Can a school decide to leave an academy trust?

As one regional schools commissioner ponders whether a school can voluntarily quit its multi-academy trust, education consultant Simon Foulkes examines the legal issues

Schools occasionally leave one multi-academy trust to join another. They can be rebrokered for a number of reasons: failures of educational performance, management and governance, or those responsible for them might ask the regional schools commissioner to rebroker them for another reason. The 2016 white paper ‘Education Excellence Everywhere’, which was never made law, also said parents would be able to petition RSCs for a move to a different MAT.

In none of these cases, however, does the local governing body (LGB) itself take a decision to leave its MAT. That decision is taken by others.

There are two reasons for this: first, the lack of any relevant powers on the part of the members of a LGB, and second, the overriding powers and duties of the directors/trustees of the MAT.

Local governing body powers

When a school joins a MAT, it ceases, in governance terms, to exist as a separate legal entity. There is no instrument of government, its staff all become MAT employees, and LGB members hold their positions only if they are appointed by the MAT directors.

LGB members are not in the same controlling position as the governors of a maintained school; they only exercise powers delegated to them by the directors. These powers can be amended or removed by the directors at will, unless there are entrenchment clauses, which may be present in the case of church schools. LGB members themselves can have their appointments terminated by the directors at any time.

Trustee powers

Academies are not, legally speaking, maintained schools but independent schools created as companies and exempt charities under the Companies Act. Consequently, the directors of a MAT have an overriding duty not to any individual academy but to the MAT as an overall entity, both as directors and as charity trustees.

When a school converts to academy status within a MAT, the directors enter into a supplemental funding agreement with the education secretary. In return for funding, they undertake to run the school within the MAT. The SFA is supplemental to the master funding agreement (MFA) which sets out the requirements for the MAT to run its schools. The SFA is specifically about an individual school converting to be part of the MAT, but the school is not a legal party to the SFA. The parties are the directors of the MAT and the Secretary of State.

The SFA for a given school can be terminated (see Section 5 of the standard SFA) but note the following:

– As the school is not a party to the SFA, it has no option to terminate it
– The MAT may terminate the SFA, but only by giving seven years’ notice, or if it considers itself in danger of insolvency
– The secretary of state may terminate the SFA by a set of different processes (see the SFA)

The legal position is therefore clear: a school cannot itself choose to leave a MAT and carry this decision through, because:

– The LGB has no separate legal ability to take such a decision
– A decision to request that a school be moved to another MAT would normally be for the MAT directors/trustees and would have to be taken in the interests of the MAT as a whole
– Normal rebrokering decisions are entirely for the RSC or for a religious authority or trustees – normally on statutory or formal contractual grounds
– The individual academy is not party to the SFA
– The staff of an individual academy are employed by the MAT and owe it their loyalty
– Although parents and school staff might petition the RSC for the school to leave the MAT, the decision is the RSC’s and, in the absence of significant performance issues, the MAT itself

In reality, circumstances can arise in which everyone involved has come to feel an academy should move to a different MAT, but such circumstances have to be handled with great care. An academy is neither a continuing entity subject only to statutory powers of closure like a maintained school, nor is it merely a commodity to be acquired by one MAT from another.

Simon Foulkes is an education consultant at Lee Bolton Monier-Williams solicitors

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