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Workshop M1
Managing an effective due diligence process
The education law conference 2016
#BJEDC16
Heads of Terms?
Timescales
Final accounting processes – eg how to
deal with trust-wide capital receipts,
reserves, cash, creditors & liabilities
Approach to due diligence, warranties &
indemnities
Practical issues to consider (1)
Disclosure of information
TUPE – need to take measures?
Trust winding-up?
• Liabilities
• MAT academies going to 2 or more MATS = added complexities
• Accounts to EFA
• Striking-off/voluntary winding-up
100 day plan?
Practical issues to consider (2)
Managing risk: the due diligence process
Two key purposes:
• primary purpose is to obtain sufficient information about the
organisation joining the MAT in order to decide whether the
transfer should go ahead
• where appropriate, any information revealed can be used to
provide a better negotiating position in respect of the terms of the
transfer
Timescales to undertake the due diligence and produce a report will
be increasingly tight but very important that a certain level of due
diligence is always carried out
Organised, planned process critical
Process of due diligence
A multi-disciplinary team
Robust and rigorous process
But a sensitive exercise as the due diligence work
required engaging with the school’s staff and governors in
order to obtain the necessary information and make the
judgements required while at the same time allaying any
concerns about the implications of becoming a part of the
MAT or a sponsored academy.
Key due diligence tests
• Financial
• Organisational
• Performance Data
• Legal
• Commercial
Financial due diligence
As a minimum due diligence would normally involve obtaining a full
understanding of:
Also assess the finance capability at joining school
Advisable to commission an independent audit of finance and risk
• 3-5 year budget plans • Last 18 months CFR submissions
• Audit reports • Insurance claims in last three years
• Cashflows • Carry forward/deficit
• Loans • Devolved capital balance
• Finance Agreements • School funds
• Last three years set of accounts
Organisational due diligence (1)
A full report on the implications of the HR and staffing issues,
in particular in terms of the TUPE arrangements that would
apply to include:
• list of employees and T & C’s
• staffing structure including summary biographies of SLT
• any ongoing/unresolved staffing issues, employees
undergoing capability procedures, compromise agreements
• pay policy including any safeguarded pay issues
• single status implementation
• pension actuary figure
• curriculum model and staffing ratios
Organisational due diligence (2)
• Be aware that in employment terms formal paper based
due diligence has limitations
• Look at practice and effectiveness, not just data and
statistics
• What are the ‘people’ implications of what the finance
due diligence is telling you? – does the curriculum need
to change, class sizes need to be bigger, is the staffing
structure fit for purpose, what cultural issues are there
• Advisable to have specialist HR advice
Organisational due diligence (3)
HR checklist
1. Consider whether ‘measures’ are needed as part of TUPE to allow you to
align policies or practice post transfer?
2. Do you understand processes, T & Cs and systems in all the schools before
they join?
3. If different T & C’s and even pay scales for support staff, what is the plan
to harmonise?
4. Do you have one HR provider across the group to secure consistency and
minimise risk? Is this one of the non-negotiables when a school joins?
5. Do your legal team negotiate indemnities where possible? You will need to
identify issues for this to happen?
6. Particularly if in year deficit, does the LA or current employer need to
restructure or exit any staff before transfer?
Organisational due diligence (4)
Quality of Governance
• Can chair adapt to role on LGB and be interface with
Directors.
• How will scheme of delegation be applied to this new
joiner?
• What level of central support will the LGB require and
how will this be reflected in top slice?
Performance due diligence
External data is accessible but advisable to familiarise
yourself with the extent of the education challenges the
school or academy currently faces to raise standards and
accelerate improvement by reviewing the school’s own
data.
