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Revealed: Schools converting to academies cost councils in East Anglia more than £6 million

16:46 05 January 2016

County Hall, Norwich.
Picture by SIMON FINLAY.

County Hall, Norwich. Picture by SIMON FINLAY.

More than £4m of debt has been inherited by local councils in East Anglia as schools convert to academies, it is revealed today.

Norwich South MP Clive Lewis. Photo: Steve AdamsNorwich South MP Clive Lewis. Photo: Steve Adams

Redundancy payments totalling more than £2m were also paid out to staff leaving these schools around the time of conversion, with councils picking up the tab.

The costs relate to schools in Norfolk, Suffolk and Cambridgeshire and details can be revealed following a series of Freedom of Information (FOI) requests. Figures cover the period since 2008-09, the year the region’s first academy, the Open Academy in Heartsease, opened.

Local authorities have to pay to cover any financial deficit outstanding at the time of a school’s conversion to academy status, including debts and legal fees.

Critics say that this £6m spend on academies is to the detriment of schools not involved in the scheme.

But a Department for Education spokesman said it was right for local authorities to pay so that the schools could start with a clean slate.

“Councils are only required to cover a school’s deficit when it has become a sponsored academy after a prolonged period of underperformance, and the deficit was accumulated under council control,” the spokesman said. “Academies are a vital part of our plan for education and are transforming the education for millions of pupils across the country.”

Clive Lewis, MP for Norwich South, said these payments showed “preferential treatment” for academies as it was “the ideological pet project of this government”.

He said that academies did not offer better value for money, and felt that debt was being offloaded to the taxpayer while public assets were given away to the “private sector”.

Background from the Department for Education

The Department for Education has defended its position over the cost of academies to local councils.

A spokesman stressed that there were only costs if a school started from a deficit position and opted to become a sponsored academy.

“Where a school chooses to become an academy to take advantages of the freedoms they are granted, deficit costs are paid back to the local authority by the Education Funding Agency,” the spokesman said. “More than two thirds of 5,326 academies have converted by choice, meaning the council has no obligation to cover any deficit costs. Just 1,523 are sponsored academies.

“We have always been clear that local authorities need to work with schools to prevent any deficits and surpluses becoming significant in the first place.

“When a school becomes a sponsored academy, it needs to be focused on securing rapid improvements. It’s unreasonable to expect a new school to start with inherited debt. We provide model legal documents, templates and guidance to help schools and councils cut bureaucracy and keep down any unnecessary admin costs when they become an academy.”

“The public are picking up the tab for what in my eyes is benefiting a very small number of people,” he said.

Since 2008-09 Norfolk County Council has written off £1,986,218, Suffolk County Council has written off £1,997,679 and Cambridgeshire County Council has inherited £75,628 of debt. The largest deficit written off on conversion was £552,421 for Ormiston Victory Academy in Costessey. In addition to local council funding, some schools got more taxpayers’ money from central government to address deficits.

These included Ormiston Victory Academy, which received £1m in 2011-12, and a further £235,000 the following year, while Norfolk’s first academy, The Open Academy, received £230,000 in 2011-12. Total inherited council debts for three schools – The Hewett School in Norwich, Dereham St Nicholas Junior School and Marshland High School near Wisbech – were not revealed by Norfolk County Council as officers said details were not finalised yet.

A Norfolk County Council spokesman said it was government policy that schools judged to be inadequate should become academies.

“Several schools [that are now academies] were facing difficulties ahead of conversion, including performance or budget challenges,” the spokesman said. “Staffing changes are likely to have been in response to these issues and are likely to have happened regardless of whether the school had converted or remained a maintained school.”

One-off payments to staff leaving these schools include redundancy, settlement agreements and payments in lieu of notice.

In Norfolk these totalled £1,342,365, in Suffolk it was £638,147 and in Cambridgeshire it was £57,769. The most money paid out to staff was in Norwich, with £183,220 at Sewell Park College and £166,933 at The Hewett School.

A timeline of costs

In Suffolk and Cambridgeshire, no schools converted to academy status before the May 2010 general election.

Two Norfolk schools converted under the previous Labour government, costing the county council £533,741 in inherited debts and payouts.

