Did Supply in a new Academy yesterday and feel sad

I see you have gone back to alleging criminal behaviour - creative accounting, etc. It does, of course, happen in both the state sector and the private sector.

I am intrigued as to why opponents of academies think it is ok to pay LA bureaucrats shedloads of cash from the schools budget but not people doing similar jobs in academy trusts.

I agree that an academy chain should only use its own subsidiaries if overall it will provide better value for the schools. The fact that the chain retains any profit made on the job if it uses its subsidiary can make it harder for some to compete, of course. An independent contractor would need to have lower costs so that they could do the job for a lower price and still make a profit.

Do please name an academy chain that is run for profit. As far as I am aware there are none.

prh, a bit of creative accounting and overseas bank accounts gets round that little problem. Also, paying executives shed loads of cash tends to account for rather a lot of profit.

The point is that academy chains, ARK, for example, use only their own subsidaries for building work regardless of whether their services best meet the needs of the school or represent best value for money etc. As these chains get bigger, they push out competition as smaller, local companies have less work to tender for.

Think Tesco vs corner shop. My perspective is that giving for profit companies (which several of the new academy chains are, with more to come out of the wood work) increased purchasing power is not a desirable way forward for our education system.

It actually means more money for those involved in and associated with the academy chains, not the school.

Talkinpeace2 - You are alleging criminal activity. It can, of course, happen. It happens in the state sector too.

Rosebud05 - I've tried to explain this several times but you still don't seem to grasp the basic point that an academy buying services from its profit making subsidiaries means more money for the school. Let me try again.

An academy needs some building work done. It could pay a commercial contractor to do the work just like LA-controlled schools. The contractor charges, say, £10,000 making £1,000 profit. That £1,000 profit goes into the contractor's pockets. Alternatively it could pay its subsidiary to do the work. Let us assume that the charges and profit level are the same. So it pays £10,000 to its subsidiary which makes £1,000 profit. However, as that subsidiary is wholly owned that profit comes back to the academy chain which must, as a charity, spend it on the schools. So the net result is £1,000 more to spend on the school than if it had used a contractor.

no rosebud, we are not part of a chain; we are totally independent but have come together to work as a group. any one of us (not many of us) can walk away at any time; but each school has particular strengths the others can learn from; and areas which others can help improve on.

Yes, Boschy, they're called academy chains.

Who are generally better at making themselves a profit by buying in their own services than educating children, as the performance data produced by the Dfe shows very clearly.

www.guardian.co.uk/commentisfree/2012/feb/14/crony-capitalism-corporate-schools?INTCMP=SRCH

again, what Kez said "I can see local groups of Academies getting together to source some things, so they can gain economies of scale as well as access to the competitive market place."

we have done exactly this, and also with cross-curriculum benefits, sharing staff and expertise, training for staff and governors etc etc etc.

I recommend you start by reading the Academies Financial Handbook. Ask your colleagues to lend you a copy as they will, I'm sure, be fully conversant with it given their expertise.

link?
just that the companies act disclosures are not onerous, not are the charity ones
is there an additional burden on academy schools?
I note that former colleagues are suddenly putting 'academy school audit' in their expertise on linked in but am not clear what the legal framework is....

An Academy is subject to external, independant, audit and strict disclosure requirements.

The risks to budgets from corruption in school management is exactly the same as exist currently under LEAs. Far too many stories about council corruption (from both counsellors and officials) and occasionally SMT members.

prh
your schools knowledge is second to none, but you need to read up more about Companies Limited By Guarantee and how Charity companies can extract money from their revenue streams.
There are lots of clever ways to make things disappear and the incentive will all be with the SMT of academy schools rather than with YPLA
especially a few years down the line when the governing bodies have been tamed

Academies can buy services back from the LEA or from the general market.

One of these, as an example, is payroll services. There isn't suddenly a new market being created for this service - outsourcing payroll has been around for eons and it is a competitive market. So, if the LEA didn't exist, and one outsourcer put it's prices up, the Academy can move to another.

There is a whole competitive market place out there for, probably, everything an Academy could want.

