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Shaky foundations, by Phil Revell

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04 March 2005

Foundation schools are being talked up as the next big thing in education. But will fast-tracking them mean more parent choice and school autonomy – or a dangerous lack of accountability and strategic control? Phil Revell reports

Last month's white paper on 14–19 education might have dismayed the education community, but this was never going to be the issue that grabbed voters' attention – and ministers knew it. There's political consensus about what will be the main education theme for the coming election: Labour and Conservative politicians are scrambling to offer a greater choice to parents choosing a secondary school for their children.

As in other policy areas, there is a barely discernable channel of blue water between the parties. The Conservatives plan to cut local education authorities out of the loop and fund state schools directly from Whitehall. Education spokesman Tim Collins says that the Conservatives will fund thousands of extra school places to make parental choice a reality.

Labour plans to expand the successful specialist schools programme and create more city academies and 'foundation' schools. Both policies involve allowing individual schools far more autonomy, making head teachers and governing bodies the key decision-makers in local education provision.

'Giving parents an increased choice means we need to see an increase in the range of providers of education,' says Education Secretary Ruth Kelly. 'That is why we need to accelerate the national roll-out of specialist schools, and give them greater freedom – as independent specialist schools – to respond to the needs of parents, pupils and local communities.'

For Labour, greater autonomy will come from foundation status, a form of independence within the state sector that is already enjoyed by around 500 schools, including some of the most successful. The Blairs chose a foundation school for their children – The London Oratory – and Tony Blair says that the move to independent specialist schools such as city academies and foundations 'lies at the heart of the reform of our education system'.

There are plans for a city academy in every town, but the real expansion is in foundation status. The National Association of Head Teachers' general secretary David Hart believes that 'a large number of secondary schools will want to go down this road'.

But critics are horrified by the prospect of billions of pounds worth of assets being taken out of public control. They argue that the policy will reduce choice for parents and create unnecessary difficulties for local authorities trying to implement the Children Act.

'The reality of the new Education Bill is that it removes from local authorities any ability to plan provision within their areas,' says Phil Willis, Liberal Democrat education spokesman. 'Those who believe in setting 25,000 schools free without any controls do not live in the real world.'

Foundation schools are not new – some go back hundreds of years. Many are church schools, others were grant-maintained and chose to 'go foundation' when GM status was abolished in 1998. A few are linked to independent charitable trusts.

A foundation school owns its buildings and employs its staff. It can have a different admissions policies to that of the local authority, but its day-to-day funding is routed through the local authority via a delegated budget in much the same way as any other school. This differs from GM status, where funding came from Whitehall via a central agency.

Schools can already opt for foundation status, but the change is a lengthy affair, involving a great deal of consultation. Labour proposes to fast-track this process, allowing any secondary school to become a foundation on a simple vote of the governing body. In addition, schools will be able to ally themselves with a foundation partner – perhaps a charitable or religious trust, but possibly a business – which would then be able to nominate most of the governing body.

'These proposals will significantly weaken local authority control over schools in their area,' says Alison King, leader of Norfolk County Council and chair of the Local Government Association's children and young people's panel. 'There is no democratic accountability for these schools.'

Part of the LGA concern comes from the GM experience in the 1990s. Schools that went down that route under the Conservatives created multiple problems for their local councils. Prized community assets such as sports halls and swimming pools suddenly became the property of the school. In some cases there was a failure to invest in the facilities that was all too apparent when the school rejoined the community fold several years later.

Few state schools employ professional support staff to manage their buildings or deal with employment issues. In many observers' eyes, that calls into question their capacity to manage the assets they would acquire under foundation status.

During the GM years, school governing bodies frequently found themselves hauled before employment tribunals because they had made elementary errors in personnel procedures, and many existing schools are now facing expensive asbestos removal bills because they did not use the local authority's services while they were outside their control.

'The whole area of ownership and management of assets is very problematic,' says King.

Private Finance Initiative projects could be the focus of disputes between schools and LEAs. If schools that have been part of a PFI build or renovation contract are allowed to become foundation schools, there are questions about who will own the asset and who will be responsible for the debt.

