Academy Conversion – legal aspects

Anthony Collins Solicitors

Conversion Process

• Schools register interest with DfE • Application to Convert by schools & consultation. DfE Approval and Academy Order • Consult – staff and other stakeholders • Achieve Funding Agreement • Pre-opening work

Legal Process

• Establish Academy Trust (single or multiple academy) • Finalise Funding Agreement (single or multiple academy) • Land transfer (freehold/leasehold) • Staff & Assets transfer • Who manages the process and communication?

Academy Trust

• M&As – governing document • Powers to act & run school • Governors as Members • Role of Directors/Trustees/Governors • Composition of new Governing Body & Local Authority association issue

Governors Role

Current governor responsibilities arise from broad duties: • Setting the strategic direction for the school • Reviewing progress against budget, plans and policies • Approving the school budget • Providing support and challenge to the Headteacher – “critical friend” • Appointing the Headteacher

Academy Governors

• Also company directors and charity trustees • Duties under Company and Charity legislation • Separation of Company –v- directors same as Governing Body governor –v- governors • Not too onerous or different to being a – act in good faith and in best interests of school. Remember to take professional advice when necessary!

Directors’ Duties

• Companies House Admin – annual return, annual accounts, keep Companies House updated on changes of detail. Delegate?

• Act to promote success of business • Act within the rules – internally through the constitution of company and externally through meeting all legal requirements.

• Be Honest • Be diligent, careful and well informed re affairs of the company • Keep good records of decision making • Avoid conflicts of interest • Seek external advice when necessary

Charity Trustee Duties

• Ensure Compliance – charity law, constitution and other legal requirements; act with integrity and avoid conflicts and misuse of funds/assets • Duty of Prudence – keep charity solvent and keep upto date with charity situation; use funds and property wisely and solely for charity’s purposes; avoid undue risk especially around borrowing or investing • Duty of Care – use reasonable care and skill to keep charity well run, take professional advice

Funding Agreement

• Purpose – regulation of Academy and provision of funding from DfE • Covers funding available to academy trust and what is expected of it – admissions, exclusions, SEN plus operational issues re staffing, curriculum, termination, access to information • Sources of funding – capital, GAG and EAG

Land

• Nature of transfer depends on school category • Title reports and searches usually required and DfE interest in seeing reports • What are the academy getting – agree plans and extent of site • 125 year lease from Council to Academy Trust

Staff & Assets

• Staff transfer under TUPE – requires current employer consultation & no detriment on transfer terms • Pensions continue – financial impact on Academy Trust • Assets – transfer under “commercial transfer agreement”. Need to know what is transferring including contracts – audit?

Questions???

Richard Freeth Associate Anthony Collins Solicitors [email protected]

0121 214 3710