WCAT can’t keep its schools’ reserves, and 4 other things we learned from education questions

Justine Greening and her ministerial team faced questions from MPs in the House of Commons this afternoon.

Here are the main things we’ve learned from the debate:

1. WCAT won’t be able to keep school reserves

Surpluses taken from schools by the doomed Wakefield City Academies Trust will not be kept by the trust once it is wound up, Nick Gibb told MPs.

WCAT is currently in the process of giving up all of its schools, after admitting it doesn’t have the capacity to improve them.

The schools minister said WCAT “will not be able to retain any of the reserves it holds at the point of dissolution”.

He was responding to questions from Philip Davies, the MP for Shipley in Yorkshire, who said that more than £276,000 in reserves had recently been transferred to the trust from High Crags Academy in his constituency.

Gibb said schools from the trust would be receiving “the resources and support they needed to raise academic standards”, including High Crags, which is to be rebrokered to the Tauheedul Education Trust.

2. Parents are unhappy with the WCAT rebrokering process

Following the news that all 21 of WCAT’s schools are to be taken on by other sponsors, parents are struggling to get information about the process, according to one local MP.

Yvette Cooper, the Labour MP for Pontefract, Normaton and Castleford, said parents at Freeston Academy had been “promised consultation” on the future of the school, and were worried about it losing its name, identity and uniform in the transition.

Instead, those parents have been told to “travel miles to another school in another town only for a meeting”, for which tickets had to be “booked online”, Cooper said.

In response, Gibb said the government was “not happy” with WCAT’s performance, and had “taken swift action” to rebroker the schools.

3. Ministers say the new maths GCSEs aren’t putting pupils off A-level

Gibb was grilled by the former shadow education secretary Lucy Powell about the new, harder maths GCSEs.

Powell reported that the pass mark for the new higher-level GCSE paper was just 18 out of 100, and asked whether the difficulty was putting pupils off studying the subject further.

Gibb said the new GCSE was “significantly more demanding”  to ensure “a better fit and preparation for students to go on to study maths at A-level”.

The minister also insisted that the comparable outcomes system aimed to ensure that “roughly the same proportion of pupils” would achieve the new 9 to 1 grades as their equivalent A* to G grades.

While he accepted this would mean that pupils “might achieve a lower grade” this year, Gibb said he expects the figure to rise as schools get used to the new curriculum.

4. We still don’t know where £1.3bn in savings will come from

The government has pledged to give schools an additional £1.3 billion, but still isn’t saying where the money will come from.

Justine Greening was pressed for information on how the Department for Education will come by the additional money, some of which will come from general departmental savings.

She said her department had been “working to identify” the savings, but did not say more about how successful that work had been.

Last month, Jonathan Slater, the permanent secretary at the DfE, admitted not all the savings had been found yet.

5. Schools will get new guidance on sexual assault this term

The education secretary has confirmed that new interim guidance on how to deal with reports of sexual assault and harassment will be issued to schools before the end of the year.

Labour MP Stella Creasy urged Greening to fast-track the guidance, which she claimed was “promised months and months ago”.

Her comments follow an unfolding sexual harassment scandal that is rocking Westminster, and prompting calls for better education about consent.

“We will be issuing interim guidance this term,” Greening confirmed, adding that longer-term change in attitudes towards “totally unacceptable” workplace behaviour would need to start in schools.

“That’s why we’re now updating the relationships and sex education guidance for the first time since 2000.”

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  1. Mark Watson

    This really shows such muddled thinking on the WCAT reserves point from all parties it’s hard to know where to start.
    “Surpluses will not be kept by the trust once it is wound up” – sorry to point out the obvious Mr Gibb, but once the trust is wound up it will cease to exist and therefore will not and cannot own anything.
    On top of this is the very simple charitable principle, as outlined clearly in its Articles of Association, that if WCAT is wound up then after satisfying all its debt and liabilities anything that remains shall be given or transferred to some other charity or charities having similar charitable education objects.
    As far as I’m aware no-one has ever broached the idea that any aggregate surplus would not ‘follow’ the schools to their new sponsors. The issue seems to be that people have fundamentally misunderstood the concept of a multi-academy trust. None of the 21 schools ever “owned” any money as none of them were separate legal entities – instead each of them had a nominal figure allocated to them internally within WCAT. High Crags Academy may have been nominally in the black by £275k, but I’m guessing that others within WCAT were nominally in the red. What WCAT seems to be doing is, as referred to above, satisfying all its debts and liabilities by bringing everything together from all 21 schools. Whatever remains will be the aggregate surplus which will transfer along with the 21 schools.

