The Academies Bill 2010, which was announced in the Queen’s speech on 25 May 2010 will put into law the new government’s promise to enable more schools to achieve academy status and to give them more freedoms and flexibility.

This article, the first of two, will look at what the Bill contains, how to apply to convert to a new academy, and issues to consider when deciding whether or not to apply.

The second article, in the September issue of Education Law Update, will look further at practical guidance that has been published to assist schools in converting to academies, and link this with other coalition government education initiatives.

What is an academy?

Academies are all-ability
state-funded independent schools. They have sponsors from a wide range of backgrounds, including universities and colleges, educational trusts, charities, the business sector and faith communities.

Academies, the first of which opened in 2002, have replaced city technology colleges (CTCs) and city colleges for the technology of the arts (CCTAs), with all but three having converted to academies. There are 203 of them in 83 local authorities.

Of these, six converted from independent schools, 53 have a faith designation and 23 are all-through academies, which include primary provision.

Most academies replaced weak or underperforming schools, and others were new schools in areas that needed extra school places. Each has a funding agreement with the DfE (the department for education — formerly the DCSF), which controls the way they operate, but with a much ‘lighter touch’ than local authorities have over their maintained schools.

Who is applying to become a ‘new academy’?

On 2 June 2010 Michael Gove told the House of Commons that 1,114 schools had responded to his letter inviting applications for new academy status. Among these were 626 schools rated as outstanding, which will be fast-tracked to have academy status, possibly by this autumn.

Gove also said that half of all top-rated secondary schools in England had applied to become academies — 299 out of 600. A further 327 ‘outstanding’ schools had applied to become academies — 273 primaries and 52 special schools out of 2,000 outstanding primaries and 300 outstanding special schools respectively.

What is different about the new academies?

Schools will need the support of their governing body and, where applicable, their foundation to apply, as at present. But unlike existing academies, no external sponsor is required where an outstanding school converts to academy status.

They will not need to consult with the local authority before converting either. Schools will be expected to sign up in principle to support another school to raise attainment.

There are also plans for further freedoms for academies in the way they engage in local partnerships and deliver 14-19 education, details of which are to come.

The current tranche consists of all schools that have been rated as outstanding by Ofsted, as opposed to replacing failing schools.

Outstanding special schools can register their interest to become academies, but they are not included in the present fast-track procedure.

Main elements of the Bill

The Government says that the Bill (subject to royal assent) will:

  • provide schools with the freedoms to deliver an excellent education in the way they see fit, within a broad framework where they are clearly accountable for the outcomes 
  • enable all maintained schools to apply to become academies, with schools judged outstanding by Ofsted being pre-approved
  • allow maintained secondary, primary and special schools to apply to become academies in their own right, without needing external sponsors
  • enable the secretary of state to issue an academy order requiring the local authority to cease to maintain a school
  • remove the requirement to consult the local authority before opening an academy, thus simplifying and accelerating the process
  • require the consent of a school’s governing body and any existing (mainly church) foundations before a school applies to become an academy
  • deem academy trusts to be exempt charities
  • ensure there is no change of religious character in the conversion process (such changes can be made through separate existing provisions)
  • not allow expansion of selection, but grammar and other schools that select or partially select pupils will be able to continue to do so
  • retain the existing legal requirement for funding agreements to last at least seven years (the agreement
  • can still provide for intervention or termination, if the academy fails)
  • fund academies at a comparable level to maintained schools
  • apply to England (and Wales, subject to Welsh ministers’ approval)

Steps that ‘outstanding’ schools can take now

The Bill allows ‘outstanding’ schools to take certain steps with a view to converting to an academy before the Bill comes into force (to have effect as if taken under the Bill). Schools can take the following steps immediately:

  • download and fill out the online registration form
  • convene a meeting of your governing body to discuss and agree the intention to convert
  • for a school with a religious character, convene a meeting of your local diocese or other religious authority, or for a foundation or trust school of foundation or trust members, for their approval
  • notify your local authority of your intention to become an academy
  • ask the local authority to gather land ownership and registration documentation and information
  • begin compiling lists of contracts, service-level agreements and licences held that will need to be transferred
  • consider how you might wish to inform staff, pupils and parents of the intended conversion

How does the new conversion process work?

For ‘outstanding’ schools wanting to become academies, conversion should take about three months. The schedule is tight, and may be viewed as aspirational. It will not be necessary to follow these steps in sequence, because if schools wish to reopen as academies in September 2010, they may need to undertake some steps in parallel, to ensure that the necessary work is complete before opening. Schools can choose when they would like to open — for most this will be at the beginning of the autumn or spring term.


