blake lapthorn academies conference - september 2011

Blake Lapthorn Academies seminar

Tuesday 13 September and Friday 16 September 2011

Welcome

Elizabeth Davis, Partner

Blake Lapthorn Education service

South’s premier full service law firm Education: – Schools and FE service (includes nursery)– Higher education service

Main areas of work– Corporate and commercial, – Governance, – Employment, – Property and construction and – Disciplinary and regulatory

Academy pros, cons and conversion process

Elizabeth DavisPartner

[email protected]

mailto:[email protected]

Track record

First conversion in HampshireAdvised on completed conversions for 15 schools7 local authority areasAct for 1 local authority on academy conversionsAdvise 3 large faith based organisationsAdvising 25 schools towards conversion

Academy pros, cons and conversion process

The legal backgroundPros and consUnderstanding the conversion process– Timetables and deadlines– Documentation– Common pitfalls

Academies Act 2010

Academy arrangements with the Secretary of State– An academy agreement– Arrangements for academy financial assistance

Academy agreement– Undertakings– Payment in consideration of undertakings

Undertakings– Establish an independent school with

Specific characteristics orSchool to provide for special educational needs

Pros

IndependenceAutonomyIncome generationGreater freedom – Staff– Curriculum– Organisation

MotivationalPolitical direction

Cons

Diminishing LA supportLoss of bulk purchasingNew responsibilities and duties– Obligations to S of S– Company and charity law

Questionable financial advantageBurden of conversion processBurden of autonomyOppositionCostFreedom of Information and public procurement obligations

Any others…?

The application process

Application for an OrderConsultation with foundation or trust (if applicable) before making applicationConsultation with community and local authorityApplication requires the consent of the trustees of the school and the persons by whom the governors are appointedSecretary of State indicates willingness to make orderDraft documents submitted and approved by the DFE according to strict timetableSecretary of State makes the Order

Documents submitted to DfE

Articles of association of Academy Trust CompanyFunding Agreements(s)Report on titleDraft lease and or Directions for transfer

Land issues

Identifying the land and locating the deedsInvestigating titleSite plan Lease /Directions for TransferReport on titleShared usePublicly funded land

Structure

Single or multi academy?Joining an existing academyConverging with an existing academy schoolIs there a special diocesan or other framework?

The process to completion

Academy Trust Company formedGovernors resolutionsSigning and submission of formal documentationCommercial transfer processRegistrations and other business to set up the new academyFunding agreement signedConversion on a specific dateTransfer of surplus

Understanding the conversion process

On conversion, current governing body is dissolvedCurrent school has to be transferred to a new Academy Trust CompanyAgreements must be made and signed up before conversion point

The commercial transfer

Legal assessmentEngagement with the local authorityEstablishing the new business frameworkCommercial transfer agreementTransfer of existing staff and operationsTransfer of land and buildings

Insurance

Historic insurance for employer’s liabilitiesNew insurances for the academy trust company from the point of conversionMust be set up before the point of conversion

What does not transfer

Anything omitted from the commercial transfer agreementLiabilities (except historic employment liabilities)Deficit – but gets paid back indirectly

Faith schools

Protecting the religious ethos of the school post conversionRegistrationLeadership and GovernanceStructureRecruitment of staff

Becoming an Academy Why and How

• Conversion not Confusion• Overcoming any challenges

September 2011

Strictly Education•

Formed in 2002 – work exclusively in the Education

Sector•

Support over 1000 schools in over 80 Local Authorities

•

Support Academies, Community & VA schools ‐ converting to Academy status and post conversion

•

Part of the Bond International Group, global provider of HR Capital Management Software solutions and services operating in 42 countries

•

Complete range of school support services

Strictly Education•

Completed 70 Conversions up to Sept1st

2011

•

A further 40 schools at different points of the decision making process

•

Work in partnership with Blake Lapthorn•

Unique Academy PortalTM

.....

Taking the Confusion out of Conversion

What Confusion?

