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Understanding re brokerage - October 2017

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In this webinar, Hayley and Katie explored re-brokerage arrangements including the Regional School Commissioners’ legal powers and the circumstances in which an academy may be at risk of being re-brokered, as well as the potential consequences of refusing to consent to such an arrangement. They also look at this topic from the perspective of a trust being asked to accept a re-brokered academy and give an overview of the legal process that this entails.

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Understanding re brokerage - October 2017

  1. 1. Understanding re-brokerage for academies – October 2017
  2. 2. Understanding re-brokerage for academies – October 2017 “At no time have I ever worked with a company offering both HR and legal advice that have been so professional, effective and efficient” James Howarth, The Hathaway Academy Connect with Hayley hayley.o’sullivan@brownejacobson.com +44 (0)121 237 3994 Connect with Katie katie.michelon@brownejacobson.com +44 (0)115 976 6189
  3. 3. @BJEducationLaw have your say for news, legal updates, real opinions and training: https://www.linkedin.com/company /education-advisory-&-hr-services Follow our showcase page…
  4. 4. What we will cover • re-brokerage - background and context • RSCs and their powers of intervention • when an academy may be at risk of being re- brokered • consequences of refusal • taking on a re-brokered academy and the legal process • funding and questions
  5. 5. @BJEducationLaw have your say Background and context What is a re-brokerage? The term the DfE use where one academy trust is asked by the Regional Schools Commissioner (RSC) to transfer one, some or all of its academies to another academy trust.
  6. 6. @BJEducationLaw have your say Background and context When is re-brokerage usually considered? Usually as a result of concerns about performance at one or more of the trust’s academies. Voluntary moves usually referred to as transfers.
  7. 7. “As at 4 January 2017 there were 41 academies in the process of being re-brokered. Of these, 31 are as a result of intervention action on the part of the Regional School Commissioner (RSC). The rest involve instances such as a single academy trust seeking to join or set up a multi academy trust; or a sponsor deciding to hand back an academy because it no longer has the capacity to run it or wants to wind down the trust.” Department for Education (MAT 64) para 2
  8. 8. “Where MATs are on track to deal with underperformance they should be supported to do so. The default approach to tackling chronic underperformance will continue to be to broker the school into an alternative MAT, where school leaders with a track record of success can apply proven models to improve performance.” Department for Education (MAT 20) para 25
  9. 9. More than 100 schools are now re-brokered every year and this number is expected to rise as the number of academies increases. “booming academy transfer market” DfE figures, Feb 2017
  10. 10. RSCs and their powers of intervention • civil servants, responsible to the SoS • core functions and powers set out in: RSC Decision Making Framework December 2016 • individual academy funding agreements • Education and Adoption Act 2016 • Schools Causing Concern guidance
  11. 11. Tackling educational underperformance in academies and free schools The RSC is responsible for holding academy trusts to account where academies or free schools are underperforming. In cases where formal intervention measures are required, RSCs will take action to address underperformance and bring about rapid improvement. This may include commissioning appropriate support, issuing a pre-warning notice or warning notice or by terminating the academy’s funding agreement, and identifying a new sponsor to take on responsibility for the academy where this is necessary. RSC decision-making framework
  12. 12. Funding agreements & the EAA 2016 • funding agreement - primary source of the trust’s contractual rights and obligations • importance of this contractual underpinning made clear by the Education and Adoption Act 2016 (EAA 2016)
  13. 13. Funding agreements & the EAA 2016 • EAA 2016 amends the Academies Act 2010 to provide that old funding agreements are to be treated as if they include the new termination powers present included within the new model funding agreements • how certain as an academy trust can you be of your contractual terms with the SoS if they can be amended by legislation?
  14. 14. Academies at risk of being re-brokered In summary, academies are eligible for intervention where they 1. have been judged inadequate by Ofsted 2. are ‘Coasting’ 3. have failed to comply with a Termination Warning Notice (TWN)
  15. 15. 1. Judged inadequate • at greatest risk of being presented with a proposed re-brokerage • RSC has power to terminate the funding agreement • consequences for stand-alone inadequate academies? • consequences for academies within a MAT?
  16. 16. 2. Meet the definition of ‘coasting’ • Coasting Schools (England) Regulations 2017 • greater scope to avoid being the subject of a proposed re-brokerage • need robust plan and the necessary capacity to bring about improvement within a certain timescale • insufficient capacity in the system to force all coasting schools to convert to academies or re-broker all coasting academies to new sponsors
