Academies Conversion

24th June 2011 by Barry Gostling

The Academies Bill 2010 significantly changed the framework for academy schools in England enabling more schools to convert to academies.

Academies receive their funding directly from the Young People’s Learning Agency (YPLA) rather than via the local authority. Although an academy receives the same level of per-pupil funding as it would have received from the local authority, it also receives the ‘top-slice’ funding which was previously retained by the local authority to cover the cost of centrally provided services. The direct receipt of funding gives the academy greater autonomy on how it spends its income.

The process of conversion is rapidly becoming a well trodden path as a significant number of schools move over to academy status for the start of the 2011/12 academic year. In converting to academy status schools need to address a number of issues including:-

• The transfer of land and buildings from the local authority;
• The transfer of staff under the transfer of undertaking (TUPE) provisions;
• The design and implementation of formal policies covering areas previously dealt with by the Local Authority such as exclusions and detailed curriculum matters; and
• What their future income and expenditure profile will look like. Included within this should be consideration of the VAT status of the new academy and its various income sources as well as considering whether a trading subsidiary company is required.

Whilst the process of conversion is becoming almost routine, no two schools are alike and each will need to consider its own specific circumstances. Governors should consider using experts to assist them with the legal, tax and governance issues arising. There is currently a specific grant available to assist with funding these costs.

Having successfully converted, governors will need to ensure that they have suitable procedures in place to meet the requirements of the Financial Handbook for Academies. This includes the need to appoint an external auditor and to establish and maintain proper accounting records capable of producing annual accounts that comply with the requirements of their funding agreement.

Ensors has developed a specific package of services for new academies which include a number of free of charge services in the first year aimed at assisting schools with the conversion process.


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Barry Gostling

Barry Gostling

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