Will help you assess the MATs capacity to support the
school and how this particular school fits into the
portfolio of schools in your MAT
Legal due diligence (1)
Important to ensure that all assets and contracts
including the title to the school land are
effectively transferred to the MAT
Also to understand any liabilities which may be
associated with these assets so that MAT can
manage any risks identified with aim to reduce
liabilities before transfer
Legal due diligence (2)
As third parties without any prior knowledge of a particular school site, a MAT
may want to carry out the kind of due diligence that a commercial enterprise
would normally carry out when considering acquiring an interest in land
Enables MAT to bring the new school on board with its ‘eyes open’ to the
matters and issues affecting the site
• Title investigation
• Searches – local search, highways search, environmental desktop search,
flood risk search, chancel repair search, water and drainage search
• Standard enquiries of landowner
If the site is one where development is contemplated, additionally advisable
to carry out utilities searches so can understand how presence of gas, water,
electricity, telecommunications might impact upon development plans
Commercial diligence
Review contracts and identify opportunities for economies
of scale
e.g. Leases, SLAs, licences, services to other organisations,
payroll provider, IT provider, HR provider, utilities
provider, legal services provider
To include understanding all arrangements currently
implemented by the LA on behalf of the GB
Also important to understand any additional contracts
which will need to be entered into in order to continue to
properly operate based on growth in MAT (e.g. upgraded
finance system)
Due diligence report
Draw together multi disciplinary findings into a single
coherent report of findings and recommendations to
inform the board in their final decision about whether to
proceed
Important to consider the findings in context of the MAT’s
growth strategy and vision
Ensure there is an effective feedback loop so that
constantly refining and rebalancing approach to due
diligence to meet MATs needs
Top tips
• Planning is key
• Start as you mean to go on
• Bring together in one coherent report and test
against your strategy
• Tailor to circumstances
• Learn the lessons
www.education-advisors.com
Talk to us…
Please note
The information contained in these notes is based on the position at
February 2016. It does, of course, only represent a summary of the
subject matter covered and is not intended to be a substitute for
detailed advice. If you would like to discuss any of the matters
covered in further detail, our team would be happy to do so.
© Browne Jacobson LLP 2016. Browne Jacobson LLP is a limited
liability partnership.
Mark Blois | +44 (0)115 976 6087
mark.blois@brownejacobson.com
Nick MacKenzie | +44 (0)121 237 4564
nick.mackenzie@brownejacobson.com
Workshop M2
Managing academy transfers between trusts
The education law conference 2016
#BJEDC16
What is an academy transfer? Different types
• Single academy transferring to a MAT
• Whole MATs transferring to another MAT
• A struggling academy within a MAT transferring to
another MAT
• A struggling single academy transferring to a sponsor
MAT
• A MAT group dividing into separate MATs
Why does an academy transfer take place?
• A breakdown in the shared vision/cultural fit
• A need for sustainability
• Benefits of collaboration through shared
governance
• Poor performance
• A new direction
“quote here quote here quote here
quote here quote here quote here
quote here quote here quote here
Who brings an academy transfer about?
• RSC – in the South West approximately 60% of his time is
spent monitoring the performance of existing academies
“ We do not tolerate failure and the strength of the
academies programme is that it allows us to intervene
swiftly, including replacing sponsors where it is in the
best interests of the School. We will not apologise for
taking decisive action where needed”
DfE Spokesperson
Who brings an academy transfer about?
• RSCs looking to broker relationships and plan
for each region’s development and its needs
• Academies themselves; where a mismatch is
recognised
• Academies themselves; where they recognise a
strategic imperative
What does it cost to make an academy transfer?
• As at February 2016, the range of re-brokering
costs for struggling schools is £0 - £534,000
• The average cost of 23 re-brokered schools was
£131,000
• The monies are payable for additional school
improvement, CPD, business management
support, deficit funding, building maintenance
How many academy transfers are taking place?
• Up to August 2015 Department for Education
has ordered 104 re-broker transactions
• This doesn’t include the ‘academy converter’
transfers
• Increasing numbers due to the growth of MATs
If you are thinking of moving…
Significant change procedure
• Affects all existing academies
• Requires consent of Regional School
Commissioner through Head Teacher’s Board
• Each application considered on a case by case
basis
• Unlikely to approve cross MATs transfer to
transfer without good reason
Intervention
Where the Regional School Commission has
concerns, range of actions including:
• Pre-warning notice letter to the directors
• Warning notice letter additional director
working with strong
MAT
Re-brokerage
As a single academy transferring to a MAT
• Corporate and funding elements only
• Land, commercial and employment
matters are unchanged
Existing academies converting to a MAT
• consultation
• business case
• amending Articles of Association
• changes to composition of members and trustees
• deed of variation
• master and supplemental funding agreements
• identifying and investigating potential partner schools
• bank accounts
• finance software
Significant
change
Governance
Funding
Agreement
Due
diligence
Infrastructure
Who joins who?
• Identify the academy with the most
complicated issues (land,
commercial contracts etc.)
