Changes to Government funding arrangements may mean an increased number of schools looking to convert to academies by September 2011.

This is because the current protection for a key element of academy funding (the local authority central spending grant “LACSEG”) is time limited. In order to qualify for the current protected funding, schools wishing to convert to academies had to apply to the Department for Education for conversion on or before 7 April 2011 and those schools must have converted to academies by 1 September 2011. 

The General Annual Grant (GAG) funding for an academy of course includes:

  • the largest element – the school’s core funding being its delegated budget share (which is the same as the budget share the school received from the local authority adjusted to reflect any reduced business rates paid by an academy as a charitable trust and for insurance which is paid separately to the GAG); and
  • the LACSEG – which is the additional money to cover the central services which the local authority no longer provides to the academy (although the academies are free to buy these services back from the local authority should they chose to do so or they can purchase them from elsewhere).

Despite the Government strongly encouraging schools not to rush the important stages of conversion in order to qualify for this protected funding and make their applications on or before 7 April 2011 it is understood that a significant number of schools have in fact done so which is likely to lead to a flood of additional schools seeking to convert to academies during July and August in order to meet the 1 September 2011 deadline.

With local authority in-house teams already stretched, there is a significant risk that the in-house resource will not be available to support the significant number of potential conversions in their area.  Any resulting delay to the conversion process, particularly in light of the potential financial implications for the academy is likely to prove highly unpopular with those interested stakeholders in the conversion process.

Our Team

Bevan Brittan LLP has a highly experienced team who can support local authority clients on this academy conversion work.  The team has already dealt with 24 conversions and is already instructed to act for various local authorities on 24 further conversions in the coming months.  

This academies work includes experience of the following issues:-

  • Advising on the required arrangements to be put in place in connection with the school conversion to an academy where the existing school caretaker has a ‘tied-house’ as part of their terms and conditions of employment.
  • Drafting a replacement Special Educational Needs (SEN) Service Level Agreement between a local authority and a new academy.
  • The novation of existing construction contracts where there is an obligation on the converting school to pay a contribution towards the construction costs but which is only triggered on completion of the construction works which will now occur after the conversion to academy status.
  • Dealing with the novation of Sport England funding grants in connection with tied leisure facilities at converting schools. 
  • Advising on the novation, assignment and/or replacement of existing community use agreements and grant funding agreements in connection with tied leisure facilities at the school site. 
  • Advising on the extent to which model drafting on TUPE liability indemnities in the Commercial Transfer Agreement can be flexed.
  • Dealing with disagreements on repairing liabilities and schedules of condition.
  • Negotiating the extent to which academies may sub-let former local authority-controlled land following conversion.
  • Dealing with the particular issues arising when Church schools convert to academies.

Bevan Brittan is also currently acting for a number of local authorities in a judicial review of the government in relation to the reduction in Revenue Support Grant in connection with overall funding arrangements for academies so we are fully versed in all aspects of this issue.

If you are facing a significant number of conversions  and would like to talk to us about how we can assist you with these or indeed any of the other matters highlighted in this note, please contact one of the team below.

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