The issues fall into 4 key support areas:• Self determination versus employment risk• Financial benefit versus reporting and risk• Premises and Contracts control versus

management responsibility• Legal Process versus independent Legal

advice

HR & Employment Risk

• Stakeholder Consultation• Measures• TUPE & Consultation• Due Diligence• Pensions

Identifying Challenges and the Solutions

HR & Employment Risk

• Audit of Policies• Working with Unions and recognition• Working with Staff• Staff Communication


Finance and Reporting

• Process and Timeframe for reporting• Section 251 review (& LACSEG)• GAG Academy funding• Transfer of Assets and liabilities• Cash flow/Balance Sheet/Budget Setting

Indentifying Challenges and Solutions

Finance, Accounting and Pension

• VAT, registration, managing & reporting• Accounting arrangements & systems• Pensions (LGPS and TP)

– Employee contributions (LGPS)– Employer pension contributions (LGPS)– Deficit & Liability (LGPS)

Identifying Challenges and Solutions

Property Support & Asset Management

• Gap Analysis & Condition Survey• Outstanding disputes, Land Share• New Builds and Children Centres• Risk Assessments• Remedial steps


Contract Leases & Insurances

• Audit of SLAs/contracts (LA/Third Party)• Assessment of service quality• Evaluate options (TUPE/Measures?)• Audit of Insurances• Consideration /Evaluation of alternatives

Indentifying Challenges and the Solutions

Evaluating the Options• Costs vs Benefits of Academy Status

Autonomy - freedom to set remuneration and reward good performanceIndependence - increased funding directly to the Academy, you decide what to spend your money onFlexibility - set your own agenda and CurriculumControl - your premises and destiny

• Importance of getting the governors and staff onboard (and unions)

• Analysis before decision• Tried and tested solutions• Overall Project Management plan

www.strictlyeducation.co.uk/academyUnique Academy PortalTM information in one placeExperience - extensive track recordOne stop shop - all aspects 1 placeBespoke solutions -tailored to you

Work with high profile legal partnersSeamless ongoing post conversion support Simple budgeting – fixed cost unlimited accessClose working relationship with the YPLA & DfE

.

http://www.strictlyeducation.co.uk/academy

www.strictlyeducation.co.uk/academy

http://www.strictlyeducation.co.uk/academy

Questions and Answers

“I found Strictly Education’s Portal very useful and easy to use, it equipped me well and gave me the confidence, support and knowledge I needed to discuss further with my Governing

Body”Graham Wright, Wardle High School

Tel: 07976583959 nickolas.morrissey

@strictlyeducation.co.uk



Academy Directors

The duties, responsibilities and liabilities of an Academy Director

Overview

General background regarding the structure and management of an Academy Trust CompanyThe duties of a director in the context of– company law– charity law

Overview (a few exclusions)

Concentrating on duties of governance in the context of company and charity lawNot specifically addressing other duties under:– Insolvency legislation– Other regulatory frameworks, e.g. Education Acts,

Health & Safety legislation, etc.

Background

Structure and management of an ATC– company limited by guarantee– exempt charity– regulation

Single or Multi-Academy

The members of an ATC

Initial members appointed by existing governors, then additional members by unanimous resolutionExpected to be ‘few in number’Stakeholders designed to provide a layer of accountability, can:– appoint and remove directors– approve changes to the constitution– require calling of general meetings and circulation of

resolutions

The governing body (1)

Broadly same as maintained schools but with more autonomyAbility to delegateNow governors are directors of the ATC for company law purposes and charity trustees for the purposes of charity lawResponsible for day to day running


Board of governors will– ensure the quality of education provision and delivery

of charitable outcomes– challenge and monitor performance of the ATC– manage the ATC’s finances and property– employ staff– manage and comply with obligations of the funding

agreement– comply with (and ensure that the ATC complies with)

charity and company law

Model Articles: prescribed structure

Prescribed governance structure:– up to ‘x’ governors (but not too many!)– optional staff governors (not more than 33%)– 1 LA governor (optional)– minimum 2 elected parent governors– the Principal– up to 3 co-opted governors

PLUS – Sec of State right to appoint

Model Articles: term, resignation and removal

4 year term (other than for principal)Subject to re-election/re-appointment if still eligibleResignation by notice (as long as 3 remain)Removal by appointorMust be over 18Cannot be a current pupil

Model Articles: Disqualification (1)

Incapable of managing or administering own affairsAbsent without permission from all meetings for six monthsSubject of bankruptcy or similar judgmentDirector’s disqualification order or undertakingOther Companies Act 2006 provisionsS.72 Charities Act 1993Removal from office of charity trustee by Charity Commission or High Court


If:– included on list kept by S of S under s.1 of the

Protection of Children Act 1999– disqualified from working with children under s.35

Criminal Justice and Court Services Act 2000– barred from regulated activity relating to children

(s.3(2) Safeguarding Vulnerable Groups Act 2006)– Subject of a direction, prohibition or restriction under

s.142 Education Act 2002– convicted of any criminal offence (exceptions)


