Schools

New ESFA chief vows ‘culture shift’ to ease trust fears

Watchdog must avoid jumping to 'punitive measures too quickly', but 'laser-like' focus on financial management justified

Watchdog must avoid jumping to 'punitive measures too quickly', but 'laser-like' focus on financial management justified

17 Nov 2022, 14:35

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The new chief executive of the Education and Skills Funding Agency (ESFA) wants to build the academy sector’s “trust”, with more focus on prevention and partnership to tackle sector fears of the watchdog.

David Withey, who joined the agency three months ago, said in a speech to sector leaders that the ESFA needed to make sure it doesn’t “jump to punitive measures too quickly”.

But he suggested recent developments on school funding had underlined the value of having a regulator with a “laser-like focus on financial management”.

Speaking at the Schools and Academies Show in Birmingham, Withey set out how he had begun trying to encourage a “shift of perception” of the body, however.

The ESFA is responsible for distributing £67 billion of funding for education and training, and ensuring it is properly spent.

Reducing the ‘fear factor’

He said he had “gone around the country asking, how do you perceive ESFA” – and while there was lots of positive feedback, some individuals highlighted “the fear factor”.

David Withey ESFA
Withey

“I’m not sure calls from ESFA are enormously welcome,” he added.

He said a “culture shift” was needed, with change on “both sides”, adding: “We want to build more trust with you – so you feel more able to come and talk about the financial issues you’re facing.”

Withey added that the ESFA needs to ensure it does not “jump to punitive measures too quickly”, and recognised that the vast majority of trusts are doing the right thing. While a minority do not, it is usually not down to “malicious intent”, he said.

Prevention is better than the cure, he added, helping ensure things do not “snowball into bigger and possibly irredeemable issues”.

Tackling ‘unwieldy’ and ‘complex’ regulation

While the ESFA will continue to pursue recovery of misused funds and sanctions, it will continue “looking at trusts based on risk” and be “thinking about our risk appetite”.

While auditors are often “rightly risk-averse” – necessary amid past headlines over sector “bad behaviour” – “my sense is the sector is now in a much more mature position”. He stopped short of stating the ESFA would allow trusts to take more risks, however.

Trust leaders and sector bodies like the Confederation of School Trusts have called for the regulator to minimise the regulatory burden on strong trusts.

The government is currently reviewing regulation and commissioning rules for academies, and academies minister Baroness Barran stressed in her own conference speech this would seek to minimise and simplify reporting burdens.

Withey, former chief operating officer at the New South Wales department for education – which he compared to an “uber-trust” directly running more than 2,000 schools – acknowledged some of the ESFA’s frameworks could feel “complex” even for him, and “unwieldy”.

New ‘digital funding system’ planned

The ESFA is working on a “prototype digital funding system”, a “one-stop shop” for trusts to see their funding lines in one place – with simplicity a key emphasis.

Regulations and requests placed on academies will only be “when absolutely needed”. The agency is currently reviewing the requirements set out in the academy trust handbook to shape its 2023 version. The ESFA is “very open” to further trust feedback, he said.

Asked by Schools Week about the agency’s partially paused clampdown on “excessive” executive pay – plagued by data issues – he said it was still “trying to get a list we can stand behind”.

Speaking only minutes after the chancellor’s autumn statement, he said he recognised that pay, inflation and energy costs were having a “real impact” on schools.

“We are under no illusions it’s a really difficult time for school leaders”.

Reserves not for managing long-term pressures

While he said there was an argument reserves were for rainy days – and “it’s raining” – he said it was not “prudent to use reserves to manage longer-term operational pressures”.

The ESFA is monitoring financial challenges “very carefully”, and is aware leaders will face “ongoing tough decisions” both now and over the next couple of years, he said. “We do hear you.”

Asked after his speech about the just-announced £2.3 billion extra funding for schools next year, he said it “sounds like a positive outcome”.

The ESFA had been “working very hard to articulate our case”, including conducting modelling, he said, suggesting the agency may have lobbied for extra cash.

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