Decision Maker: Cabinet Member for Education Skills and University
Decision status: Recommendations approved
Is Key decision?: Yes
Is subject to call in?: Yes
To approve the closure of a maintained school and authorise the execution and completion of a Commercial Transfer Agreement with the Academy Trust and the grant of a 125 year lease of the land
The Academies Order was issued by the DfE on 6th July 2017 and the Council is obliged under the Academies Act 2010 to cease maintaining a school on the date it opens as an academy and to co-operate with the academy conversion process once the Order is issued.
The Council’s consent is not required for a school to convert to an academy and if the Council does not cooperate with the conversion process and negotiate and enter into lease arrangements and a CTA, the Secretary of State has the power to make transfer schemes under the Academies Act 2010 in relation to property, land, rights and liabilities (including rights and liabilities in relation to staff) which would be binding on the Council. It is therefore preferable for the Council to reach agreement with the Governing Body of the school and Academy Trust and enter into the property arrangements and negotiate the CTA within the constraints of the Act, rather than be subject to transfer schemes made by the Secretary of State with only minimal protections for the Council.
Jack Hunt School is a Foundation Trust secondary school. As such, the land and buildings are owned by the school and the staff are employed by the Governing Body. Therefore, the Governing Body of the school will enter into a land and buildings transfer freehold with the Academy Trust and the staff will transfer from the Governing Body to the Academy Trust.
The CTA sets out the respective obligations of the Governing Body of the school, the Council and the Academy Trust arising from the academy conversion in relation to employees, contracts and assets (other than land), and the liabilities of each of the parties in that regard.
Under the proposed terms of the CTA, the Council is obliged to assign the benefit of contracts entered into by the Council for the purpose of operating the school, to the Academy Trust, and recommendations 3 and 5 therefore request authority to enter into a Deed of Assignment or Novation with the Academy Trust to give effect to the terms of the CTA.
The Governing Body of the school is also obliged, under the Act and proposed terms of the CTA, to assign and/or novate contracts it has entered into for the purpose of operating the school, to the Academy Trust.
There is a charge of £5,000 from the Council for every school converting into an Academy to contribute towards the associated costs for the Council.
It should be noted that since inception of the PFI contract in 2006 Jack Hunt School, Queen Katherine Academy and Ken Stimpson Community School have paid the Council for the cost of their utilities through payment of their contribution to the Council’s payment of the unitary charge. The Council has paid the utility providers direct for the cost of all utility services to date. The Council has exercised its discretion under The Education Act 1996 and the Local Government Act 2000 to continue this arrangement following Jack Hunt School’s conversion to an academy until its new financial year commences in September 2018. From 01 September 2018 the academy will then pay its utility costs direct to the utility providers. The academy’s contribution to the unitary charge will be reduced accordingly. These arrangements are set out in the Schools Agreement.
Refuse the closure of Jack Hunt School and the transfer to academy status: Once the school has been accepted for academy status by the Secretary of State, the Council is required to support the decision. Failure to cooperate could result in the Secretary of State making transfer schemes which would be binding on the Council.
Not entering into the required PFI documentation: This option was rejected as it is a Department for Education requirement to enter into the Schools Agreement and Principal Agreement as part of the process for academisation of a PFI school. A Deed of Variation to the PFI contract will capture the necessary amendments to the Project Agreement as a result of the conversion.
Not entering into a Dual Use Agreement: This option was rejected as the Dual Use Agreement sets out the terms under which the swimming pool facilities and the gym are used by the academy and the community.
Not entering into Deeds of Assignment or Novation to assign the Council’s interest (or novate if applicable) in the contracts listed under recommendation 3 and 5: This option was rejected, as this would result in the Council not having the proper documentation in place with the Trust.
Not to use discretion in respect of the mechanism for payment of utility costs until the new Academy financial year: This option was rejected as it is consistent with the practice adopted by the Council whilst the school was a maintained Foundation Trust and will not be a significant cost during the period between conversion and the new academy financial year.
Publication date: 16/02/2018
Date of decision: 16/02/2018
Effective from: 22/02/2018