Revealed: Schools converting to academies cost councils in East Anglia more than £6 million
16:46 05 January 2016
More than £4m of debt has been inherited by local councils in East Anglia as schools convert to academies, it is revealed today.
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.