  • an online registration form will have to be completed
  • the DfE will contact the school directly with further guidance and documentation (the contact person will be the school’s named support throughout the process)
  • a guidance pack and application form will be sent to the school to complete

Intention to convert, eligibility checks

  • the governing body (and foundation, if relevant) will pass a resolution in favour of academy conversion
  • a short ‘intention to convert’ form, including confirmation of the above resolutions and Ofsted ‘outstanding’ rating will be submitted
  • discussions will be held with the DfE-named person on plans to support another school to raise standards
  • the secretary of state will be asked to approve the school’s proposal

Funding agreement

  • DfE model documents will be provided to assist in finalising governance documents
  • the academy trust will have to be registered with Companies House
  • leasing arrangements will have to be agreed for the school land and buildings
  • TUPE consultation on staff will be conducted by the local authority or governing body (whichever is the employer)
  • the funding agreement will be submitted to the secretary of state for approval
  • the secretary of state will approve, make an Academy Order and ask the local authority to cease to maintain the school


  • CRB checks will be carried out as necessary
  • new financial systems and contracts will be put in place
  • academy registrations (e.g. with examination bodies) will be completed

For the first wave of applications, the key test for approving conversion will be that the school is rated ‘outstanding’ by Ofsted. The secretary of state expects that he will approve all applications from outstanding schools, unless they have a substantial financial deficit or other exceptional circumstances apply.

It should not be assumed that governing bodies will rubber-stamp a conversion. It is important that the whole school community support the change, whether or not this is a legal requirement. In short, the idea to convert will have to be ‘sold’ to governors, staff, pupils and parents.

To convert or not?

Mike Baker, who was the BBC’s education editor for nearly 20 years, has commented that there are three reasons why schools might want to convert: status, money, and ‘state of mind’.

By giving all outstanding schools an easy conversion route, the Bill links new academies with quality and status. In the past, academies were a response to failure and intended to raise standards. They are now to be associated with exciting new buildings, enthusiastic staff and high aspirations for their pupils.

But some existing academies have been judged ‘inadequate’ by Ofsted, and so having academy status may not be sufficient protection from failure. Schools considering conversion may have to take a calculated risk about what the future holds for these new academies.

This may be the main driving force for most schools deciding to convert, as academy status definitely means an increase in funding (although the exact amount is not yet known). It has been estimated that it will bring a cash uplift of 10 per cent or more, being the money otherwise held back by local authorities for central education services.

This could translate into a lot of money for a large secondary school, and give head teachers the choice to use the money as they see fit, sometimes buying back services from the local authority – such as the administration and staffing of admission appeal hearings.

Balanced against this though, is the removal of the support that many schools receive from their local authority, which governors in particular can find very useful. These services can be bought in by new academies, but at a cost.

State of mind
It has been argued that academy status is about a ‘state of mind’. This was associated with the first academies: with imaginative state-of-the-art buildings, and new approaches to teaching and learning. Some of the more recent academies have been less innovative, and schools that are already outstanding need not demonstrate innovation. It will be interesting to see, if the majority of schools become academies, whether they will become the mainstream, with the remaining local-authority-maintained schools that take disadvantaged pupils with their ‘pupil premiums’, becoming the new innovators.

Schools will not become academies without carefully considering all the implications, such as going it alone without local authority support, and the amount of planning and preparation that will be required in relation to, for example, land ownership, contract and staffing transfers. Schools already in a federation of schools may find this easier.

This may be the beginning of large chains of schools run by existing academy sponsors or education management firms – a small local education authority in effect. Who steps in if things go wrong? If the academy sponsors or managers fill this role, they are not answerable in the same way as elected politicians.

Is it best to register an interest and then adopt a ‘wait and see’ attitude? The choice is yours.


The DfE recognises that schools may incur costs such as: obtaining legal advice on the documents necessary for setting up the academy, advice on the process for transferring staff, and new signage and stationery.

As a contribution to these costs a flat-rate grant, normally £25,000, will be payable to the school’s bank account. When the DfE receives notification of a school’s intention to convert, it will provide a form so that the school can make a claim, supported by a brief case for the claim.

The DfE believes it is fair that schools intending to acquire academy status should devote some of their own resources to the process. This gives them an incentive to keep costs to a minimum over the DfE support, and minimises the effect on the education budget for all schools. If the school does not spend the whole £25,000, the academy can use any balance, as part of its overall income, once open.
The school can make a later claim for additional support if it finds, well into the conversion process, that costs are much higher than initially expected — for example, if there are legal difficulties. But the school will be expected, so far as possible, to have absorbed the extra costs itself, and any late claim will be assessed in the light of that.

Budget surpluses
Under existing law, closing schools’ surpluses remains with the local authority (including when they become an academy). Under the Bill, the local authority must:

  • determine whether a converting school has a budget surplus (i.e. any unspent portion of the school’s budget share, as well as any unspent portion of any other funding made available to the school by the local authority, including government grants, and money brought forward from previous years), and, if so, the amount
  • transfer that amount to the academy proprietor

The secretary of state will prescribe the procedure for determination and payment of any surplus, including timings, and for a right to apply for a review of a determination.

Find out more

Ingrid Sutherland is a solicitor and an education consultant.

See Q & A on conversion practicalities. Next issue we look at official guidance on the Academies Bill.