• Use the most complicated trust as
the MAT and transfer other trusts
into it
As a single academy transferring to a sponsor MAT
Corporate
• Governance transfers to the new MAT
• The transferring academy trust remains in existence for
approximately six months (with three members and
three directors) to ensure any residual matters can be
picked up and not lost – and is then closed down
• The ‘old’ governors may form part of the new MAT
governance (Board or LGB)
As a single academy transferring to a sponsor MAT
Employment
• Staff are TUPE’d across to the new MAT.
Considerations are whether there are any measures,
consultation required etc. – same process as original
conversion
As a single academy transferring to a sponsor MAT
Property
• Prior to the dissolving of the existing academy trust
property will need to be transferred to the new MAT.
This constitutes a ‘disposal’ under Schedule 1 of the
Academies Act 2010 and the Funding Agreement and
therefore requires consent to dispose of publicly
funded land. Consent is obtained either through the
consent to the change in status or through a separate
Form A via the EFA.
As a single academy transferring to a sponsor MAT
Property
• Freehold property is transferred by a Deed
• Leasehold land is transferred as an assignment. A
Licence to Assign is needed from the current landlord.
• Any 3rd party leases will need to be assigned as well.
As a single academy transferring to a sponsor MAT
Commercial
• All the commercial assets of the transferring academy
will need to be transferred to the new MAT. A
Commercial Transfer Agreement is required which will
set out any assets that are being disposed of together
with any warranties or indemnities that are appropriate
The outgoing directors may not wish to give any residual
warranties or indemnities as the company will cease to
exist in due course. Indemnities would be worthless to the
new MAT.
As a single academy transferring to a sponsor MAT
Funding
• The existing Funding Agreement will need to be varied
to become a Supplemental Funding Agreement and it
will need to be novated to the new MAT. The MAT will
hold a Master Funding Agreement which replaces the
existing Funding Agreement
As a whole MAT transferring to another MAT
Corporate
• The whole governing body will cease to exist and the
company will dissolve. There is no need to maintain the
company unless you want to use it as a subsidiary for
some other purpose
As a whole MAT transferring to another MAT
Employment
• Staff are TUPE’d from existing trust to the new MAT
Property
• As before, consent required and disposals take place
for each school
CTA
• As before, for each school
Funding
• As before, for each school
As a struggling academy within a MAT
Corporate
• The existing corporate entity will continue to exist. If
existing governors are going to join the new board,
they will resign from the existing one (unless they don’t
want to) and (if appropriate) join the new one on the
board or the LGB
Employment
• Staff are TUPE’d from existing trust to MAT
Property
• As before
As a struggling academy within a MAT
CTA
• As before, but the negotiations between the existing AT
and the new AT may be more ‘commercial’ depending
on what has been found through due diligence. The
existing MAT will want to divest liabilities and risks.
The new MAT will want to limit the liabilities and risks
it takes on. Where a school is struggling this is more
likely to be the possible scenario
Funding
• As before
As a dividing group
If the consent of the RSC is obtained then
Corporate
• New MAT will need to be established for those
transferring
Funding
• New Master Funding Agreement and probably new (as
opposed to novated) Supplemental Funding Agreements
required
As a dividing group
Employment
• TUPE of staff into new entity
Property
• Transfers and assignments required
CTA
• Negotiations comparable to the struggling academy
within a MAT
Church school transfers
• Need to liaise early with the Diocese re
governance arrangements and get agreement
• Church Supplemental Agreements will need to
be novated to the new MAT
Liabilities of outgoing Directors
• Directors need to make sure they have carefully
considered what liabilities if any will remain
with the trust. This will include considering the
extent of any warranties and indemnities that
are to be provided on transfer.
• Insurance on an annual basis can be obtained
from some insurers for claims post dissolution.
Any Questions?/Discussion
www.education-advisors.com
Talk to us…
Please note
The information contained in these notes is based on the position at
February 2016. It does, of course, only represent a summary of the
subject matter covered and is not intended to be a substitute for
detailed advice. If you would like to discuss any of the matters
covered in further detail, our team would be happy to do so.
© Browne Jacobson LLP 2016. Browne Jacobson LLP is a limited
liability partnership.
