A Briefing as part of the wider Consultative Process

Conversion to Academy Status

Welwyn St Mary’s Church of England(Voluntary Aided) Primary School

Governing Body Resolution (30th January 2012)

The Governing Body of Welwyn St Mary's CofE (VA) Primary School, after detailed research and

consideration, believes that it would be in the best interests of the School to convert to Academy status. The Governing Body therefore intend to apply to the

Secretary of State to become and Academy and now to commence wider consultation. We shall also seek the authority and views of the Diocese of St Albans and of

other key stakeholders.

(Approved by a majority of 10 to 4)

The Next Step

Having passed the resolution in favour of conversion and registering our position with the Secretary of State for Education, the Governing Body are now required by law to engage in wider consultation of stakeholders

We intend to consult with teaching and non-teaching staff, parents, Welwyn St Mary’s Parochial Church Council, Welwyn Parish Council, other local primary and nursery schools. We will also be taking special note of our own pupils and explaining the matter to them

The consultative process has started and is expected to run through to the Summer Term

After the consultative process we will decide upon whether to proceed and then seek the authority of the Diocese of St Albans.

Financial Aspects and Issues

A school that becomes an academy will receive a grant (the General Annual Grant). The largest part of the grant is the school’s core funding, known as it’s delegated budget share. This will be the same as budget share receive from LA.

In addition an academy will receive a grant to cover services no longer provided/provided free by a Local Authority. This is the LACSEG (the Local Authority Central Spend Equivalent Grant).

Academy funding years run from September to August (school year) and not the fiscal year (April to March)

The Government states that becoming an academy should not bring about a financial advantage or disadvantage to a school. However, academies have greater freedom over how they use their budgets, alongside the other freedoms that they enjoy

Funding Principles

• Each school applying to become an academy will receive £25,000 towards the cost of conversion

• If a school decides not to convert then the £25,000 does not have to be repaid (but should the school want to convert at a later date there will not be any further help towards conversion costs)

One-off Costs

For 2011/12 SEN income for Welwyn St Mary’s is £71k. If a school converts to academy SEN payments will be paid as follows: Paid by Herts CC Paid by D of E grant

•Named statemented income

•Exceptional needs support

Non specific SEN

There are 2 main components which are calculated on Free School Meal data and attainment data. We do not receive specific income for named children and had no claims for exceptional needs support in the last year. We are assuming that this income will be part of the grant from the YPLA

SEN Income

If a school converts to an academy then it will receive a lump sum (LACSEG) annually to pay for services that would have been provided by the Local Authority.

Herts CC already recharges for a large number of it’s services (this is part of the reason why the LACSEG in Herts itself is quite low and is much higher in other LAs where more funding is retained centrally).

Many of the line items marked for academy payment are already recharged to WSM and are already included in our budget.

Services from the LA

The main financial difference to the income of a school converting to an academy is the distribution of the LACSEG (Local Authority Central Spend Equivalent Grant)

This sum is calculated on pupil numbers at a rate of £221 for Herts + £71 per SEN. With a headcount of 411 this generates a LACSEG of £95,713.

This sum of £95,713 is designed to cover services no longer provided/provided free by a Local Authority.

This calculation is for 2011/12 only and grants for 2012/13 are subject to change

Financial Impact of Converting

Financial Impact of Converting

Additional cost areas:

Annual Audit (as per Limited Company)

Accountancy

Non-teaching staff pension deficit

Software licences ?

Other non-LA funded items ?

Schools are not currently VAT registered but can reclaim VAT on purchases through the Local Authority. Welwyn St Mary’s reclaimed £9,870 VAT in 2010/11 and £7,697 in 2009/10

Academies have had difficulty reclaiming as they are de-coupled from the Local Authority - existing academies have received a temporary VAT grant from April-Sept 2011

New scheme in place from Sept 2011 so that academies can reclaim VAT directly from HMRC (easiest way to do this is to become VAT registered) The VAT issue relates to the process and mechanism of VAT reclaim.

The nature of items that can be reclaimed does not change with academy status

VAT

• As we are a large primary school we will receive a LACSEG that should cover any of the increased costs of becoming an academy

• Any gains we could make would be relatively small – these are not a driver for academy conversion

• No certainty until we go through formal application route

Government is committed to major overhaul of school funding in 2012/13 so much will change

Can we afford to become an academy and is there any financial risk ?

