How academies are taking over the education sector
Starved of funds, some schools are having to fire teachers and cut lessons, while academies and private schools are paying their headteachers six-figure salaries. James Moore explains why the numbers are not adding up
If you have a child starting at a new school in September the chances are you won’t just have to provide a new uniform, PE kit and stationery. You’ll be asked for a standing order too. State education isn’t what it was: the de facto privatisation of it is under way. And the “voluntary” contributions to schools that parents are asked for can run to hundreds of pounds.
Sadly, they’re necessary. Schools need the money to make their numbers add up in the midst of a funding crisis, not to mention being able to afford “extras” such as cookery equipment, which aren’t really extras if the goal is to give children a properly balanced and wide ranging education. But there’s a problem.
One of the things that has accompanied every privatisation you’d care to mention is the runaway CEO pay of the people in charge of the formerly state-owned industries, whether it’s energy, water, rail, it doesn’t matter. Business pages are full of news about fat cats when the companies operating in these sectors release their annual reports.
Education hasn’t officially been taken out of the pubic sector but the pay train has left the station and is on the high-speed link to Cashville, particularly when it comes to the government’s beloved academies. Which raises questions about whether those parents are being fleeced? Just over half of Britain’s schools have either chosen – or been forced – to make the jump. The majority of them have joined chains known as “multi-academy trusts” or MATs and once the decision has been taken there is no turning back.
Becoming an academy takes a school out of local authority control, and in the process leaves it free from some of the checks and balances in the traditional system, including the pay structure for senior leaders. “In some academy trusts, greed, excess and waste have run out of control,” the Nasuwt union opined in a recent report into school funding entitled Where Has All the Money Gone?
It goes on: “Despite the school funding squeeze since 2010, much education spending still does not reach the frontline. Substantial levels of unspent reserves, inefficient and wasteful school-level procurement, together with excessive levels of academy trustee and CEO leadership pay, are now hardwired into the school system. “The union believes there is a need for urgent change in these areas, so that the available school and academy trust funding is used appropriately to support teachers to secure the best outcomes for all pupils.”
The excessive levels of trustee and CEO leadership pay it references has become an increasing source of scandal that is only adding to parental distrust of academies and resistance to academisation. It is also raising questions about the Department for Education’s continued promotion of academies. The government has responded to the controversy by firing off a volley of missives to trust bosses.
“Government orders non-compliant trusts to reduce excessive salaries,” the DfE trumpeted after the latest missive in May. It said Eileen Milner, chief executive of the Education & Skills Funding Agency, had written to 94 academy trusts on behalf of Academies minister Lord Agnew. Sixty-three of them had been “newly identified” as paying multiple staff members more than £100,000 annually, while 31 had “failed to provide adequate justification for doing so”.
Sixty-three academies had been identified as paying multiple staff members more than £100,000 annually, while 31 had failed to provide adequate justification for doing so
It was the fourth such letter.
Schools Week, the education newspaper, has been closely following the issue. Its editor John Dickens likens the situation over pay to the “wild west”. He says the problem the government has is that it “doesn’t really have any power to crackdown on CEO pay – all it can do is write strongly worded letters asking trusts to pay their bosses less”.
That helps to explain the number of letters sent out by or on behalf of his lordship. “We now have one academy boss on nearly £500,000 a year. But at least his bumper salary is for doing the tough work of turning around schools,” Dickens says. “The bigger scandal is how others have used the academy pay freedoms to massively bump up their salary – without taking on any extra responsibility or making a difference across the wide sector. One boss is now paid £260,000 – to run one school. His pay has doubled in seven years and his trust is the one that has been written to several times by the DfE.”
Dickens’ example of the £260,000 head is Colin Hall, the head of Holland Park School in Kensington, a school once dubbed “the socialist Eton”. It’s no longer very socialist. It has three more employees on more than £100,000. It’s no longer much of an Eton, either. In January The Independent reported that the school accounts also reveal that there have been a number of “significant defects”, including loose stone panels and “glass breakages”, to the school building as a result of funding cuts. That would never happen at the renowned public school where Boris Johnson got his education.
Holland Park is far from alone. Dayo Olukoshi, executive head of Brampton Manor Academy, in east London, was paid at least £220,000 last year – a rise of £20,000 on 2016-17. Adrian Reed, chief executive of the Boston Witham Academies Federation, earns at least £230,000. But the highest paid boss is Sir Dan Moynihan, who earns at least £440,000 for running 44 schools at the Harris Federation.
