The Education and Skills Funding Agency is set to be stripped of wide-ranging policy roles, lose hundreds of staff and face a governance shakeup after a review.
The Department for Education will take more academy and post-16 policy oversight in-house as part of a wider internal reorganisation, including a new London region.
It has agreed to virtually all the recommendations of a review into ESFA’s work by the University of Sunderland vice-chancellor Sir David Bell, published today.
Here is what the changes mean.
1. ESFA role stripped back to funding
The DfE agreed to a central review recommendation that ESFA continue to operate as an arm’s length body, but “refocus” on funding, including assurance and compliance – stripping back its other regulatory and policy roles.
Bell wrote that the “sheer breadth of its current role risks distracting from its core funding delivery role and confuses customers”.
He claimed the government lacks a “unified directing voice” over schools regionally. Regional schools commissioners currently oversee educational performance, while ESFA oversees financial management.
This “sometimes creates points of friction internally and a lack of clarity externally”.
Permanent secretary Susan Acland Hood said changes would “allow ESFA to continue to focus on making sure that public funds are properly spent”.
The DfE also agreed to “work towards” giving ESFA full control of education funding, moving around £8 billion out of direct DfE hands. Departmental grant management “can be inconsistent”, and it agreed to start using ESFA’s management system.
Further details of the implications for routine maintained school funding and many specific grants were not provided.
2. Tighter DfE grip on academy oversight
Curbing ESFA’s role will mean its non-financial regulatory roles are brought in-house at the DfE.
Oversight of academy governance, safeguarding, new trusts and schools, university technical college engagement, and networking events will move to the DfE’s regional teams.
The DfE also agreed it should take “ownership” of the Academy Trust Handbook from ESFA, unless the handbook is stripped back to only financial matters.
Meanwhile management of post-16 and skills policy, including T-levels, level 4 and 5 qualifications and apprenticeships, will similarly be consolidated within the DfE. Providers currently experience post-16 oversight as an “incoherent burden”.
The changes fit into a wider revamp of the department’s structure, with its unusual eight regional schools commissioner areas to be redrawn to fit more typical administrative regions. It means a new London region and commissioner overseeing academies.
Acland-Hood said reforms will ensure the department “thinks, acts and partners much better locally”.
3. Dfe to ‘consider’ single school complaints system
Currently, the DfE’s “school complaints unit” handles issues reported about maintained schools.
Meanwhile ESFA’s “academies complaints and customer insight unit” handles them for academies.
The DfE accepted Bell’s recommendation that it should “consider” taking direct control of academy complaints, consolidating them maintained school complaints.
The changes come less than a week after Sam Freedman, a former DfE adviser, called England’s dual system of maintained and academies “inefficient and confusing”, and academy regulation “incoherent”.
His Institute for Government report backed full academisation, beginning with consolidating RSC, ESFA and some Ofsted powers.
4. Staff numbers halved as officials move to DfE
Bell’s report estimates ESFA will be left with between 750 and 800 staff – down 54.3 per cent on the 1,749 staff it averaged throughout 2020-21.
Bell linked his estimate to the agency being smaller “as colleagues working on post-16 skills and in other areas move into DfE”. He also says actual figures will be “subject to further work and the exact figure will need to be determined in implementation”.
But elsewhere the report hints at potential job cuts. The DfE accepted his recommendation that the sizing of all directorate support teams – including those moving into the DfE – should be reviewed. ESFA’s support teams will now also “not include any designated HR roles”.
Where corporate functions are moved in-house, the DfE should also “consider opportunities for efficiencies”, the report added.
Bell himself acknowledged any review “can cause uncertainty and anxiety”, and said his team had tried to minimise this by engaging colleagues throughout.
5. Governance overhaul at ESFA
The DfE accepted Bell’s call for several reforms to how ESFA itself is governed and overseen by the DfE.
Currently ESFA is “often treated more as a part of the core department than as an executive agency”, Bell wrote.
He said its existing setup enabled flexibility, but risked undermining its independence and fragmenting oversight of its work. The DfE “has no direct mechanisms” to oversee ESFA in a formal way at present.
Mike Green, the DfE’s chief operating officer, will now formally become ESFA’s senior sponsor.
Creating a wider sponsorship team will provide a “comprehensive mechanism for overarching performance oversight, collaborative reprioritisation, and enabling collaborative working and learning”.
The department also agreed to a review of ESFA’s internal governance. This should ensure both “robust and efficient oversight” and that its setup and future non-exec directors are “tailored” to its new role.