Governance Aspects and Issues

An Academy is most easily thought of as a company, set up with Memorandum and Articles of Association

(using a template from the DfE)

Each academy is governed by an Academy Trust, constituted as a company limited by guarantee and set up as a charity although it will be an exempt charity and not required to be registered with and/or regulated by the Charity Commission.

The Academy Trust will be owned by its members and be governed by its governors who wear two hats as directors of the company incorporated at Companies House and Trustees of the Charity. The Governors will form the governing body of the Academy Trust.

Academy statusThe shape of governance

• The Articles do not specify how many Governors from a school’s governing body shall become Members and/or Governors. This is for the school to decide

• The Articles requires that the Academy Trust be incorporated with at least three Members

• The Chair of the Governing Body is also a Member• The Members may appoint any number of Governors • The Governors may appoint academy employees as Governors

but academy employees may not exceed more than one third of the total number of Governors

• There must be at least two parent Governors• The local authority may appoint a Governor• The Head Teacher of the academy will be an ex-officio Governor

Academy statusThe shape of governance

Governing BodyExisting Governing Body normally appoints members to the Academy Trust – a Company Limited by Guarantee – which is then responsible for running the Academy

Academy Trust subsequently appoints members of the Governing Body, the responsibilities of which is largely unchanged

If desired, the composition of the governing body can remain basically as it is.

Staff Aspects and Issues

Teachers and Staff

If we decide to progress further we will need to begin the TUPE (Transfer of Undertakings and Protection of Employment) process as soon as possible

We will require specialist legal advice to guide us through this process

Teachers and StaffTeachers and staff transfer to the Academy under existing terms and conditions and pay

We cannot alter pay or conditions of employment for existing staff for a period of 12 months

If we wish to amend conditions after this period we will need to indicate this as part of the TUPE process

We can, however, determine the pay and conditions for new staff, if we wish

Teachers and Staff

There is no change to Teachers’ Pensions – they remain members of the Teachers’ Pension Scheme (TPS) and employer contributions are unchanged

If staff move on to another school, currently all of their continuous service will be preserved.

Support Staff PensionsSupport Staff are currently members of the Local Government Pension Scheme (LGPS)

LGPS is currently in deficit

The Academy would assume responsibility for the portion of the deficit attributable to its staff

The deficit would appear in the Academy’s annual accounts as a liability

Support Staff PensionsWe cannot determine the amount of the deficit that would pass to us or the impact of this on our employer contributions until an Actuarial Valuation has been undertaken

It is assumed that our current employer contributions would increase

The cost of the Actuarial Valuation is passed to the Academy – circa £3,000

HR FunctionThe Academy will require an HR function from day one

It is uneconomic to recruit an HR Manager and unrealistic to re-train existing staff

We will need to buy-in the function either from County or from outside third party – cost as existing charge to the school

In addition, Occupational Health advice and support will need to be bought in separately on a case by case basis

Day-to-Day Operational Aspects and Issues

Hertfordshire has already shared the following with us: they expect all Hertfordshire schools to be academies by

2015 there will be reductions in their management capacity of

schools The frontline service delivery will charged directly to

schools as a phased programme from 2011–2013. Area Partnerships will take on the distribution of services

rather than LA departments Inevitably the LA will progressively withdraw from

providing some services

Local Authority position

Because we are an ‘outstanding’ school Because we wish to not only maintain our

outstanding provision but to continually enhance this in a time of fundamental system change

Because we wish to continue to secure the very best for our children, our community, our future

Because we have a duty to ensure we have explored the potential that exists under such a conversion, to protect what we already offer

Why are we here?

to develop our curriculum to meet the needs of our children; utilising staff strengths and to continue to develop cohesion in, and amongst, our community

to develop an admissions procedure that is quick and efficient avoiding county burdensome and time consuming bureaucracy

to spend our full allocated monies in the best way that suits the needs of our schools

to recruit the best staff and offer competitive salaries

to act independently, and without the constraints of local and national political interference

What “Freedoms” will we get ?

we will become independent of the Local Authority, and become a Limited Company

we will become self-governing we may need to ultimately outsource our current

LA services to ‘best value’ experts with freedom comes greater responsibility but

more choice we will be accountable to OFSTED, the Board of

Trustees, the Charity Commission for England and Wales and the Young People’s Learning Agency

Considerations

An Academy has the freedom to act in the

best interests of its existing pupils and those to come

Overall

Almost everything that we currently offer and do will remain unchanged

But we can and will do more using our academy status!

