The National Audit Office today published its report examining the conversion of maintained schools into academies.

Its recommendations include the Department for Education taking more effective action to speed up the conversion of “inadequate” schools, and understanding why some sponsors do not want to take on underperforming schools.

Here are some of the main findings from the report:

The DfE does not carry out its own checks on all academy trustees and senior leaders

The report says the DfE “does not carry out its own checks to ensure that all academy trustees and senior leaders are fit and proper persons”.

The authors say the DfE completes due diligence tests on the prospective trustees and senior leaders for all sponsors, but only for a “small sample” of schools converting without a sponsor. This is because it regards these as “lower risk”.

They warn that it risks “duplication, error or omission” because it uses a variety of documents, and multiple spreadsheets and databases to store and share information about academies. The DfE has now started a project to streamline this.

Converting schools to academies cost £745m

The report says the estimated cost of converting the nearly 7,000 academies since 2010-11 is £745 million.

The £81 million cost in 2016-17 was higher than the £63.9 million spent in 2014-15, and the £39.5 million in 2015-16. The report says these fluctuations were “broadly consistent with changes in the number of schools becoming academies”.

However, the report says the DfE does not know how much extra was spent by other bodies involved in the process, including schools, sponsors and councils.

DfE failing to hit its target of converting ‘inadequate’ schools

Since April 2016, the DfE legally has to convert maintained schools into academies if Ofsted rates them “inadequate”. It aims to do this within nine months, but the report says that “at present, two-thirds are taking more than nine months to open as academies”.

Of 153 maintained schools that were rated inadequate at April 2016, 59 per cent had not opened as academies nine months later. The average time to convert the 118 that had become academies by January 2018 was 17.9 months - almost double the target.

And of 166 maintained schools rated “inadequate” between April 2016 and March 2017, 63 per cent has not opened as academies nine months later. The average time to convert those that had opened as academies by January 2018 was 8.5 months.

The DfE told the NAO that action to improve underperforming schools can start while the conversion process is ongoing.

Feasibility of converting large numbers of schools in the future questioned

The report says most academy conversions so far have been “relatively straightforward” because they had been performing well as maintained schools, although it has taken longer than intended to convert “a sizeable proportion of underperforming schools that it considers will benefit most from academy status”.

The authors say challenges “are likely to increase in the future”, with most of the remaining maintained schools being primaries, which are sometimes small, remote and harder to integrate into MATs. They say: “It is unclear how feasible it will be for it to continue to convert large numbers of schools.”

Lots of academies are a long way from their sponsors

The report says the government wants sponsors to be close to the schools they support, but the report shows this has often not happened.

The authors found that 242 sponsored academies (12 per cent) are more than 50 miles from their sponsor. The picture varies across the country: in the West Midlands, 19 per cent of sponsored academies are more than 50 miles away, compared to 5 per cent in the North West and London and South Central England.

There is a shortage of sponsors for new academies

The report says: “There appears to be a shortage of sponsors and multi-academy trusts with the capacity to support new academies”.

Of the current 1,101 approved academy sponsors, 95 have asked not to take on more schools because they lacked capacity. The DfE had paused the growth of a further 12 sponsors because of educational, financial or governance concerns.

Finding sponsors for small primary schools is particularly hard

The report says the DfE struggles for find sponsors for schools with falling rolls, or problems recruiting and retaining teachers.

The problem is most acute for small primaries: “Low pupil numbers may threaten their financial viability and the geographical isolation of rural schools can make it difficult for a sponsor to provide support”.

Difference between primary and secondary academisation rates causes difficulties for councils

In most local authority areas, councils have responsibility for most primary schools and specialist education, but few secondaries.

The report warns: “This makes it more difficult for them to take an integrated whole-system approach to their children’s education.”

Wide variation in proportion of academised schools

The proportion of schools that are academies varies enormously depending on the local authority area, ranging from 93 per cent in Bromley to 6 per cent in Lancashire, Lewisham and North Tyneside.

DfE originally prioritised quantity over quality…

The report says that “in designing and implementing the conversion process, the department has focused on supporting large numbers of schools to convert, rather than allowing only the strongest applications to proceed”.

Up to January 2018, only 0.6 per cent of applications to become academies without sponsors were rejected.

The report says that during the three years up to August 2017, 1,964 applications were approved, 196 deferred, and just 13 rejected. 183 applications were withdrawn before they a decision was made.

…but now it has strengthened the conversion process

The report says the DfE has improved its scrutiny of applicants’ financial health, strengthened the standards of governance it expects from academy trusts. The report says the design of its assessment of prospective sponsors “appears rigorous”.

Councils left with £7.8m of deficits from schools that became academies

Local authorities retain the deficits of maintained schools that become sponsored academies. The report estimates that this cost councils £7.8 million in 2016-17.

No evaluation of grants to boost sponsor capacity

Since 2012-13, the DfE has given academy sponsors grants to improve their capacity to take on more schools. However, the report says they “have not seen evidence that it has evaluated the impact of this funding”.

It does note that the DfE started a research project last December to evaluate its Regional Academy Growth Fund, which was paid out in 2016-17.

‘Good’ and ‘outstanding’ schools given money earmarked for the most challenging schools

The DfE gives schools and academy trusts grants when schools convert. Schools deemed the most challenging to improve, known as “full sponsored” academies, attract extra funding, worth up to £80,200.

The report reveals that between September 2010 and August 2017, 66 “good” or “outstanding” schools were classed as “full sponsored”, meaning the DfE gave their sponsor the maximum tier of funding.

261 multi-academy trusts only have one school

The DfE now only approves single-academy trusts “in exceptional circumstances”, but has allowed some multi-academy trusts to open with just one school, “conditional on the trust committing to taking on additional schools after opening”.

However, of these, 150 have been operating for three or more years. The report warns: “There is a risk that these trusts will not be realising the benefits of being a multi-academy trust that were intended when they were created.”

Liabilities that academy trusts take on can be “unknown”

The report says the government leaves the responsibility for identifying and assessing the financial risk of liabilities they are taking on to MATs and schools and has only given them “limited guidance” on what these checks should be.

It warns that the DfE “does not always know the extent” of these potential liabilities.

Five recommendations:

• Now it no longer expects all schools to become academies, the DfE should articulate its vision for the school system.
• The DfE should reinforce and consistently apply tests of financial risk and due diligence to all academies and trustees, building on those used for prospective sponsors.
• The DfE and the Education and Skills Funding Agency should improve how they share knowledge and expertise.
• The DfE should take more effective action to speed up the process of converting inadequate schools.
• The DfE should improve its understanding of the factors limiting academy sponsors’ capacity to expand, or discouraging new sponsors from taking on underperforming schools.