Academies: The background
With over 1000 UK schools having applied to become academies since last June, Academies financial expert Michelle Wilkes of Wilkins Kennedy Chartered Accountants and Business Advisers explores the background and process of creating these new educational establishments.
Academies - background
In May 2010, the Secretary of State for Education, Michael Gove, announced legislation allowing the Secretary of State to approve schools wishing to become academies through a simplified streamlined process.
Academies are publicly funded independent local schools that provide a first class free education, providing help for pupils needing additional support along with the best opportunities for the most able pupils. They are free from both local and national government control and are able to focus their time and resources on meeting the needs of their pupils and school.
Under the Academies Act 2010, the new academies qualify for charitable status, but are exempt from registering with the Charity Commission. Instead, the academies report to a regulator called the Young People’s Learning Agency (YPLA). The academies are given more control, with the ability to set their own pay and conditions for staff, freedom around the delivery of the curriculum and the opportunity to change the lengths of terms and school days.
Figures released by the Department for Education state that during the last twelve months 647 academy applications have been approved and a third of all secondary schools are either now academies or in the process of becoming an academy. There are currently 658 academies open in the UK. 55 of these are located in the Kent region, and 20 of these are sponsored academies.
Sports Hall, St Stephen's Junior School
Converting your school to academy status
Schools considering conversion should create a steering group to consult with staff and appoint a financial adviser experienced in working with academies from the earliest opportunity, as planning the transition effectively is essential. A number of discussions will need to take place before applying and a number of changes will have to be made after a successful application, including vital changes to the accounting structure, reporting process and software.
Funding previously supplied by the LA will come in the form of a General Annual Grant (GAG) from the Young People’s Learning Agency (YPLA) and will include funding as a delegated budget share, reduced business rates paid for by an academy as a charitable trust, and money to cover central services that the LA no longer provides.
The new funding is allocated from September to August to reflect the academic year, and schools considering applying to convert before September this year will need to seek advice and act quickly in order to secure the funding allocated in August.
Academy funding options
With the closure of the Building Schools for the Future (BSF) progamme, Academies are now looking towards other capital funding options. These could include: becoming a sponsored academy, or applying for funding from a number of available sources, including the £85 million Academies Capital Maintenance Fund, created to meet urgent building condition needs which academies cannot fund themselves. The Wilkins Kennedy property and construction specialist team is available to advise on the VAT treatment of capital projects.
Wilkins Kennedy has been advising the educational sector for over 25 years and has worked with academy schools since 2002. We work together with the staff, the school’s responsible officer and the academy lead officer at the YPLA from steering group stage right through the entire process, ensuring a smooth transition to academy status and continued effective financial operation of the academy with a strategic, hands on approach.
Wilkins Kennedy's charity expertise
Academies have particular financial responsibilities as they meet the criteria for charitable status, and Wilkins Kennedy operates a specialist charities division, voted as one of the top two professional advisers in the UK for charity expertise by Charity Finance magazine in 2010. Through Wilkins Kennedy’s experience of both the educational sector and the charity sector we are able to offer specialist advice on issues such as charitable trading, VAT, risk reviews, financial accounting including accounting for restricted funds, use of trading subsidiaries, review of financial procedures and governance.
For further information about converting, external auditing, VAT and taxation or any other financial issues, please contact Michelle Wilkes at Wilkins Kennedy on: (01689) 827505 or email: email@example.com