School measures - Academies: Power to Secure Performance of Proprietor’s Duties

This measure will create a power to direct academy trusts that are not complying with their legal duties or are acting or proposing to act unreasonably. The Secretary of State has comparable powers in relation to the governing bodies of maintained schools (sections 496 and 497 of the Education Act 1996).

The current approach when an academy trust is not complying with its legal obligations is based on contractual arrangements between the Secretary of State or the Department for Education and the individual academy trust. Failure of an academy trust to comply with its legal duties will be a breach of its funding agreement. As a result, the Department for Education has the power to issue a Termination Warning Notice. If the trust fails to meet the conditions specified in the Termination Warning Notice, a Termination Notice may be issued.

In some circumstances, where a trust is in breach of a legal requirement set out in the Academy Trust Handbook, the Secretary of State may issue a Notice to Improve requiring the trust to remedy the breach. In the event that the trust did not comply with the NtI, the Secretary of State could then issue a Termination Warning Notice and then a Termination Notice if the trust failed to meet the Termination Warning Notice conditions. In practice, issuing a Termination Notice would lead to the removal of the relevant academy or academies from their existing academy trust and transferring them to another trust and could ultimately lead to the closure of the trust. It is recognised that the process of transferring an academy to a different trust can be disruptive for pupils and parents.

The purpose of this provision is to create a new legal route that allows the Secretary of State to issue a compliance direction to academy trusts that have breached their legal duties or are acting unreasonably. It will provide a straightforward and proportionate remedy where there is a specific breach or incident of unreasonable behaviour, in the same way that the issue of a direction pursuant to sections 496 or 497 of the Education Act 1996 applies to maintained schools.

The new compliance direction power allows the Secretary of State to intervene when an academy trust has failed to comply with its legal obligations or is acting unreasonably in relation to those obligations. The power allows the Secretary of State to specify what actions the trust must take to rectify the failure, where it would be disproportionate to issue a Termination Warning Notice. Before exercising the power, the Secretary of State will invite representations from the trust and, where relevant in all but exceptional circumstances. Academy trusts will be required to comply with the direction under this power. If an academy trust fails to comply it could result in a mandatory order or the issuing of a Termination Warning Notice.

The above analysis relates to Children’s Wellbeing and Schools Bill which has not yet become law and may be subject to change as it passes through Parliament. We will be posting updates to this page if there are any key developments but the above may not reflect the latest changes to the legislation.  Please contact our School Support (schoolsupport@wslaw.co.uk)  or Schools HR (schoolshr@wslaw.co.uk) teams if you require an update on the latest status of the Bill.