“It’s almost a case of make up a figure and assume they are worth it,” says Andrew Morris, assistant general secretary of the National Education Union. “There is no framework by which pay can be set on an objective basis in the academy sector. You have people willing to put their hands out combined with the neurosis of governing bodies that think they have someone good that they will never replace.”
Such thinking in the corporate sector is responsible for runaway CEO pay packages that now average more than £4m a year for companies in the FTSE 100. The education sector is a long way from that. But the direction of travel is little different.
“There is a real danger when we it comes to executive pay, that smaller or medium trusts will take their lead from the larger ones. Some have pay that is quite high and it is an unrealistic benchmark for them. If you’re going into the education sector you need to accept that it’s a public service,” says Sam Henson, head of policy and information at the National Governance Association, who is a veteran of the sector, having previously worked in a 30-school MATs.
But how did this education gravy train get on the rails? Academies are what were once referred to as “grant maintained schools”, a policy instigated by the Conservatives in the late 1980s via the Education Reform Act. One of its stated aims was to encourage a diversity of provision. Critics saw more cynical, and political motivations: the creation of these schools would reduce the power of local education authorities (LEAs), and especially Labour controlled LEAs. Grant maintained schools, funded directly by central government, subsequently became academies.
The idea of the multi-academy trust began to take shape under Labour. The thinking behind it appeared sound: if you have a failing school, wouldn’t it make sense to hand the job of turning it around to someone with a proven record of doing that?
Since the idea took hold, the number of such trusts has steadily increased, albeit sometimes in the teeth of opposition from parents. Good schools were incentivised to go down the route, becoming so called “converter academies”. Bad ones, those getting poor grades after inspections from school standard watchdog Ofsted, were forced to find a sponsor to oversee their turnaround, becoming sponsored academies.
At one stage the government had ambitions to force all schools to go down the route. Its white paper “Educational Excellence Everywhere” envisaged that the remaining local education authority schools would at the very least be in the process of converting by 2020. That has since been jettisoned, but ministers are still committed to encouraging them and many schools continue to feel pressured to go down the route. This despite the lack of good evidence to show they bring about an improvement in performance.
The two types of institution – local authority and academy – aren’t as easy to compare as it might look because of the wild variety in each sector and the fact that there are two types of academy. Converters tend to do well when compared to local authority schools but then they all started out as good schools. Sponsored ones struggle, but then they all started out as strugglers.
An analysis carried out by the DfE that looked at how schools starting out with the same Ofsted grades went on to perform found no significant difference between converters and local authority schools when it came to keeping their “outstanding” grades in subsequent inspections. Academies rated good did a bit better. But the study dates back to 2012/2013 and questions have been raised about the validity of the comparison.
One boss is now paid £260,000 to run one school. His pay has doubled in seven years. His trust has been written to several times
The reality is that there are some very good academies and some very bad ones. Henson says neither structure should be seen as the “be all and end all”. What there isn’t, is convincing evidence to show that the organisational upheaval involved in creating these academies has been worth it when the aim was to foster better education for children.
But the pay figures show that it has certainly been worth it for some of their leaders. Critics say the pay issue, and more wider governance failings at academies, highlight gaps in their oversight. No less than the chief inspector of schools, Amanda Spielman, warned earlier this month that trusts are not being held to account. Her inspectors are allowed to offer only a limited “summary evaluation” based on a sample of schools belonging to a trust, rather than on the trust itself. This stands in contrast to the system with local education authorities.
“The fact that Ofsted is unable to inspect trusts directly means parents and policymakers are only given a partial view of what is happening in our schools,” she said. She has good reason to be concerned in the wake of some of the high-profile failures such as the Wakefield City Academies Trust (WCAT), which collapsed in September last year, giving up its 21 schools amid a cloud of controversy over its finances that led to a police investigation. Although no crimes were ultimately found to have been committed, the affair sparked anger in the local community.
The Education Fellowship Trust is another example. Schools Week recently highlighted the government’s refusal to explain why the defunct trust set aside more than £100,000 for golden handshakes. When academy chains fail, it leaves their former schools stuck without a sponsor and in a very difficult position. They have become known in the trade as “zombie schools”.
Pay is far from the only problem that academies have thrown up. They also have the freedom to set their own term times, their own hours, and to opt out of the national curriculum if they wish to. They have very different governance arrangements to traditional schools, which critics say can leave parents out in the cold.