Open Academy, in Norwich, became Norfolk’s first academy in September 2008, leaving a debt of £202,386 and payouts of £73,353 to departing staff of the predecessor school, Heartsease High.

City Academy Norwich converted in September 2009 leaving a debt of £138,168, with payments of £119,834 to staff of the predecessor school, Earlham High.

The remaining £5.5m of costs came under the coalition government.

23 comments

  • The authority takes out 'costs' which just so happen to be extortionate. Academies buy in the services at a much lower cost, and some, they don't even bother with, in order to save even more. Yes, if you assume that everything that is taken out is at 'cost price' then the funding may be similar, but Academies effectively receive more per pupil as they aren't hamstrung by having to stump up cash to keep the LEA going. It's top slicing, just in another form. Can anyone prove that the per pupil funding for academies is the same for all students in the county, let alone the same for students in different academy chains? And do we include the little perks some academies get?

    Report this comment

    OldSchool

    Thursday, January 7, 2016

  • @JohnBoy If a school is under local authority control then the Council, the local authority, is responsible. I agree individual schools spend their budget as they see fit but the LA can question this. @OldSchool IF you can prove that funding per pupil in academies is higher then present your evidence to Archant they are keen to print a good piece of news. What I think you are getting confused about is that the local authority receives the funding then takes out costs before distributing the remainder for the schools to use for education. Similarly a Multi-Academy Trust takes in money from government, takes out costs before distributing the remainder for the academies to use for education.

    Report this comment

    George Ezekial

    Wednesday, January 6, 2016

  • Clive Lewis press release filed as a news story? The cost was paying off the debt they inherited. But don't let the facts get in the way of a headline.

    Report this comment

    a fine city

    Tuesday, January 5, 2016

  • Schools have been responsible for their own finances for decades. The Council shouldn't have to meet the costs where they haven't carried out this responsibility. Can't have it both ways.

    Report this comment

    Johnboy

    Tuesday, January 5, 2016

  • Schools have to pay pay increments if all targets on performance management are met. Or should do anyway. I know of at least one school that refused this pay progression despite all targets being met, and instead added in another target after the year had finished, and failed an individual on that. Funnily enough, certain union bosses who seem keen to stick their oar in, in most cases, weren't keen to take the case on. So, some schools are obviously getting round it, and not sticking to their obligations and saving the taxpayers money. Actually, these cases were in academies (surprise surprise) who seem to do what they want. The Unions have lost all power and are left with bluster in the press. They either have no will to fight the academies, or are unable to do so, either way, they aren't much use anymore. Quite a lot of these costs mentioned in the report are costs in paying staff off. These are staff who, either don't want to stay on under the academy taking over, or are not wanted by the academy. If the academy takeover didn't happen, these costs wouldn't be accrued. The whole thing is one big financial mess, but the question that everyone should ask themselves is whether they agree with private business taking over (and keeping) public assets, receiving huge lump sums for doing so, and then receiving higher funding per pupil than their LEA competitors?

    Report this comment

    OldSchool

    Tuesday, January 5, 2016

  • I think Rhombus hasn't realised, in the situation that he mentions regarding teachers pay, is that the market will prevail.Teachers have household expenses so will seek employment at schools that do pay the going rate. This may well mean that over budget schools become more over budget as they pay supply teachers or send children home for X days per week because there isn't any one to teach them.

    Report this comment

    shocked at stoopidity

    Tuesday, January 5, 2016

  • ....."is rhombus saying that contractual increases in pay awards shouldn't be made"..... yes. Of course the teachers may well sue the LEA or the school, not sure which, and bring down the school. What a pity teachers would rather bring down a school than tighten their belts and help bring the school back into good financial health.

    Report this comment

    Rhombus

    Tuesday, January 5, 2016

  • I've written to EDP asking that they cancel my account - most of my comments on any story never appear

    Report this comment

    Catseye

    Tuesday, January 5, 2016

  • My innocent comments also got deleted has De Souza managed to get control of the EDP too?