Julia Green | +44 (0)1392 45 8727
julia.green@brownejacobson.com
Jamie Otter | +44 (0)161 300 8038
jamie.otter@brownejacobson.com
Nick MacKenzie | +44 (0)121 237 4564
nick.mackenzie@brownejacobson.com
Workshop M3
Making the most of your MAT
The education law conference 2016
#BJEDC16
Governance and decision making
Lessons learnt from Ofsted focussed
inspections
Managing risk
Session overview
Academy
1
multi-academy trusts
LGB
School
Level
Board of Directors
Trust
level
Members
Academy
2
Academy
3
Academy
4
LGBLGBLGB
Members – appoint
& remove directors
Board of Directors –
approve accounts,
MFA, employ staff,
hold land & overall
responsibility
Academy - SFA,
oversight of
educational
standards at local
level
Approach to delegation
Main Board
Strategic oversight, setting
visions and policies for the
trust, governance,
contractual relationships
with third parties
LGB
Day to day running of the
academy, carrying out the
trust’s vision, policies and
priorities, holding academy
leadership to account
delegation
linked to
OFSTED
hybrid
approach
full delegation
for all
or systematic delegation?
delegation
linked to
OFSTED
full delegation
for all
Approaching committees in a MAT?
Delegation
• same delegation
between LGB’s/academy
councils?
• restrict sub-committees?
• shared committees?
• meeting protocols?
Clerk & Process
• common clerk?
• governance manager?
• common format for
paperwork?
• frequency of meetings?
Linking board to local boards …
people
• segregation of
people
• right people right
place
• link governors
• management team
documents
• scheme of delegation
• expectations &
entitlements
• codes of conduct
process
• reporting
• meeting timetabling
• review of
effectiveness
links
Leadership models – Exec Head, pure model
Executive
Head/
Principal
Head of School
School A
Head of School
School B
Head of School
School C
Leadership models – Exec head, mixed model
Executive
Head/
Principal
Headteacher
School A
Headteacher
School B
Headteacher
School C
Leadership models – CEO model
CEO
Headteacher
School A
Headteacher
School B
Headteacher
School C
Headteacher
School D
Headteacher
School E
Accountability
Accountability of the executive
16. How well does the Trustee Board understand its academies’
performance data, & how do Trustees know that pupils in all their
academies are making the best progress they can?
17. What mechanisms does the Trustee Board use to ensure there is a
strong and effective executive leadership structure and personnel in
place across the Trust with the right skills, clear line-management
and reporting mechanisms?
20. Do the compliance systems give assurance to the Trustee Board that
the Trust is meeting its statutory and legal responsibilities?
Taken from 21 key questions for MATs document available from the NGA & APPG on Education Governance
and Leadership
How do we…
Approach delegation from the board to the
local GBs and effectively link their work? How
does this interact with the executive team?
Legal basis
Process
Key areas of focus
Ofsted focussed inspections
Key areas of focus
• what progress have the MATs academies made?
• the achievement of pupils (particularly
disadvantaged pupils)
• how does the MAT collect and review data about its
academies’ performance?
• how does the MAT review the performance of its
academies at an academy by academy level?
Key areas of focus (cont’d)
• how does the MAT use the information it collects to deploy
resources, support and training across the MAT?
• the effectiveness of the MATs leadership model and its
leaders?
• the effectiveness of the MATs model of governance and its
link to securing progress and achievement?
• how realistic the leadership’s assessment of the MAT’s
current position is (strengths & weaknesses) and how well
this informs the MAT’s strategic plan?
How do we…
Manage risk across the
MAT?
Risk register – how many & ownership?
Finance - Audit & Risk Committee
Education - ?
Approach to risk – avoid, mitigate & target risk
Managing risk
Single employer as a MAT
Inconsistency – no. 1 risk
Equal pay
Discrimination
Lack of clarity on delegation means confusion and
either indecision or bad decisions
T&Cs – harmonise or not?
Specific risks - employment
www.education-advisors.com
Talk to us…
Name | +44 (0)
name.name@brownejacobson.com
Please note
The information contained in these notes is based on the position at
February 2016. It does, of course, only represent a summary of the
subject matter covered and is not intended to be a substitute for
detailed advice. If you would like to discuss any of the matters
covered in further detail, our team would be happy to do so.
© Browne Jacobson LLP 2016. Browne Jacobson LLP is a limited
liability partnership.
