Academy chains unlocked II: inclusive chain growth

21 September 2016

This, the second blog in a series outlining the key findings and recommendations of Reform’s latest report, Academy chains unlocked, addresses the need for government to encourage high-performing chains to spread to areas of poor performance.

In 2014, Reform described the transition from local authority schools to academies as an “unfinished revolution”. Two-years later, a lack of government conviction is in danger of rendering the revolution forever unfinished. Though the Government expects “most schools will join [a multi-academy trust]” because they are “the best long term formal arrangement” for academy schools to flourish, their current preoccupation with grammar schools suggests support to expand chains is set to take a back seat. This is particularly concerning in light of recent evidence showing the variable success of academy chains so far. If the Government’s primary focus really is on schools currently struggling, attention must urgently return to strengthening the academy system. To do this, high-performing academy chains must be encouraged to spread to the areas that need them most.

In the first survey of academy chain chief executives, published by Reform yesterday, appetite for growth is shown to be high. All but four respondents want to expand by at least 50 per cent, and more than half want to over double in size by 2021-22.

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However, one-third of chains were also found to have refused to take on new schools when asked to do so by someone external, such as a Regional Schools Commissioner (RSC). Of those who report having rejected a school in the past, over 40 per cent claim they do so at least once a year, suggesting persistent barriers to academy chain expansion exist. This neuters the power of RSCs to intervene in cases of underperformance, as successful academy ‘re-brokerages’ – whereby an underperforming academy is placed with a different chain – are clearly dependent on high-performing chains being willing to take over.

The geographical location of schools was the reason chain leaders most commonly cited for why they had declined take overs.

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This is not all together surprising: it has been argued that inter-school collaboration is dependent on close dispersion, and chains have received high-profile criticism for operating over wide areas. Expanding on the importance of school location, chief executives interviewed for Academy chains unlocked also explained how a close dispersion can facilitate significant efficiencies from staff working across multiple academies.

Survey responses and interviews also reveal reticence to take on smaller schools and schools in financial difficulties. Again, this is unsurprising in a system where school funding is awarded per pupil, as operating costs in small schools are likely to represent a larger proportion of the total budget.

In order for high-performing trusts to expand, incentives to take on schools that are geographically remote, small or in financial difficulties must be sharpened. Academy chains unlocked offers a cost-effective solution.

The report recommends that the various sponsor capacity funds (see below) – which paid out in total an estimated £62 million between 2012 and 2015 – should be scrapped. Beyond quite broad eligibility criteria, the decision-making process behind these awards is unclear. This makes it very difficult to assess whether they effectively incentivise chains to take on schools that they otherwise would not, making it impossible to judge value for money.

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In their place, a ‘struggling school premium’ should be established. This should be attached to schools fulfilling the criteria that currently deter chains from taking them on. This would improve transparency and more accurately target resources on schools that present a barrier to chain expansion.

To ensure value for money, the report also recommends including performance targets in chain’s funding agreements, and commissioners should recoup a proportion of the premium if a chain fails to deliver its contract.

Ultimately, the aim must be to move away from government growth subsidies to a self-supporting academy system in which chains utilise reserves to support their growth. Accompanying recommendations would help deliver such a system: by placing funding with the chain rather than the school, chief executives would be empowered to distribute reserves across the chain without school heads presenting a barrier. In the immediate term, however, urgent intervention is needed to address the tepid performance of the academy system. The first step is to help quality chains spread to where they are needed most.

Ben Dobson, Researcher, Reform

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