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News - 8 December 2014

Councils say academy conversion bill unfair

 The Local Government Association (LGA) has said that they have had to meet at least £22m in legal bills and budget deficits in costs for schools that have converted to academy status since 2011.

 
The LGA says it is "simply not fair" for councils to have to subsidise this "flagship" government policy. 
 
The figure of £22m is based on a snapshot survey of finance directors of 150 local education authorities in England. 
 
Liz Kennett, Audit and Accounts Manager of ABDS, and a Schools and Charities specialist comments:
“Councils may be required to pay some of the legal costs of transferring schools out of local authority control. These can include land and legal charges and the costs of external legal advisers and consultants - but not the costs of internal staff time. On top of this, if a school becomes a sponsored academy, any outstanding budget deficits are left with the local authority that controlled it before it converted.”
 
New academies are allowed to keep any budget surpluses rather than handing the money back to the council. 
 
The LGA says it is unfair that council tax payers should have to subsidise policies imposed by central government when councils are struggling with budget cuts of 40%.
 
Nick Weller, chairman of the Independent Academies Association, said perhaps councils should be able to recoup the legal costs of academy conversion from the Department for Education. 
He said operating with a deficit was often a sign of a badly run school. 
"If local authorities ran their schools better in the first place there wouldn't be any deficits." 
 
A Department for Education spokeswoman said: "Academies are a vital part of our plan for education and transforming the education of millions of pupils across the country.
 
"The LGA is wrong. Local authorities are only required to cover a school's deficit costs if it has become a sponsored academy after a prolonged period of underperformance.”
 
 
If you need any help and advice with Free Schools, Academy Schools or Charities, contact Lavinia Newman, Peter Ham or Liz Kennett now to discuss how ABDS can help bring their experience to these matters.
 
ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900 E-mail: abds@netaccountants.net
 
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Great with people  
Clear and precise with advice
Timely and cost effective
In touch with issues that face our clients and 
mindful of their long term strategic goals
 
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