After Academy has opened… if: – has not provided to the chairman of the governors a

criminal records certificate at an enhanced disclosure level; or

– if the certificate provided discloses any information which in the opinion of the Chairman or the Principal confirms that person is unsuitable to work with children (can be referred to the Secretary of State)

N.b. All of the above apply to any member of any committee of the governors – even if not a governor

Company law: directors’ duties (1)

Subjects of the general duties– Existing directors– Shadow directors– Former directors – in relation to conflicts/external benefits

Administrative dutiesGeneral dutiesConflicts of interest


Administrative duties– maintain statutory books– file accounts– maintain tax and national insurance records– keep minutes of meetings of directors and members

(for 10 years)– ensure name is correctly displayed at registered office

and on stationery– Companies House filings


Seven general duties:– Act within powers– Promote the success of the company for the

achievement of its stated purposes– Exercise independent judgment– Exercise reasonable care, skill and diligence– Avoid conflicts of interests– Not to accept benefits from third parties– Declare interest in proposed transaction or

arrangement with the company


To promote the success of the company for the achievement

of its stated purposes

Need to foster business relationships with

customers, suppliers and others

Need to actfairly between

membersDesire to maintainreputation for high

standards of business conduct

Impact of operations oncommunity & environment

Likely long term consequences

Interests of employees

Company law: Promoting success?

The meaning of “success”How is this to be determined?Judgment period – short, medium, long – over which success is to be judgedIf factors conflict, which prevails?Not enough to pay “lip service” to the factorsMaking and documenting decisions

Company law: some conclusions

Good faith decisions will not be impugnedBreach of duty is not established by the result but from the process and reasoning behind itOther listed factors must get a look in when considering the need to promote the success of the company for the achievement of its stated purposesCourts will be looking to support the sensible board and will not penalise risk-taking in the correct context

Company law: conflicts of interest

Where are director has an actual or potential conflict of interest or loyaltyHighly likely to arise, especially if the ATC has LA governorsConflict can be authorised by non-conflicted directors under an authority contained in company’s constitution – but note – no such authority in the model articlesTherefore need special resolution of members to empower the non-conflicted directors to authorise the conflictThen a matter for non-conflicted directors to decide. Would not be appropriate for them to authorise a conflict if a conflicted director or a connected person could receive a benefitRecommend that the ATC adopts a suitable conflicts of interest policy and a procedure for the declaration of interests

Charity law: trustees’ responsibilities

To carry out the objects of the companyTo protect and manage the property and assetsTo act in good faith, always in the best interests of the companyTo act prudentlyTo hold and attend directors’ meetingsTo delegate appropriatelyTo keep company’s books and records up to date, to keep accounts and to make all necessary filings with Companies House

Charity law: Finance Act 2010

Entitlement to various tax reliefs and exemptionsNew test to ensure not managed or controlled by individuals who ‘present a risk to the charity’s tax position’Could result in loss of reliefs and exemptions‘Fit and proper persons test’:– Give due consideration as to suitability of directors and

senior personnel– Suggested procedure – guide and declaration

(see HMRC web site)

Liability for failure and insurance

Personal liability will not arise for governors carrying out their duties in good faith:– honestly – prudently– within powers– in accordance with normal standards expected of a

person responsible for a businessDfE’s view that insurance covering governors for personal liability is unlikely to represent good value for money (but model articles permit the taking out of such insurance)

Other requirements

Need employer’s and public liability insurance (suggested minimum cover of £10m for each)Need for enhanced CRB checks for all personnel who could into contact with children, young people and vulnerable groups

Planning for Post Conversion: Regulation in its Various Forms

Stephen [email protected]


Consultation, Regulations and Documenting Procedures

Consultation: Proposed Changes to Performance Management and Capability Arrangements for Teachers

Consultation: 24 May – 16 August 2011Department for Education has not yet responded to the consultationThe current Education (School Teacher Performance Management) (England) Regulations 2006 will be replaced by the Education (School Teachers' Appraisal) Regulations 2011The new Regulations (as yet unpublished) are expected to come into force in 2012These will not apply to academies. Para 15 of the consultation document:

"The current regulations apply to teachers and head teachers employed either by a local authority or by the governing body of a school in England. No change is proposed to the scope of revised regulations. We know that many academies have put in place effective arrangements for managing the performance of their staff despite being outside the scope of the current regulations and we do not propose to change that".