The NGA takes no position on the academies versus local authority debate, but it was moved to warn of a “democratic deficit” in the former. And it’s getting wider as MATs seek to improve their finances by gobbling up more and more schools. LEA schools typically have a governing body made up of a mix of local authority governors, appointed community governors, and elected parents. The show is overseen by the local education authority which has the responsibility to intervene if it sees signs of things going wrong.
Academy trusts, by contrast, are run by boards of trustees, who come from a variety of backgrounds. In the case of sponsored academies this can mean businesses or faith groups. After the initial set-up, the trusts appoint their replacements in conjunction with “members”, who are supposed to be “eyes on, hands off”.
If you want an analogy, they’re rather like outside shareholders in a public company. The role of those shareholders in holding boards to account is less than stellar, attested to by the spiralling levels of CEO pay.
It is scandalous that billions of pounds of public money are being spent by organisations that are not being held properly to account
Some still have local governing bodies, as with LEAs. Some have what are called “advisory boards”. It’s basically up to the trusts. Crucially, there is no formal obligation to involve parents. Henson says that one of the problems the sector suffers from is a “lack of design”.
“They have been left to their own devices,” he says. “I think there is a need to evaluate where we are. We need to ask what the role of MATs is. There has been a lack of debate over how they’re working. There is a democratic deficit in the way MATs are held to account. They shouldn’t just be accountable to government but to the wider community and parents as well.”
Chris Keates, acting general secretary of Nasuwt, says the union has been “consistently raising concerns about the lack of financial oversight and accountability in academy trusts”.
“It is scandalous that billions of pounds of public money are being spent by organisations that are not being held properly to account.” Keates wants to see “a commitment to a national regulatory framework that applies to all schools, that protects the rights of pupils, parents and teachers and ensures that public money is used for the benefit of children’s education.
“An enhanced role for local authorities would help the government to ensure that it has the levers it needs to ensure that all children and young people receive the high quality education to which they are entitled.”
Liberal Democrat education spokesperson Layla Morris is similarly critical of academies, accusing the Conservatives of having an “ideological obsession with academisation” that she says is “a waste of money”.
“Tens of millions of pounds a year is spent dragging struggling schools through massive upheaval for very little benefit to children. Meanwhile, the pay of some multi-academy trust CEOs is a slap in the face for those schools who are sacking teaching assistants, closing their doors early or crowdfunding for basic supplies just to get by.
“Academisation has created confusion and fragmentation in the schools system, stopping councils from ensuring that every child, particularly those who have been excluded from one school already, have a school place.”
Morris says the Liberal Democrats would give powers over admissions and managed moves back to local authorities, allowing them to sponsor new schools and take over failing ones. “We cannot allow the Conservatives’ obsession with school structures to mean that children do not have a school to go to. It’s time to stop the tinkering and let teachers and governors focus on providing the best start in life for our children.”
But Leora Cruddas, CEO of the Confederation of School Trusts, the sector’s representative body, defends the sector. She has also held a senior position in a local education authority and says similar problems of high pay and poor governance can crop up there too.
“The key difference is that when a trust is investigated by the Eduction & Schools Funding Agency it publishes its report in a single place. It makes it look as if there is a problem in the academy sector when local authorities are under no obligation to publish,” she says. “The School Teachers Pay & Conditions document, which governs teacher and leader pay in maintained schools, says if you are the headteacher of a single school, you can earn up to £148,000. That’s to lead a single school.
“In education, the CEO holds all the responsibility. I would argue that they should be the highest paid employee. If you’re leading a MATs surely the differential between your highest head and yourself could be more than £1,500? There are 3,000 trusts. We can name a handful where it has gone badly wrong.”
Lord Agnew, meanwhile, insists that academies are “helping to drive up standards in schools across the country. The latest figures show that 85 per cent of children are in good or outstanding schools, compared to just 66 per cent in 2010. This is in part down to our reforms, with more than 50 per cent of children now studying in academies and free schools.
“Alongside this, it is important that trusts have clear guidance to help them use every pound to deliver a high standard of education. That is why, earlier this month, we published new guidance on setting pay for top executives to remind academy trusts that salaries should be a reflection of responsibilities and the performance of schools under their control. This will help all trusts set executive salaries at a level that is publicly justifiable.
“Over the last 18 months I have committed to curbing excessive executive pay in a tiny minority of trusts to ensure it is fair and proportionate to the task in hand, and this approach is already yielding positive results.”
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