The DfE cannot compel academies to share their land, but changes to funding agreements will make it difficult to resist

Amid concerns about the shortage of pupil places at primary schools in England, the Department for Education (DfE) has introduced new provisions into the model funding agreements of academy schools. These are designed to enable the department to take land from academies where that land is underutilised and for it to be used by other academies or as a site for new academies.

Under these new rules, the DfE cannot compel academies to share their land. However, the secretary of state is obliged to consult with academies that have underutilised land in areas where parental demand or basic need for additional school places cannot be met to determine whether part of the land could be provided to another academy trust. The land would either be given or sublet to the other trust, so that it could establish and maintain an educational institution on the existing academy’s site.

The provisions will only apply where the secretary of state identifies basic or parental need for additional places in the area in which the academy is situated. The new funding agreement sets out the circumstances in which the provisions will operate. A basic need will arise when the forecast demand for pupil places in the area is greater than the existing capacity to provide them. A parental need will arise when the DfE is actually aware of an additional demand for pupil places in the area, following representations from parents in that area.

The terms of the new funding agreement provisions are non-negotiable

The new funding agreement does not go into any detail as to what criteria would be used to assess whether land is “underutilised”, it simply describes a position where “not all the land is needed for the operation of the academy at planned capacity”. Until these provisions are actually used by the secretary of state, it is difficult to advise schools on whether they have land that would fall into this definition. In reality, however, if an area has a high need for additional school places, then it is going to be harder for an academy to argue that it needs all its land for its operational needs.

The language used in the funding agreement is interesting. There is no mechanism for compelling an academy to give up its land. However, the new provisions require the secretary of state to consult with the academy where underutilisation is identified and it is during this process that the secretary of state will determine whether the land could be sublet or transferred. Once an academy and the secretary of state have agreed that part of the land should be transferred, the original academy must use its best endeavours to obtain the approval of the landlord to enable it to share occupation of the land with the incoming trust. In reality, it is going to be difficult for an academy to resist a land sharing agreement once underutilisation has been identified.

There are seven possible versions of these new land provisions in the supplemental funding agreement. These vary slightly depending on whether the land is already owned/used by the academy, or if it is a new site (either freehold or leasehold) provided by the EFA. There are no sharing provisions if the academy’s existing site is held under a church supplemental agreement or lease from private site trustees.

New academies will have no choice but to accept the new funding agreement provisions as the terms are non-negotiable. At the moment, existing academies cannot be forced to change their funding agreements. However, each time an academy changes its articles, applies for a capital grant or takes on another school, then it is required to update its funding agreement to the latest model – and the new land sharing provisions will then apply. This means that over time many academy’s funding agreements will be updated to include the new provisions. Academies can resist the change, but only for so long as they don’t need to make other material changes to the academy.

Alison Talbot is a partner at law firm Blake Morgan. She specialises in restructuring and academy conversions