However, when published, academies may consider these as a benchmark against which to review their own arrangements

Consultation included draft 'Guidance and Model Policy for Appraising and Managing Teacher Performance'. Para 19 of the consultation document:

"To show how performance management and capability procedures fit together and to encourage schools to streamline their processes, we propose to replace the current non- statutory guidance and model policy for performance management and the current statutory guidance and model capability procedures with a single non-statutory model policy that covers appraising and managing teacher performance – both performance management and capability procedures.“

The revised and streamlined model policy is optional for all schools and no longer includes the 'informal capability stage'.Publication of the final version of the model policy expected in Autumn 2011Again, academies may consider this as a benchmark against which to review their own policies

Flow Chart for Dismissing Teachers Using New Disciplinary / Capability Procedures

Full, detailed draft guidance and model policy – copy included in packs.

The importance of properly documented and tailored procedures to deal with teachers' misconduct or incompetence

The ‘Recycling' Issue

Para 23 of the consultation document:

"We recognise that poor performance in one school may not mean that a teacher cannot perform effectively in another. That is one of the reasons we have not made provision in the legislation currently before Parliament for employers to refer cases of professional incompetence to a national regulator for barring them from the profession. We also believe head teachers, governing bodies and employers are better placed to tackle competence issues than a national regulator. This does mean it is important that all parties play fair with other schools."

Para 26 of the consultation document:

"We propose that regulations should require employers (and former employers) to provide copies of a teacher’s previous appraisal statements to a potential employer when asked by them to do so in support of an application for a teaching post. We believe this could helpfully supplement the information provided by references and may also have the effect of limiting the extent to which compromise agreements between teachers and employers can subvert the reference process."

Crown Copyright: Flow-chart and quotes from the consultation 'Proposed Changes to Performance Management and Capability Arrangements for Teachers' are Crown copyright-protected material reproduced under the terms of the Open Government Licence from the Department for Education's website. Corporate author: Department for Education.

The Investigation Process in Schools

TransparencyFairness

R (on the application of G) (FC) (Respondent) v. The Governors of X School (Appellant) [2011] UKSC 30

School disciplinary proceedings finding a teaching assistant had instigated an inappropriate relationship with a child, would not substantially influence the ISA's proceedings in relation to his entry on the Children's Barred List. His Article 6 ECHR rights were not engaged at the disciplinary proceedings at which he was not entitled to legal representation.

The General Teaching Council for England

The GTCE shall establish and maintain a register of teachers - section 3 Teaching and Higher Education Act 1988 All teachers with QTS that teach in a maintained school, non-maintained special school or pupil referral unit, must register with the GTCESubject to the specific terms of an academy's funding agreement, a teacher will need to register with either the GTCE or the IfLEducation Bill introduced on 26 January 2011 - GTCE to be abolished 1 April 2012The abolition does not affect the need to register for 2011-12

All registered teachers who are dismissed for either misconduct or incompetence are subject to referral to the GTCEAll registered teachers who resign during a process which could lead to dismissal on the ground of misconduct or incompetence are equally subject to referralIn a GTCE Professional Conduct or Competence Committee hearing, individuals from the school will often be called as witnesses to give evidence

The Teaching Agency 2012Department for Education: “Teaching Agency to be up and running from April 2012”Date: 17 June 2011

The Teaching Agency is a new executive agency that will be responsible for ensuring the supply of high quality teachers and training, and for teacher regulation. It will open in April 2012 and take on some key functions currently carried out by the Training and Development Agency for Schools, General Teaching Council for England, Children’s Workforce Development Council and the Qualifications and Curriculum Development Agency subject to the necessary parliamentary approvals.

The agency will support teachers, instructors, early years’ workers, classroom- based support staff, SENCOs, educational psychologists and examination officers.

Subject to parliamentary approval of related legislation, the Teaching Agency will be responsible for three key areas of delivery supply and retention of the workforcethe quality of the workforceregulation of teacher conduct”.

The Teaching Agency will be operational from April 2012It will take on some key functions currently carried out by the GTCE (among others)The agency will cover teachers and instructors, all early years workers, classroom-based school support staff, special educational needs co-ordinators (SENCOs), educational psychologists and examination officersThe TA's regulatory function will include teachers and instructors in academies. The agency will:(i) consider cases of serious professional teacher misconduct and where

appropriate, bar teachers from teaching (ii) organise and conduct case hearings (iii) administer and manage the list of prohibited teachers The TA regulatory function will not consider issues of lack of competence

The Education Bill and Current Consultation

Education Bill – Proposed New Regulatory Arrangements

Main features of the new regulatory system:

