. In the past, when becoming local authority staff most would have moved out of the TPS into the relevant LGPS for their authority. I don’t’ know how LGPS scheme managers and trustees, of which I am one for Oxfordshire’s scheme, would approach the arrival of such highly paid staff so near pensionable age, but the DfE does need to make clear the boundary for who can belong to the Teachers’ Pension Scheme even if they aren’t actually in a school?

The level of salaries paid to senior staff in the school system is clearly a matter that won’t go away. After all, perhaps 100 MATs paying more than most local authorities pay their Director of Children’s Services must be of concern in term of expenditure, especially once pension and other on-costs are added to the basic salary.

The problem really dates back to the Labour government and the development of Executive Headteacher roles without the government making it clear how such professionals should be paid. However, the seeds of that confusion date even further back into the early 1990s and the refusal to police the upper end of the Leadership Pay Scale for large schools facing recruitment difficulties. Failure to deal with a problem doesn’t always make it go away; sometimes it allows it to grow into a serious issue that is much harder to tackle as is now the case with the pay of CEOs of MATs.