Since the budget announcement that Sixth Form Colleges will be permitted to become Academies, there have been a number of articles published about the savings on VAT that will be realised if a Sixth Form College becomes a 16-19 Academy. Whilst the financial savings are of course welcome, there has been little information about the conversion process. Formal guidance is expected from the Department for Education (DfE) by February 2016. Ahead of the guidance being issued, Helen Hirst of Schofield Sweeney draws on her experience of working with Academies to explore some of the practical steps that Sixth Form Colleges can take in preparation for conversion.
Step One – Decide on the structure
What are the options for Sixth Form Colleges in applying for Academy status? Potentially Sixth Form Colleges could apply to become standalone 16-19 Academies. However, it is likely that such an application would be under closer scrutiny than an application to join or establish a Multi Academy Trust (MAT). MATs are the current preferred structure of the DfE, however this type of structure does present some interesting questions for Sixth Form Colleges who have been used to autonomy and independence since incorporation in the 1990s.
A MAT can provide autonomy for the Academies within it by utilising Local Governing Bodies. The Academy Trust board effectively delegates certain decisions to the Local Governing Bodies and potentially also committees. The devil, as ever, is in the detail. It is only by examining the Scheme of Delegation for each Local Governing Body that is possible to ensure that each Academy has appropriate decision making powers including control of the budget and appointment of Principals.
However, the current model DfE Articles of Association refer to the Scheme of Delegation being reviewed every 12 months by the Directors/Trustees of the Academy Trust. This means there is a danger that the powers granted to the Local Governing Body could be changed from those agreed initially. As with entering into any “partnership” arrangement, it is wise to consider the longevity of the partnership and an exit strategy if possible.
Step Two – Get your house in order
As part of the conversion process there will be a transfer of land, assets, contracts and staff. This is dealt with by the land transfer documentation and a commercial or assets transfer agreement.
Taking these two points in turn, the transfer of land can be a complex area and will depend entirely on what current arrangements are in place. The land may be owned by the Sixth Form College, in which case this may transfer across to the Academy Trust. It is important to note that if the college is joining a MAT then the land will be owned by the MAT and not the individual Academy Trust as there will be one legal entity. The extent to which the college would remain in control of the land would be determined through the conversion process.
If a separate trust (or other third party) own the land then there is likely to be a lease granted to the Academy Trust. As with all Academy conversions, the land issues can cause delays so ensuring that any current outstanding land issues are resolved is really important, for example queries around boundaries.
In relation to the commercial or assets transfer agreement it would be a useful exercise to start preparing some of the practical information that will be required. This includes the TUPE details for the transferring staff and a list of current contracts. It could be an opportunity to try terminate some of the existing contracts as part of the process, or simply transfer across all existing suppliers that are willing to do this. It may also be worthwhile considering issues around software licences when joining or forming a MAT. It is unlikely that a list all of the assets will be required but it is worth considering if there are any assets which shouldn’t transfer, for example equipment owned by a third party.
Step Three – Consider the winding up process
As Sixth Form Colleges are incorporated there is a specific process to wind up an incorporated body. This includes advertising the proposal in local and national newspapers. It is important to allow time for consultation as part of the process. In reality this process is likely to run alongside the Academy conversion but of course it is important to get all stakeholders on board with the application.
Top points for Sixth Form to consider:
For further information contact Helen Hirst on 01274 377285.
This article appeared in the TES on 8th January 2016, view here.