academies - what's in it for the private sector?

[morningtoncrescent62]

I feel very ignorant having to ask this. But I really don't understand what's in it for the private sector companies and individuals who run academies and academy chains. They're not allowed to be run for profit, is that right? So apart from a few lucrative chief executive-type posts in the larger chains, what do individuals and groups get out of running them? Sorry if this is a very stupid question but I'd be very grateful if someone could explain it.

[Mishaps]

Thank you for the detailed explanations above. I am clear that companies would not be in the market for running academy trusts unless there was something in it for them - and that something is bound to be money.

[Ingleton]

Mishaps, there's also something called Corporate Social Responsibility although cynics would boil that down to money too ....en.wikipedia.org/wiki/Corporate_social_responsibility

[BombadierFritz]

Lots of Conservative MPs and councillors have interests or family interests in academies and free schools. The party of corporate social responsibility :)

[BombadierFritz]

Its not always about money of course

Lots of interest from religious organisations too. Possibly because of social responsibility but i think more likely an opportunity to brainwash

[Ingleton]

Bombardier for people in Conservative councils those interests are well represented in the LA too so little will change. It's Labour controlled councils that will see the biggest changes, which if course is the government's aim.

[BombadierFritz]

Do you think so? Were state schools using their companies services as well?

[BombadierFritz]

Actually, i think all sides in politics are equally likely to line their own pockets out of this. Greed is pretty universal in politics as expenses scandals etc show us

[morningtoncrescent62]

Thanks, everyone, for these answers, you've really helped me to understand.

[roundaboutthetown]

What I understand is that it will not improve state education for all schools to be forced to become academies, it will just satisfy a political agenda. At the very least, it will in the medium term harm the quality of state education as funding is already inadequate for a burgeoning school population as it is, and we have a shortage of teachers and headteachers. The last thing we need in the next few years is for yet more money to be wasted on unnecessary changes. Why, oh why, force a good or excellent school to change into something it doesn't actually want to change into?! It's not because such schools don't know what's good for them, it is purely and simply because it is what the government wants to force them to do. Why, oh why, pretend that schools are only able to provide high quality teaching if they are structured as academies? That's just a wilful refusal to listen to schools which do not want to become academies. The proposed changes will not solve the lack of school places and lack of good quality, qualified teachers. Imho, the only thing this government's DfE is any good at is making teaching look like a shitty, thankless job.

[prh47bridge]

There are far more claims of financial irregularities at free schools/academies

Really?

The London Borough of Brent audited 44 community schools over a 2 year period from September 2010 to September 2012 and found irregularities at every single one of them. This came after allegations of a £2.7M fraud at one school. Auditors found that schools were paying headteachers too much, not keeping proper financial records, not checking debit cards used by headteachers and not getting their annual budgets approved.

[roundaboutthetown]

Sounds like the London Borough of Brent is on the ball, then! Good job. What has that got to do with academy schools? Is the London Borough of Brent allowed to audit them?...

[disappoint15]

Some of the audit findings will have been minor procedural things like use and filing of order forms, though, rather than deliberate fraud. The LA audits are usually very thorough. Which brings us back to who will be auditing academies if LA oversight is removed.

[caroldecker]

Many rich people want to give something back but do not trust government bodies. Academy schools allow them to oversee their charitable donations.
Some companies, such as JCB, struggle to find school leavers with the right skills, so get involved to ensure they have the right training.

[prh47bridge]

What has that got to do with academy schools

Nothing directly. The point is that an earlier poster was claiming that there are more claims of financial irregularities at academies and free schools than at community schools. I was questioning this assertion.

Which brings us back to who will be auditing academies if LA oversight is removed

They must have their accounts independently audited. Additionally Ofsted take an interest in the financial management of the school and the EFA and Charity Commission can investigate allegations of financial irregularities. In some circumstances the National Audit Office can also get involved.

[GiddyOnZackHunt]

For any institution that is not public sector, you will be driven by costs and profit versus outcome. In an academy system, a 'head' can be an unqualified teacher who is head of a number of schools. They may choose to subcontract their premises or apply to sell them off to generate funds.
Those funds can go in attracting the 'right' unqualified management teams.
There are a myriad ways in which a non-profit can reward those involved. The proportion of remuneration for 'leaders' v 'staff' is increasing.
They can employ unqualified staff on non union payscales. A race to the bottom.
I have a DBS check, knowledge in a core subject and an interest in working school hours. I would be a prime applicant. I'd be a crap teacher.

[GiddyOnZackHunt]

carol there is nothing to stop JCB forming an academy to take dc to form into their future workforce right now. How you can tell at 11 who the 'right' children are is another thread but if they have a theory, they can crack on right now.
Job done.
No change required.

[roundaboutthetown]

Lovely. So one of the joyous freedoms that academy schools have is the freedom to spend time considering who should audit them. Whoopee doo. I'm so happy for them. Lucky buggers.

[BombadierFritz]

Yep, just doubled checked, i did include on this thread the attempted political cover up of fraud that the dept for ed discovered but chose not to report to the police.

