If sponsors won’t take on struggling schools, who will?

Tuesday, March 7th, 2017

by John Davies

Imagine someone sets up a business. They try their best to make it work, with money and effort, but it turns out that people, able to choose what they buy, simply don’t want the product it sells. ‘Good! Choice has weeded out a bad product!’ the logic goes. It’s a great model in the world of business. But what happens if the product isn’t a chocolate bar or smartphone, but a school?

The government currently requires multi-academy trusts (MATs) to explain how their stronger schools will support weaker schools. The MAT, acting as a kind of investor, makes a rational judgement as to whether a ‘weaker’ school is worth taking on. But when does ‘weak’ become ‘too weak’? When does a school simply have too many problems for a MAT to see it as worth the investment? And what happens to that school? The government has created a kind of market in how schools are paired up with sponsors, but the current system doesn’t actually have any market incentives to encourage MATs to take on schools that are struggling.

Using the principles of the market gained real momentum in public policy in the 1990s. Centre left parties, reeling from the fall of the Berlin wall and the triumph of 1980s capitalism injected energy into their policy-making by building the concept of choice and market incentives into public policy. This defined New Labour’s thinking on the public sector, and the idea of introducing target-based mechanisms for driving improvement in hospitals and schools took root.

No one working in education throughout the 1990s and 2000s will have missed this. Measuring schools by the number of pupils who attained 5 A* – Cs at GCSE is one prime example. And if you put a big stick behind a target, it tends to have an effect. Telling people that their school will be ranked low on a league table or be turned into an academy if they don’t meet a certain target, in an ideal world, leads to improvement.

But what happens when market incentives fail, or don’t exist in the first place? In their policy on MATs, the government seems to have forgotten that if you marketise a system, you need proper market incentives. Academy sponsors are unlikely to make risky investments without a reward for doing so, or punishment for not.

The Guardian recently reported on 60 schools who have been unable to find sponsors after receiving academy orders. It makes for alarming reading. School leaders cannot plan for the future, as they don’t know who will be running the school in a year’s time. One school in Birmingham, according to the report, faces closure simply because no academy sponsors will take on the school’s financial problems.

In a purely commercial market, this sort of thing doesn’t matter as much. Businesses selling unpopular products go out of business. But schools aren’t products. If a school’s ‘product’ is eliminated from the market because no academy sponsor can take the risk on it, then that’s a town or village without a vital community asset. A system that doesn’t encourage sponsors to want to take on the most challenging schools can’t claim to be truly transformative.

This is not necessarily a criticism of academy sponsors. Intense financial pressures, attainment targets and the sustainability of the trust as a business are all strong incentives not to take on schools that may have severe and longstanding financial problems, or require extensive building work, for example. And if you’re going to introduce market principles into a system, you can’t really blame those working in it for operating according to the market incentives (or lack of) that underpin it.

Unless you make it attractive to take on the toughest prospects, with the promise of time to turn things around, it’s unlikely that people will be willing to take the risk. Some may call for greater cash rewards, although in the current financial context that seems unlikely.

In the midst of this appears the possibility for a renewed role for local authorities, although more by accident than design. Policy always has unintended consequences, and it may be that because the system doesn’t currently cajole sponsors into taking on certain schools, local authorities are asked to step in.

The government is currently considering allowing Kent County Council to form a MAT for some of its small, rural primary schools, because academy sponsors can’t be found. Norfolk County Council is separating its school improvement service and setting it up as a private company, with the hope that it will become a “safety net” for schools that academy sponsors aren’t willing to take on.

The Education Select Committee, getting bolder with each report in its challenges for the government, also believes there is a role for local authorities to sponsor academies. Its latest mini-grenade of a report says that councils “with a track record of strong educational performance” should be allowed to create MATs.

Where might this lead? Well, if academy sponsors effectively get first dibs on which schools to take on and which to leave on the shelf, councils will inevitably be left to work with the most challenging schools. Will it be fair to judge their spun-out MATs on the same basis as other, traditional MATs? And what of the actual schools? It’s the equivalent of being picked last for the football team in PE. Not exactly a great feeling.

If the government does open the door to councils setting up MATs, expect it to be done through agreements with individual councils, rather than any bold. sector-wide announcements that could be more easily presented as a u-turn. After all, accepting that councils might have a role to play in school improvement represents quite different thinking to that of a couple of years ago.

Alternatively, and to save face, the government might be tempted to rejig the incentives for existing academy sponsors, or encourage regional schools commissioners to get a bit tougher with MATs in encouraging them to take on struggling schools. Without giving sponsors a firm nudge or greater rewards, the government may find that the schools most in need of support are left behind.

Comments 2

  1. warnefordco 7th March 2017

    Absolutely on the money. Live by the market and die by the market.

    Government determined that LA’s business model, of acting as client and provider was not to their liking (Enabling only),so they have created one where they empower the MAT to take advantage of mechanisms such as economies of scale and to seek private providers to deliver services once delivered by the LA ,who could originally provide such services at cost, as they too had economies of scale and could thus cross subsidise primaries with secondaries etc.

    The entire premise of the model, is the very volume that LA’s used to enjoy. However, the average size MAT is still way short of being at an optimal size to accrue such benefits and until it doubles to 10 plus they will struggle.
    The stand alone academies are ultimately going to have to form or join existing chains along with the remaining 16,000 still to convert.

    The brinkmanship is starting to play out now as previously, the depth and scope of due diligence carried out as part of the legal conveyance process was superficial (The £25k grant to cover costs is insufficient for schools to cover all aspects of the transfer) and thus schools were not adequately appraised of the risk, the liabilities of converting, only the rewards and assets.

    MAT’s on the other hand are in the main, that much more savvy and more risk adverse and so will be investing in a due diligence procedure that covers in far more detail that which was covered previously. The ‘try before you buy ‘ example is the most extreme version and as clear an indication of the cautionary speed MAT’s wish to proceed.

    If government want schools to convert and join an existing MAT, they are going to have to provide the incentive to the MAT. There is no evidence that the LA have any such resources. The threat to the MAT’s ‘outstanding’ Ofsted status is so counter-productive as to be absurd.

    The continual cuts to LA budgets has forced the hand of many schools and will continue to do so, but unless there is a MAT to take them on the only other solution is for those who meet the criteria, to form their own and that is arguably the greatest risk of all given their likely inexperience.

    The LA option of opting out and forming a council MAT would require large scale funding and be a volte face too far given the overall strategic aim is to remove schools from LA and the tax payer. Surely the primrosed led path they will follow is todig deep and find ways of negotiating with the MAT on a school by school case to take them on.

    This is where accurate, contemporary data is required so that the school, LA, MAT and RSC can determine a plan (Financial) from the empirical transparent evidence. However, both the former Property Data Survey Programme (Completed in 2014) and the current Condition Data Collection Programme (2017-19) share in common with the abovementioned due diligence process a superfical methodological approach, which will leave parties exposed to risks and result in recalcitrant partnerships and more orphans.

    Personally, I believe the Rubicon has been crossed and the only way forward is for government to see their project through. Until such time as they have sufficently performanced managed schools and incentivised MAT’s to a critical mass that they can extricate themselves.

  2. Ian armitage 7th March 2017

    Excellent piece ; raises issues which will have to be addressed by policy makers , trustees , governors, school leaders and local authorities alike.
    Theory and practice tells us that In any restructuring of an industry – and that is what we are facing here- the limiting factors tend to be the pool of managerial talent required to drive change and the finance to cover the transition costs . Happily there are plenty of examples where such challenges have been overcome .

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