Julia Green | +44 (0)1392 45 8727
julia.green@brownejacobson.com
Jamie Otter | +44 (0)161 300 8038
jamie.otter@brownejacobson.com
Adrian Shardlow | +44 (0)115 976 6091
adrian.shardlow@brownejacobson.com
Nick MacKenzie | +44 (0)121 237 4564
nick.mackenzie@brownejacobson.com

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Browne Jacobson - Education Law Conference 2016 - Workshop stream 1, Efficient and effective MATs

  • 1. Workshop M1 Managing an effective due diligence process The education law conference 2016 #BJEDC16
  • 2. Heads of Terms? Timescales Final accounting processes – eg how to deal with trust-wide capital receipts, reserves, cash, creditors & liabilities Approach to due diligence, warranties & indemnities Practical issues to consider (1)
  • 3. Disclosure of information TUPE – need to take measures? Trust winding-up? • Liabilities • MAT academies going to 2 or more MATS = added complexities • Accounts to EFA • Striking-off/voluntary winding-up 100 day plan? Practical issues to consider (2)
  • 4. Managing risk: the due diligence process Two key purposes: • primary purpose is to obtain sufficient information about the organisation joining the MAT in order to decide whether the transfer should go ahead • where appropriate, any information revealed can be used to provide a better negotiating position in respect of the terms of the transfer Timescales to undertake the due diligence and produce a report will be increasingly tight but very important that a certain level of due diligence is always carried out Organised, planned process critical
  • 5. Process of due diligence A multi-disciplinary team Robust and rigorous process But a sensitive exercise as the due diligence work required engaging with the school’s staff and governors in order to obtain the necessary information and make the judgements required while at the same time allaying any concerns about the implications of becoming a part of the MAT or a sponsored academy.
  • 6. Key due diligence tests • Financial • Organisational • Performance Data • Legal • Commercial
  • 7. Financial due diligence As a minimum due diligence would normally involve obtaining a full understanding of: Also assess the finance capability at joining school Advisable to commission an independent audit of finance and risk • 3-5 year budget plans • Last 18 months CFR submissions • Audit reports • Insurance claims in last three years • Cashflows • Carry forward/deficit • Loans • Devolved capital balance • Finance Agreements • School funds • Last three years set of accounts
  • 8. Organisational due diligence (1) A full report on the implications of the HR and staffing issues, in particular in terms of the TUPE arrangements that would apply to include: • list of employees and T & C’s • staffing structure including summary biographies of SLT • any ongoing/unresolved staffing issues, employees undergoing capability procedures, compromise agreements • pay policy including any safeguarded pay issues • single status implementation • pension actuary figure • curriculum model and staffing ratios
  • 9. Organisational due diligence (2) • Be aware that in employment terms formal paper based due diligence has limitations • Look at practice and effectiveness, not just data and statistics • What are the ‘people’ implications of what the finance due diligence is telling you? – does the curriculum need to change, class sizes need to be bigger, is the staffing structure fit for purpose, what cultural issues are there • Advisable to have specialist HR advice
  • 10. Organisational due diligence (3) HR checklist 1. Consider whether ‘measures’ are needed as part of TUPE to allow you to align policies or practice post transfer? 2. Do you understand processes, T & Cs and systems in all the schools before they join? 3. If different T & C’s and even pay scales for support staff, what is the plan to harmonise? 4. Do you have one HR provider across the group to secure consistency and minimise risk? Is this one of the non-negotiables when a school joins? 5. Do your legal team negotiate indemnities where possible? You will need to identify issues for this to happen? 6. Particularly if in year deficit, does the LA or current employer need to restructure or exit any staff before transfer?
  • 11. Organisational due diligence (4) Quality of Governance • Can chair adapt to role on LGB and be interface with Directors. • How will scheme of delegation be applied to this new joiner? • What level of central support will the LGB require and how will this be reflected in top slice?