One disadvantage an Academy faces if it shops on its own is lack of economies of scale. I can see local groups of Academies getting together to source some things, so they can gain economies of scale as well as access to the competitive market place. Or, if the LEA are as good a value as the marketplace as many people argue, then I am sure Academies will use them.

Academies and free schools are run by charitable trusts, not private companies. And they do not have any freedom to set their "charges". The government tells them how much money they will receive per pupil.

Competition.

When the LAs are all closed and private companies step in to fill the gaps, what's to stop them putting the prices up?

I suspect a lot of schools will look to buy back LEA services. It will be good in the pockets where the provision wasn't so good, there will now be an incentive to improve.

I also hope the YPLA are developing their support system so it is robust if requried.

I am not anti academies per se
I AM anti the sponsored ones as certainly my local one was given for political rather than educational reasons
my DCs school is a new academy and I'm waiting for the next governor vacancy to go in and support it
I'm lucky that our LEA is big and strong and I know that the bulk of the schools are sticking with the LEA services in the mean time
I also know that some LEAs are frankly crap and the sooner schools are not hidebound to them the better

my big problem with MUCH of recent political decision making is that it is based on the advice of consultants who are pretty little ex public school kids who do not have an effing clue and did not even REALISE things like the insurance issue until it was too late!

HOPEFULLY somebody, somewhere inside the Dfee is quietly working out contingencies so that when an academy fails catastrophically the children will not suffer too much.

"Governing bodies were not tasked to make a decision on a national and political level. They were tasked to make the best decision for their school."

I agree (2ndary school governor here, or in fact director now we are an academy).

This is what we did; it made sense for us on so many different levels, not least because the LA education dept was disappearing before our eyes; and also because it gives us greater freedom. We were not a failing school, we are one of the latest round of converter academies. We have not and will not change teacher contracts nor school hours. We've got a bloody fantastic SMT, and a "strong, clear" governing body (so Ofsted said a couple of weeks ago, when we got Good all round under the new and more stringent framework).

For us its business as usual and in fact business better than usual because we have more freedom - and it was the best decision for our school, in our circumstances.

Extra insurance costs - yes. Your point though, you continually cloud - first with quoting £800k per annum (no) and the implication it will bust Academies. Second, in assuming the only money an academy will get is 'the bung' (no - and the bung went a year ago anyway). Thirdly, you notice extra costs but there is no mention of the savings Academies can make by accessing services privately.

Politically, it's fine being anti-academy. If you read back, in many ways - although different ones to you - politically, I would prefer a different system.

However, financially, it is different for every school and strategically it is different for every school and that actually makes Academy status a good thing for some when the decision is made on a financial and strategic level.

Governing bodies were not tasked to make a decision on a national and political level. They were tasked to make the best decision for their school.

Kez - I've just looked up the LACSEG
and my point is that if Academies ever have to cough up for insurance premiums, it will be NEW money out of the education budget - because there are no premiums currently being paid by the LEAs
so the transfer does not include an allowance for insurance

HOPEFULLY the Dfee will take the pleasingly socialist approach of continuing to underwrite the deemed insurance for academies, ensuring that the money goes to teachers and pupils rather than the bosses of insurance companies.
we shall see !

My last post refers to TalkinPeace2

By that comment, you obviously don't understand how the LACSEG works.

Kumquat - but I don't ever use them in lessons. And the cost of copying short revision booklets for pupils to take home diesn't even begin to equate to textbooks / replacing lost ones etc

Kez,
even if it is 80k, that will swallow up the whole of the £350k bung in the first four years, leaving the school in a worse financial situation than before from then on ....

For parish councils with village halls, £16k premiums are nothing out of the ordinary so scaling up and taking into account the risk profile of some secondaries .....

I did say I expect it to be somewhat higher tham my domestic. I'm sorry, I simply do not believe £8m of buildings insurance cover will cost 800k per annum for a school in normal circumstances. That is 10% of the cover! In fact, although the Anti-academy website brings the matter of insurance and disparity issue up, even they are quoting costs 10x less than you are.

I'm not saying the underlying point you are making doesn't have foundaton but the amounts you are quoting appear to be scaremongering.

antiacademies.org.uk/2011/10/morehigher-insurance-costs-for-new-academies/