Schools have discretion to decide which cases of serious misconduct to be referred to Secretary of StateNo referrals on ground of incompetenceReferrals can be made by police, Independent Safeguarding Authority, other regulators and publicThe Secretary of State's power to investigate and impose a prohibition (barring) order. The Secretary of State will hold a list of those subject to a prohibition order. The list will be publicly availableNo range of sanctions short of prohibition

Consultation: Proposed Changes to the Teacher Disciplinary and Induction Regulations following the Abolition of the General Teaching Council for England

Consultation: 20 July – 12 October 2011Proposed changes to disciplinary Regulations. New Regulations in force 1 April 2012No requirement to register under the new systemThe new regulatory regime will apply by reference to "teaching work"Regulations will define "teaching work". Steer comes from the Specified Work and Registration (England) (Amendment) Regulations 2003The investigation of misconduct casesTeachers' standardsMembership of professional conduct panels – at least three people, one or more of whom is a serving teacher or those who have taught in past five years and one or more people who have never been teachers.Procedure of professional conduct panelsProhibition Orders and Interim Prohibition OrdersReview of Prohibition Orders

Freedom of Information

The Freedom of Information Act 2000 (FOIA) applies to academies as it does to maintained schoolsPresumption of openness underlies the FOIAThe FOIA came into force immediately for those schools that converted to academies on or after 1 September 2010From 1 January 2011, the FOIA has applied to existing academies, opened before 1 September 2010

Guidance and advice on all FOIA mattersAcademy trusts are responsible for ensuring an academy complies with the FOIASteps that the Academy Trust should take Establishing the FOIA publication scheme and access policy - staff familiarityFreedom of Information OfficersRecords management

Dealing with FOIA requestsTime limit – 20 working daysCosts limits (£450) and chargingExemptionsRefusing a request

Academy Directors

The duties, responsibilities and liabilities of an Academy Director

Overview

General background regarding the structure and management of an Academy Trust CompanyThe duties of a director in the context of– company law– charity law

Overview (a few exclusions)

Concentrating on duties of governance in the context of company and charity lawNot specifically addressing other duties under:– Insolvency legislation– Other regulatory frameworks, e.g. Education Acts,

Health & Safety legislation, etc.

Background

Structure and management of an ATC– company limited by guarantee– exempt charity– regulation

Single or Multi-Academy

The members of an ATC

Initial members appointed by existing governors, then additional members by unanimous resolutionExpected to be ‘few in number’Stakeholders designed to provide a layer of accountability, can:– appoint and remove directors– approve changes to the constitution– require calling of general meetings and circulation of

resolutions


Broadly same as maintained schools but with more autonomyAbility to delegateNow governors are directors of the ATC for company law purposes and charity trustees for the purposes of charity lawResponsible for day to day running


Board of governors will– ensure the quality of education provision and delivery

of charitable outcomes– challenge and monitor performance of the ATC– manage the ATC’s finances and property– employ staff– manage and comply with obligations of the funding

agreement– comply with (and ensure that the ATC complies with)

charity and company law

Model Articles: prescribed structure

Prescribed governance structure:– up to ‘x’ governors (but not too many!)– optional staff governors (not more than 33%)– 1 LA governor (optional)– minimum 2 elected parent governors– the Principal– up to 3 co-opted governors

PLUS – Sec of State right to appoint

Model Articles: term, resignation and removal

4 year term (other than for principal)Subject to re-election/re-appointment if still eligibleResignation by notice (as long as 3 remain)Removal by appointorMust be over 18Cannot be a current pupil


Incapable of managing or administering own affairsAbsent without permission from all meetings for six monthsSubject of bankruptcy or similar judgmentDirector’s disqualification order or undertakingOther Companies Act 2006 provisionsS.72 Charities Act 1993Removal from office of charity trustee by Charity Commission or High Court


If:– included on list kept by S of S under s.1 of the

Protection of Children Act 1999– disqualified from working with children under s.35

Criminal Justice and Court Services Act 2000– barred from regulated activity relating to children

(s.3(2) Safeguarding Vulnerable Groups Act 2006)– Subject of a direction, prohibition or restriction under

s.142 Education Act 2002– convicted of any criminal offence (exceptions)


After Academy has opened… if: – has not provided to the chairman of the governors a

criminal records certificate at an enhanced disclosure level; or

– if the certificate provided discloses any information which in the opinion of the Chairman or the Principal confirms that person is unsuitable to work with children (can be referred to the Secretary of State)

N.b. All of the above apply to any member of any committee of the governors – even if not a governor


Subjects of the general duties– Existing directors– Shadow directors– Former directors – in relation to conflicts/external benefits

Administrative dutiesGeneral dutiesConflicts of interest