  17. 17. “As a result of the Education and Adoption Act 2016, regardless of the prior terms in that academy’s funding agreement, where an academy has met the coasting definition, and the RSC on behalf of the Secretary of State has notified the academy that it has fallen within the coasting definition, then the Secretary of State is ultimately able to terminate the funding agreement for that academy and move the academy to a new trust. Before terminating the funding agreement on the grounds that the academy is coasting, the RSC must first give the academy proprietor a termination warning notice.” Schools causing concern guidance
  18. 18. “Where an RSC has considered it necessary to terminate an academy’s funding agreement as a result of the academy having been coasting, that does not necessarily mean that the academy must close. Usually the RSC will identify a new sponsor to take on responsibility for the academy and will enter into a new funding agreement in respect of that academy (this is sometimes referred to as ‘rebrokerage’ of the academy). Where the academy that was coasting was previously a ‘standalone’ academy, this will require it to join a multi-academy trust (MAT). The academy will remain open, and the RSC and the new sponsor will work to ensure minimal disruption to pupils’ education during the transition.” Schools causing concern guidance
  19. 19. @BJEducationLaw have your say 3. Have failed to comply with a TWN • Termination Warning Notice issued to trusts under the terms of their funding agreement often as a result of concerns over breaches of the funding agreement, educational performance, finances, governance and/or safeguarding
  20. 20. @BJEducationLaw have your say 3. Have failed to comply with a TWN • can be issued to coasting academies • will specify the action the trust must take and by when • failure to respond or comply – trust may be served with a Termination Notice • Financial Notice to Improve (FNtI)
  21. 21. Joining a particular trust • trust/academy has the opportunity to make representations • may be able to influence the RSC on who becomes the academy’s new sponsor • the worse the circumstances of the academy in question, the more likely a sponsor will be chosen by the RSC
  22. 22. Joining a particular trust • if an academy wants a say in what happens/where it goes, it is best to engage with the RSC at an early stage to put plans in place to secure improvement. This may lead to the trust having a say in who the sponsoring trust will be or could even avoid a re-brokerage in its entirety
  23. 23. @BJEducationLaw have your say Refusing a re-brokerage request • no direct legal power for RSCs to force a trust to agree to transfer an academy to another trust • threat of terminating a funding agreement has been highly effective in obtaining consent to a proposed re- brokerage arrangement
  24. 24. @BJEducationLaw have your say Refusing a re-brokerage request • if refuse, the RSC has to power to issue a termination notice and terminate the academy’s funding agreement • practical implications of refusal? • Judicial Review
  25. 25. @BJEducationLaw have your say Taking on a re-brokered academy • RSCs have no power to force a trust to agree • a decision for the trustees of the proposed recipient trust • does the proposed re-brokerage fit in with the trust’s aims, objectives and strategic plan?
  26. 26. Taking on a re-brokered academy? • does the trust have the capacity to secure rapid improvement at the academy? • what are the risks identified by due diligence and how will they be managed and monitored? • how does the re-brokerage affect the current finances and short, medium and long-term budget forecasts?
  27. 27. The legal process 1. consultation 2. due diligence 3. governance 4. deed of novation/variation/termination and funding agreements 5. transfer agreement 6. land transfer 7. TUPE and pensions 8. novations of any building contracts
  28. 28. @BJEducationLaw have your say Funding • little of no funding for re-brokerage so more attractive for MATs to take on maintained schools
  29. 29. @BJEducationLaw have your say “We are concerned by the growth of ‘untouchable’ schools and the length of time it is taking for some schools to be re- brokered. The Government should give greater support for schools which are deemed unattractive to sponsors and play a more active role in re-brokering through RSCs.” House of Commons Education Committee on MATs, Seventh Report of Session 2016–17 . Funding
  30. 30. Considerations for re-brokerage • timing of re-brokerage is critical - beginning or end of an academic and financial year • impact on the culture within the organisation due to lack of information can be difficult at the school level for individual teachers, principals and parents
  31. 31. @BJEducationLaw have your say Considerations for re-brokerage • sensible timing of when and how information is shared and how that process happens • shouldn’t necessarily be a swift transfer – importance of DD
  32. 32. Get in touch “At no time have I ever worked with a company offering both HR and legal advice that have been so professional, effective and efficient” James Howarth, The Hathaway Academy Connect with Hayley hayley.o’sullivan@brownejacobson.com +44 (0)121 237 3994 Connect with Katie katie.michelon@brownejacobson.com +44 (0)115 976 6189

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