In Summary

The View from the Local Authority

Hertfordshire’s position

Will support any school wishing to convert

Will make available any services we can for academies

Will seek to encourage all schools in Hertfordshire to work in partnership for the benefit of local young people.

The View from the Diocesan Board of Education

Diocese neutral on church schools becoming Academies.

Larger primary schools of 300-plus children should feel confident to go forward, while smaller schools might choose to be part of an Umbrella Trust.  

Diocese appoints some Trust Members, being the Chair of Governors, a Board of Education nominee (Vice-Chair of the DBE), a Board of Finance nominee (Archdeacon) and the Incumbent.

The normal rights and privileges of Church Schools are maintained, though change is not precluded.

Buildings and land are leased to the Academy. 

Diocese will seek answers to two main questions:

Will the school maintain strong links with the Parish and the Diocese?

Is the school big enough for Academy status to work?

Insofar as WSM is concerned, the answer to both is "yes".

 

Experienced legal support is essential - a local solicitor is not the recommended route to manage the extensive paperwork of becoming an Academy. The £25K conversion grant was to cover such expenses.

Contribution fromDiscimus Associates

Discimus are an independent consultancy who advise schools and project manage their conversion. The founder is also a member of

St Alban’s DBE

No specific financial advantages to converting although the ability to access and control the "top slice" might give improved financial capacity.

Capital financing of all schools including Academies was undecided at present.

Key HR issues are pay and terms and conditions

No real pitfalls to conversion and no specific advantage from charity status (that was merely a mechanism to arrange things).

We would need to appoint auditors that would increase costs by £7-8K per year and it may be necessary to employ a qualified accountant, to establish the system, but not necessarily full-time.

 

Of the 30 schools they have helped to convert, there had been no problems with any stakeholder group and no negative outcomes.

No school had considered the Pension deficit to be a serious issue.

We could certainly form a “Chain” with other (local) primary schools - Schools become individual Academies, with their own governing bodies, but could join together in Chains that worked together. They had autonomy, with no overarching management, intending to secure economic security and stability. How they would work was up to them e.g. they could share staff. One school could become an Academy and other smaller ones join in later in a chain if they wished; stating on application they were joining a chain might assist smaller schools become Academies. In the end the schools must be willing to co-operate for the benefit of the children, not feel forced into

Other Aspects and Comments

There are no strong drivers from either the financial or the governance area as to why we should convert, because as a VA school we already enjoy many of the freedoms and Herts is a LA that retains a minimal amount of money.

Equally, there are no major obstacles to conversion or disadvantages in so-doing.

Grant and LACSEG should ensure we are not financially disadvantaged and reduction in bureaucracy should outweigh additional work

The major outstanding issue is can we afford NOT to convert ?

The government will adjust the slope of the pitch until it achieves its declared strategy;

why should we wait until circumstances are harder and we are forced to move ?

if we move now we can consolidate, plan from a stable position and move forward.

The situation with staff is an understandable one; the uncertainty is an aspect that governors do appreciate.

There is no intention to alter any terms or conditions in the foreseeable future.

There is no intention to employ unqualified teaching staff.

As part of the TUPE process downstream, governors will be talking with union representatives.

Conclusion

The majority of governors feel that conversion is the best route for the school to follow and is in the best interests of the pupils

The major reasons are: there are no tangible disadvantages the uncertainties are no different from what we will

face anyway Moving now will enable us to move forward from a

position of stability and certainty Other local primary schools are very interested in

forming a chain with us

Where Next – and When ?

We will complete proper and meaningful consultation

Consultation with all groups to be included will take until early May to ensure everyone has adequate time to consider the question

Then we will approach Diocese and Dept for Education with the results of consultation in the Autumn

We can achieve all of the financial, legal and HR requirements during the period November 2012 - March 2013

Our intention is to convert to Academy status for Easter Term 2013

Welwyn St Mary’s Church of England (Voluntary Aided) Primary School15 London Road, Welwyn, Herts AL6 9DP

www.welwynst-marys.herts.sch.uk