    • Tim Warneford

      Hi Mark,
      Forgive my ignorance but I have been trying to get to the very bottom of such a scenario in relation to another MAT that has seen its constituent schools broken up and again where the majority have ben in deficit and the minority in surplus. Can you just confirm whether my interpretation of what you have said is correct? The MAT is the lean entity and is thus responsible for how its member schools perform and so that in effect it is a mater of collective responsibility in so far as the no member transfers with their surplus or deficit when re-brokered rather the MATs accounts are settled and any surplus is equally distributed across each member? Any final account with the MAT that is in deficit is picked up by the DfE?
      Advance apologies if i have got this wrong, please could you let me know if i have and where?
      Much appreciated.
      Tim Warneford

      • Mark Watson

        Hi Tim
        Within a MAT there is only one entity – the academy trust company that sits in the middle. Legally and financially speaking it owns all the assets, employs all the staff, holds the land interests etc.
        So yes, there is collective responsibility in that the MAT company is responsible for everything.
        The MAT can delegate powers, which can include financial responsibility, to individual local governing bodies (which could be perceived as equating to ‘schools’). However the important thing is to remember these are delegated powers – the LGBs are acting on behalf of the MAT (not on their own account) and the powers, and money, can at any time be recalled by the MAT.
        When it comes to all the schools in a MAT being rebrokered, the MAT is in practical terms being wound up. Just like any organisation in a similar scenario this is the point at which you balance the books. Does the MAT have total assets which exceed the total liabilities?
        In the scenario you are describing, it seems that like WCAT the MAT has notionally placed its cash assets (the ‘surpluses’) in various pots – labelled School 1, School 2 etc. Equally it has probably notionally allocated its liabilities against School 1, School 2 etc. However when it comes to a winding up all of these must be aggregated.
        If, after this aggregation there is an overall surplus, or an overall deficit, then this leads to a number of possibilities (none of this is straightforward!):
        1) Where there is a surplus there is no formula for how that is split between the schools as they go off to join their new MATs. Should it be split equally, or in proportion to their contribution to the overall surplus?
        2) Equally, where there is a deficit, does DfE step in and clear the deficit leaving the schools to join another MAT with a ‘clean slate’? Or will the incoming MATs be forced to take on the academies with a level of deficit, and as above should the deficit be split equally, or in proportion to each school’s contribution to the overall deficit?
        There is no fixed answer.
        I hope that’s cleared it up a little, albeit this is something that could be discussed for a whole day. What frustrates me, and what lead to my rant above, is that often this is portrayed as the shadowy MAT sucking in schools’ surpluses for its own benefit. This just isn’t the case. The MAT doesn’t benefit from this – it is going to be wound up, any remaining assets will be passed to other academy trusts and the individuals/organisations behind the MAT (the members and directors) won’t benefit personally in any way at all.

  2. Tim Warneford

    Thanks Mark, much appreciated.
    I have witnessed a scenario where the DfE/RSC have sought to invite the two MATs seeking to sponsor one of the schools with significant deficit, to include within their bids the level of which they are prepared to absorb the deficit. Surely, the risk should remain with the DfE and they should pick up the tab?

    • Mark Watson

      That’s certainly an argument that could be made (and one which the incoming MATs would presumably be strongly in favour of!).
      However a MAT looking to take on a school in this situation should be taking it on on the basis that it can turn it around and change it from being a ‘loss-making’ school into a ‘surplus making’ school (this is on a general ongoing basis, not necessarily needing to be so every year) – this is the only long-term way the MAT could survive.
      So I can understand DfE taking the position that if the MAT is going to be generating surplus in the long-term from the school why shouldn’t it use some of that surplus to pay off some of the current deficit?

    • Tim – there doesn’t seem to be a hard and fast rule governing deficits when academies are rebrokered. Deficit amounts aren’t included in published rebrokerage figures and they can be considerable.
      For example, The Thinking Schools Academy Trust (TSAT) told me (Freedom of Information) it received £802k to cover the deficit from The Bishop of Rochester Academy (now The Victory Academy). £474k of this is repayable over three years starting 2017/18. TSAT told me it also received £150k deficit funding as part of a three year plan to support restructuring at Chatham Grammar School for Boys (now Holcombe Grammar School).
      The DfE is known to have written off a deficit from a defunct academy trust. Schools Week reported on 19 July 2017 it had written of £500k loss when Lilac Sky Schools Academy Trust was wound up. I can’t provide a link because putting more than one link in a comment sends the comment to moderation and delays publication but if a search for Lilac Sky should find the article.

      • Tim Warneford

        Good afternoon Janet, thank you. Both you and Mark for doing more to shed light on what all too frequently seems conveniently opaque area than any other source i have come across.
        In my experience whilst schools naturally concentrate on their ability to turn around a ‘failing school’ in educational terms they are all too often not adequately appraised of the other risks and liabilities that are unearthed during the desk top/superficial due diligence process.
        The DfE also place time constraints on the bidding and thus all too often decisions are made without sufficient time afforded the bidders.