[caroldecker]

Giddy They already have, my post was a response to the OP as why companies may be involved with academies apart from direct financial gain.

[nlondondad]

Carol

It is important however not to loose sight of the fact that Academy Schools are paid for by the taxpayer. So when a wealthy person gets involved in running an Academy School, they may or may not contribute money to the school, as anyone can donate to a school if they wish, but even if they do, which is rare, in almost all cases the majority of the money is from the taxpayer. Yet it is the rich person who acts as sponsor who gets all the control, and enjoys significant powers of patronage, having for example, Headteacher posts in their gift.

I do not wish to knock people who choose to give their time and/or money to the education of children, but I think it raises some issues if on the ground control is to move away from Governing Bodies containing democratically elected parent Governors and democratically elected Staff Governors, to "expert" Trust Boards appointed by whomsoever established the Trust in the first place and their "heirs and assigns" thereafter.

[nlondondad]

So I think we are staring to get some clarity on the answer to the OPs question.

There seem to be three reasons reason why a private company or individual would get involved:

1. Under the current system, they can, without doing anything illegal, make money out of it.
   

1. They get powers of control, which gives them powers of patronage.
   

1. In the future, profit making may be allowed in which case getting involved now makes sense as there is no financial cost or risk involved as all the land, "plant" and running costs are furnished by the state. an asset is acquired for nothing which MIGHT in the future be (more) exploitable, after a change in the rules....

[nlondondad]

@ingleton sorry to have taken so long to get back on this but you made an important point.

I explained that Academy Trusts are a charity but a kind of Charity called an "exempt Charity" which means that they are not regulated by the Charity Commission but by, in my terminology, the Secretary of State for Education. I was being careful to be precise in this by the way as there seems to be some uncertainty in peoples' minds as to whether the bit of the state apparatus that does the day to day work is the DFE or the EFA but as the person in charge of both, and accountable to parliament for them IS the SofS that seemed the safest way to express it. Prh seems to prefer to say that its the job of the dfE to do it, but this is actually just another way of saying the SofS does it.

So having clarified that (I hope!) on to your point. You remark:

"Universities and other types of institutions are exempt charities too so it's not a new thing."

Certainly the existence of SOME exempt charities is not a new thing. And it did not start with Academies. What IS new is the numbers.

According to the Economist about 4000 schools are academies now. When they are all converted there will be 20, 000 Academies.

www.economist.com/news/britain/21695543-government-plans-expand-chains-academies-starbucksification-schools

Before Academies started there were a handful, not more than a few hundred "exempt" charities and they tended to be bodies like universities which already had, specialist, robust regulator bodies like HEFCE. There is already evidence that regulating 4000 academies is causing problems. How is the DfE which has had big cuts to manpower going to manage when the workload goes up five fold?

[prh47bridge]

Before Academies started there were a handful, not more than a few hundred "exempt" charities and they tended to be bodies like universities which already had, specialist, robust regulator bodies like HEFCE

That statement is wrong on every count.

Until 2012 every church that was part of a recognised denomination was an exempt charity unless it had an income of more than £100k per annum. Go back a few years more and they were all exempt charities regardless of income. So there were thousands of exempt charities - around 40,000.

The statement is also wrong about regulation. For the vast majority of exempt charities the regulator is technically a politician. For further education corporations the regulator is the SoS for Business, Industry and Skills. For VA, VC and Foundation schools the regulator is the SoS for Education. For sixth form college corporations the regulator is the SoS for Education. For those museums that are exempt the regulator is the SoS for Culture, Media and Sport. For Kew Gardens the regulator is the SoS for Environment, Food and Rural Affairs. Community Benefit Societies and Registered Friendly Societies don't have a regulator at all. CofE and Methodist Church Investment Funds don't have a regulator at all.

The only exempt charities with what nlondondad would describe as specialist, robust regulators are universities and higher education corporations where the HEFCE is the principal regulator.

[BombadierFritz]

www.theguardian.com/education/2016/mar/28/perry-beeches-academy-chain-stripped-schools-critical-finance-report

The new academy chain is headed by a (labour this time) councillor - all political parties involved in this business opportunity it seems.

[nlondondad]

Oh good PRH.

Having obfuscated on the point that I made that Academies are exempt charities regulated by the SofS for education, by "disagreeing" and saying not a politician but the DfE (which is a legally meaningless distinction), you have now conceded that in fact the regulator of Academies IS Nicky Morgan.... As I wrote in the first place.

So they are regulated by a politician and not by the independent Charity Commission. Glad we have sorted that out at least.

As for the rest as the context of what I wrote, and this thread made perfectly clear I was talking about the exempt charities regulated by the SofS for EDUCATION. And my statement is therefore entirely accurate. Before Academies there were relatively few exempt charities regulated by the SofS for Education, and many of those robustly regulated by other bodies. VA schools for example, often, in practice, regulated by churchs.

By the Economist's reckoning the number of exempt charities regulated by the Secretary of State for Education should all schools in England become Academies could increase by almost 50 fold. Its a big increase in admin load for the Secretary of State )or the DfE or maybe, the EFA). If it happens.