  • 12. Performance due diligence External data is accessible but advisable to familiarise yourself with the extent of the education challenges the school or academy currently faces to raise standards and accelerate improvement by reviewing the school’s own data. Will help you assess the MATs capacity to support the school and how this particular school fits into the portfolio of schools in your MAT
  • 13. Legal due diligence (1) Important to ensure that all assets and contracts including the title to the school land are effectively transferred to the MAT Also to understand any liabilities which may be associated with these assets so that MAT can manage any risks identified with aim to reduce liabilities before transfer
  • 14. Legal due diligence (2) As third parties without any prior knowledge of a particular school site, a MAT may want to carry out the kind of due diligence that a commercial enterprise would normally carry out when considering acquiring an interest in land Enables MAT to bring the new school on board with its ‘eyes open’ to the matters and issues affecting the site • Title investigation • Searches – local search, highways search, environmental desktop search, flood risk search, chancel repair search, water and drainage search • Standard enquiries of landowner If the site is one where development is contemplated, additionally advisable to carry out utilities searches so can understand how presence of gas, water, electricity, telecommunications might impact upon development plans
  • 15. Commercial diligence Review contracts and identify opportunities for economies of scale e.g. Leases, SLAs, licences, services to other organisations, payroll provider, IT provider, HR provider, utilities provider, legal services provider To include understanding all arrangements currently implemented by the LA on behalf of the GB Also important to understand any additional contracts which will need to be entered into in order to continue to properly operate based on growth in MAT (e.g. upgraded finance system)
  • 16. Due diligence report Draw together multi disciplinary findings into a single coherent report of findings and recommendations to inform the board in their final decision about whether to proceed Important to consider the findings in context of the MAT’s growth strategy and vision Ensure there is an effective feedback loop so that constantly refining and rebalancing approach to due diligence to meet MATs needs
  • 17. Top tips • Planning is key • Start as you mean to go on • Bring together in one coherent report and test against your strategy • Tailor to circumstances • Learn the lessons
  • 19. Talk to us… Please note The information contained in these notes is based on the position at February 2016. It does, of course, only represent a summary of the subject matter covered and is not intended to be a substitute for detailed advice. If you would like to discuss any of the matters covered in further detail, our team would be happy to do so. © Browne Jacobson LLP 2016. Browne Jacobson LLP is a limited liability partnership.
  • 20. Mark Blois | +44 (0)115 976 6087 mark.blois@brownejacobson.com Nick MacKenzie | +44 (0)121 237 4564 nick.mackenzie@brownejacobson.com
  • 21. Workshop M2 Managing academy transfers between trusts The education law conference 2016 #BJEDC16
  • 22. What is an academy transfer? Different types • Single academy transferring to a MAT • Whole MATs transferring to another MAT • A struggling academy within a MAT transferring to another MAT • A struggling single academy transferring to a sponsor MAT • A MAT group dividing into separate MATs
  • 23. Why does an academy transfer take place? • A breakdown in the shared vision/cultural fit • A need for sustainability • Benefits of collaboration through shared governance • Poor performance • A new direction “quote here quote here quote here quote here quote here quote here quote here quote here quote here
  • 24. Who brings an academy transfer about? • RSC – in the South West approximately 60% of his time is spent monitoring the performance of existing academies “ We do not tolerate failure and the strength of the academies programme is that it allows us to intervene swiftly, including replacing sponsors where it is in the best interests of the School. We will not apologise for taking decisive action where needed” DfE Spokesperson
  • 25. Who brings an academy transfer about? • RSCs looking to broker relationships and plan for each region’s development and its needs • Academies themselves; where a mismatch is recognised • Academies themselves; where they recognise a strategic imperative
  • 26. What does it cost to make an academy transfer? • As at February 2016, the range of re-brokering costs for struggling schools is £0 - £534,000 • The average cost of 23 re-brokered schools was £131,000 • The monies are payable for additional school improvement, CPD, business management support, deficit funding, building maintenance
  • 27. How many academy transfers are taking place? • Up to August 2015 Department for Education has ordered 104 re-broker transactions • This doesn’t include the ‘academy converter’ transfers • Increasing numbers due to the growth of MATs
  • 28. If you are thinking of moving…
  • 29. Significant change procedure • Affects all existing academies • Requires consent of Regional School Commissioner through Head Teacher’s Board • Each application considered on a case by case basis • Unlikely to approve cross MATs transfer to transfer without good reason
  • 30. Intervention Where the Regional School Commission has concerns, range of actions including: • Pre-warning notice letter to the directors • Warning notice letter additional director working with strong MAT Re-brokerage
  • 31. As a single academy transferring to a MAT • Corporate and funding elements only • Land, commercial and employment matters are unchanged
  • 32. Existing academies converting to a MAT • consultation • business case • amending Articles of Association • changes to composition of members and trustees • deed of variation • master and supplemental funding agreements • identifying and investigating potential partner schools • bank accounts • finance software Significant change Governance Funding Agreement Due diligence Infrastructure
  • 33. Who joins who? • Identify the academy with the most complicated issues (land, commercial contracts etc.) • Use the most complicated trust as the MAT and transfer other trusts into it
  • 34. As a single academy transferring to a sponsor MAT Corporate • Governance transfers to the new MAT • The transferring academy trust remains in existence for approximately six months (with three members and three directors) to ensure any residual matters can be picked up and not lost – and is then closed down • The ‘old’ governors may form part of the new MAT governance (Board or LGB)
  • 35. As a single academy transferring to a sponsor MAT Employment • Staff are TUPE’d across to the new MAT. Considerations are whether there are any measures, consultation required etc. – same process as original conversion
  • 36. As a single academy transferring to a sponsor MAT Property • Prior to the dissolving of the existing academy trust property will need to be transferred to the new MAT. This constitutes a ‘disposal’ under Schedule 1 of the Academies Act 2010 and the Funding Agreement and therefore requires consent to dispose of publicly funded land. Consent is obtained either through the consent to the change in status or through a separate Form A via the EFA.