'There's the potential for a school to go foundation, leaving the local authority to pay the debt on assets it no longer has any control over,' says King.

There are other doubts about a school's ability to manage a public asset that could be worth £30m. Critics cite the high-profile examples where dishonest head teachers have pilfered money.

Between 1994 and 1999, St John Rigby College, based in the London Borough of Bromley, lost at least £500,000 as head teacher Colleen McCabe forged signatures and lived a high life financed by the school's corporate credit card. She spent the money on shoes, holidays, cosmetics, restaurants – and a Crystal Palace season ticket. Bromley's Imelda Marcos was sentenced to five years in prison in 2003, after a trial where details of her champagne lifestyle were laid out before the court.

The case is relevant because it highlights the weaknesses in audit and inspection arrangements for schools outside the local authority fold. Between January 1993 and September 1999, St John Rigby College was grant maintained, and it was the freedom of GM status that allowed McCabe to steal without fear of discovery. GM schools were free to buy services where they wished, and St John Rigby's governors chose not to use Bromley council's auditors.

When those auditors went back to the school in 1999, they immediately spotted the gaping holes in the accounts. But concerned parents wanted to know why the thefts had not been spotted earlier. Ofsted inspectors had visited the school in 1996 – 18 months after McCabe began using the school funds as a personal bank account. The inspectors spotted nothing amiss; in fact their report said the college provided 'good value for money.'

An Ofsted spokesman said that inspectors were not auditors and had relied upon the accounts and the auditors' report. But Ofsted routinely reports on how a school manages its assets and on whether a school offers value for money. To many local authority observers, the McCabe case demonstrated the dubious nature of those judgements.

But it is the removal of strategic control that most worries the critics. Despite heavy lobbying from children's charities and local authority representatives, last year's Children Act contained no legal requirement for schools to co-operate with other children's services. Yet the government's draft statutory guidance says that 'schools are central to the drive to improve outcomes for children and young people'.

The LGA would like to know how local authorities are supposed to advance the children's agenda if they have no power over the organisations that are supposed to be central to its delivery.

'The government is expecting us to work on the children's agenda with one hand tied behind our backs,' says King.

And there's more. Ministers say that foundation schools will offer more choice for parents but the Advisory Centre for Education, a charity that runs a parents' helpline, begs to differ.

'Many parents are already confused by the different categories of schools and they are often shocked by how little jurisdiction LEAs have over many of these schools,' says Ace spokeswoman Liz Williams.

The charity's main concerns centre on school admissions. City academies and foundation schools will be able to set their own admissions policies, and Ace is worried these could disadvantage less able children in the drive to accept higher achievers. They fear there will be greater opportunities to manipulate the system in ways that exclude certain social and ethnic groups.

'We hear this from parents on our advice lines,' says Williams. 'A school's narrow interest – such as improving its position in the league tables – already conflicts with the interests of the whole community. There need to be legally enforceable LEA-wide systems that back parents' preferred placements.'

The potential for problems over admissions to foundation schools was highlighted in a report by the local government ombudsman, who, in 2001/02, found that foundations attracted twice as many complaints about admissions arrangements as local authorities.

'We find too many examples of practice that is poor, sometimes spectacularly so,' said the report.

Head teachers reject the critics' arguments. They point out that the high-profile theft and fraud cases represent a handful of schools and that hundreds of foundation schools already exist without apparent difficulties.

NAHT general secretary David Hart would like to open up the policy still further. 'I've been urging the Department for Education and Skills to allow primary schools to go down the fast-track route as well,' he says. 'If it's appropriate to fast-track a secondary school to foundation status, there should be no discrimination against primary schools.'

But the critics are not convinced. Ace's Liz Williams points out that there is no requirement in the current proposals to consult with parents, and that a governing body could vote in August – during the school holidays – with foundation status a fait accompli by the start of the autumn term.

'We see little choice for parents in these proposals,' she says. 'Quite the reverse – we are concerned that the existence of more foundation schools will lead to a two-tier system.'

PFmar2005

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