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Analysis: How the DfE gave up public control of state-school land

The DfE may have learned from its mistakes with academy funding agreements. But it has failed to go back and correct them

An education lawyer has warned that historic academy funding agreements could lead to more problems over land.

The DfE may have learned from its mistakes with academy funding agreements. But it has failed to go back and correct them

The academies programme reached an important milestone last month: half of the children in state schools were now being educated in an academy.

The policy of giving schools independence from local authorities has always been controversial, and one of the biggest bones of contention has been land ownership – the fate of publicly funded assets when they are no longer controlled by the local authority.

It is an issue that rarely causes problems in the day-to-day running of the more than 8,000 academies open today, but it can come into sharp focus when things go wrong.

This has never been clearer than in the case of Durand Academy, a controversial South London school that last year saw its government funding terminated.

Originally, Lambeth Council owned its land and buildings. When Durand became a foundation school, these transferred to the new foundation trust. And when it then became an academy in 2010 they moved to a separate organisation, Durand Education Trust (DET).


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After the DfE ended the funding agreement, the school buildings were given back to Lambeth Council, but DET told the Commons Public Accounts Committee that it still owned some land and other assets on the school site and that its lawyers and those of the DfE were having an “ongoing discussion” about what would happen to them.

It is, to say the least, a messy situation. How could this happen, and could it happen again?

The answer centres on the legal funding agreements – between academies and the DfE – and how they have changed as the academy programme progressed.

Academies may be free from local government control, but they are far from independent of central government. Among other things, they are subject to a detailed funding agreement with the DfE, which set outs financial and accounting requirements, as well as rules on topics ranging from admissions to the curriculum.

In its early days under New Labour, the academies programme was a way of providing bespoke solutions to a small number of schools, but from 2010 it rapidly expanded. In the early years of the coalition government, the political priority was to convert as many schools as possible, as quickly as possible.

It was a programme with rules still being developed, as it was being rolled out, to deal with problems as they emerged. And one of the issues that became apparent was what happens to an academy’s land when something goes wrong if a funding agreement has ceded control.

The DfE addressed this problem in new funding agreements. Matthew Wolton, a lawyer at Knights plc, says that while modern funding agreements have pages of clauses dealing with the land, “in the old days you used to have two lines”.

“You don’t get that sort of thing arising now because the DfE has got smarter, or has been taken advantage enough that they recognise what the issues are.”

For him, a key update came in July 2011 when the DfE inserted clauses giving the education secretary an option on the land.

The current model funding agreement has eight different versions of the land clauses to deal a range of scenarios, but all of which deal with “protecting the public investment in the land used for the academy”.

So much for the new funding agreements. But while the DfE may have learned from its past mistakes, that does not mean it has gone back to put them right.

For Mr Wolton there are “massively, absolutely” legacy cases from the earlier era, which could still hold in store problems for the future.

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