Councils could face £320m bill for full academy conversion

26 Sep 16

Local councils could be landed with a bill of up to £320m if all schools are converted into academies, according to Local Government Association figures.

The figures, published on Saturday, reveal the potential cost to council taxpayers of the total conversion to academy schools, and suggest an additional loss of £80m annually in business rates income, since academies receive an 80% relief in business rates.

The data was gathered by the LGA through an online survey of finance directors of upper tier local authorities in England, and should, it said, be treated as “a snapshot” of the costs of this group, rather than representative of the costs experienced by all authorities.

The government has stressed that its ambition is for all schools to covert to academy status, although it has been less clear about the means by which this will be achieved.

A recent review by Reform called into question the evidence of whether academies and academy chains – groups of two or more academies backed by the same sponsor – had indeed proved transformational, improving standards and outcomes for children.

The LGA observed that government has in recent weeks indicated that multi-academy trusts are its preferred model. This is when a group of schools are governed through a single set of members and directors. Council data from the survey suggests that this conversion method could result in councils picking up a bill of £320m.

However, if schools follow a different route to academy status, whereby they operate as a standalone organisation, the cost to councils would be more like £120m.

In the case of a school converting via the multi-academy trust model, any debt accumulated by that school would normally remain with the council. In the second method, this is not necessarily the case. The LGA highlighted that either method could result in councils paying significant sums, in particular for legal services.

Commenting on the figures, Richard Watts, chair of the LGA’s children and young people board, cited recent evidence from Ofsted that suggested forcing a school to become an academy doesn’t necessarily lead to improved exam results. 

He said LGA analysis showed that 81% of council-maintained schools are rated as ‘good’ or ‘outstanding’, compared with 73% of academies and 79% of free schools.

Watts also noted that the government has offered academy chains £600m to help them convert more maintained schools. But councils have seen the same amount cut from the Education Services Grant.

Other commentators echoed the sentiment that the cost of converting schools to academies would be better spent improving existing schools.

Mary Bousted, general secretary of the Association of Teachers and Lecturers, said: “This money would be better spent by councils on improving existing local authority schools or maintaining the school support services that help children with special needs and families in difficulties.”

Kevin Courtney, general secretary of the National Union of Teachers, said the £320m figure should be “wake-up call”, for those advocating structural school reform for the sake of it.

“The academies programme is becoming an albatross around the government’s neck,” he said. “It was never properly thought through and now it is clear that it is an unsustainable financial drain on scarce resources.”

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