    Report this comment

    Jbone

    Tuesday, January 5, 2016

  • Whilst being an opponent of the Academy program I must say that the headline and opinion shaping of this article is wrong. The actual "cost"to the councils was past accumulated overspending on these underperforming schools (which at the relevant times could have been said to be to the detriment of the majority) which the councils have had to write off. The real scandal is the lax or deliberate budgetary oversight by the councils. The supreme irony being that in the case of Norfolk the budgerary mismanagement occurred largely under a Tory regime and now a Labour led coalition is supine towards academisation.

    Report this comment

    guella

    Tuesday, January 5, 2016

  • Some absurd comments, as usual. Hospitals are in debt, is rhombus saying that contractual increases in pay awards shouldn't be made? Excellent. So no pay increases to anyone in the public sector at all. Except for politicians. Fortunately rhombus isn't in a position of responsibility for education, health, public services etc.

    Report this comment

    Davidbrian552

    Tuesday, January 5, 2016

  • A more general point...should schools award pay increases whilst the school is in debt? An interesting question to the LEA would be how much of a schools debt prior to academisation was down to pay increases beyond what the school could afford to pay?

    Report this comment

    Rhombus

    Tuesday, January 5, 2016

  • So a lot of Norfolk and Suffolk schools had reached a sort of critical financial meltdown, where the only option for the LEA was to rob Peter to pay Paul...."From each according to his ability, to each according to his needs"......Unsustainable I'm afraid, and the LEA had to kick the proverbial cuckoos from the LEA school nest.

    Report this comment

    Rhombus

    Tuesday, January 5, 2016

  • An honest approach to this article would be to attribute the source of the pretty green poster. Otherwise some one might think it is a political PR poster? What it does show is what a dreadful position the councils had run up before they were converted to academies. How could they have let this happen?

    Report this comment

    andy

    Tuesday, January 5, 2016

  • As my last comment has been deleted, lets try again. The borrowing was run up by the councils! They were responsible for it so of course they should pay it.

    Report this comment

    andy

    Tuesday, January 5, 2016

  • This academy business what actually is it supposed to achieve, will calling a school an academy improve the standard of education I have no idea, it seems to me its just a case of the Tories gradually covertly privatising everything they can, next it will be fee paying academies and are these academies actually more cost effective or not, don't know the answer to that one either.

    Report this comment

    trev57

    Tuesday, January 5, 2016

  • It can be argued that these costs were run upcaused under the LA, and that is appropriate for the LA to cover some if not all of them. I suppose as an alternative, one could hunt down the previous head teachers and governors and get them to fork out the cash?

    Report this comment

    G_of_Norwich

    Tuesday, January 5, 2016

  • This is not a story about the evil Acadamisation of schools it is an indictment of the management by Norfolk County Council and Suffolk County Council. IF when they are grant maintained they are managed well then this cannot happen. It is quite right that the incompetance which causes the problem is held to account. What this article does not make clear is how many schools in Cambridgeshire have been deemed worthy of compulsory acadamisation.

    Report this comment

    George Ezekial

    Tuesday, January 5, 2016

  • @el84 - I agree with the sentiment, but the nhs is an object lesson in how to burn through cash without worrying about where it comes from. The good old nhs budget is about 140 odd billion and we still run well beyond that!

    Report this comment

    Rushallchap2

    Tuesday, January 5, 2016

  • Charging us to subsidise private business is totally wrong. Other services are suffering cut backs, think how much good this money could have done in the NHS instead of being wasted on private companies taking over state run schools.

    Report this comment

    el84

    Tuesday, January 5, 2016

  • Toxic Tory's moral millions are paid for by us, they show no compassion and their party is in deep denial over the bullying and subsequent death of one of their activists. Lord Feldmann should resign all of his party positions, how dare he is carrying on like he is, the real reasons will come out eventually.

    Report this comment

    ingo wagenknecht

    Tuesday, January 5, 2016

  • Tory privatization = if you make a profit, you keep it, if you make a loss, we bail you out...

    Report this comment

    eggy12

    Tuesday, January 5, 2016

  • Private profit Taxpayer risk = must be a tory government. When will the prople of the UK learn?

    Report this comment

    Rob44

    Tuesday, January 5, 2016

The views expressed in the above comments do not necessarily reflect the views of this site

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