  • 37. As a single academy transferring to a sponsor MAT Property • Freehold property is transferred by a Deed • Leasehold land is transferred as an assignment. A Licence to Assign is needed from the current landlord. • Any 3rd party leases will need to be assigned as well.
  • 38. As a single academy transferring to a sponsor MAT Commercial • All the commercial assets of the transferring academy will need to be transferred to the new MAT. A Commercial Transfer Agreement is required which will set out any assets that are being disposed of together with any warranties or indemnities that are appropriate The outgoing directors may not wish to give any residual warranties or indemnities as the company will cease to exist in due course. Indemnities would be worthless to the new MAT.
  • 39. As a single academy transferring to a sponsor MAT Funding • The existing Funding Agreement will need to be varied to become a Supplemental Funding Agreement and it will need to be novated to the new MAT. The MAT will hold a Master Funding Agreement which replaces the existing Funding Agreement
  • 40. As a whole MAT transferring to another MAT Corporate • The whole governing body will cease to exist and the company will dissolve. There is no need to maintain the company unless you want to use it as a subsidiary for some other purpose
  • 41. As a whole MAT transferring to another MAT Employment • Staff are TUPE’d from existing trust to the new MAT Property • As before, consent required and disposals take place for each school CTA • As before, for each school Funding • As before, for each school
  • 42. As a struggling academy within a MAT Corporate • The existing corporate entity will continue to exist. If existing governors are going to join the new board, they will resign from the existing one (unless they don’t want to) and (if appropriate) join the new one on the board or the LGB Employment • Staff are TUPE’d from existing trust to MAT Property • As before
  • 43. As a struggling academy within a MAT CTA • As before, but the negotiations between the existing AT and the new AT may be more ‘commercial’ depending on what has been found through due diligence. The existing MAT will want to divest liabilities and risks. The new MAT will want to limit the liabilities and risks it takes on. Where a school is struggling this is more likely to be the possible scenario Funding • As before
  • 44. As a dividing group If the consent of the RSC is obtained then Corporate • New MAT will need to be established for those transferring Funding • New Master Funding Agreement and probably new (as opposed to novated) Supplemental Funding Agreements required
  • 45. As a dividing group Employment • TUPE of staff into new entity Property • Transfers and assignments required CTA • Negotiations comparable to the struggling academy within a MAT
  • 46. Church school transfers • Need to liaise early with the Diocese re governance arrangements and get agreement • Church Supplemental Agreements will need to be novated to the new MAT
  • 47. Liabilities of outgoing Directors • Directors need to make sure they have carefully considered what liabilities if any will remain with the trust. This will include considering the extent of any warranties and indemnities that are to be provided on transfer. • Insurance on an annual basis can be obtained from some insurers for claims post dissolution.
  • 50. Talk to us… Please note The information contained in these notes is based on the position at February 2016. It does, of course, only represent a summary of the subject matter covered and is not intended to be a substitute for detailed advice. If you would like to discuss any of the matters covered in further detail, our team would be happy to do so. © Browne Jacobson LLP 2016. Browne Jacobson LLP is a limited liability partnership.
  • 51. Julia Green | +44 (0)1392 45 8727 julia.green@brownejacobson.com Jamie Otter | +44 (0)161 300 8038 jamie.otter@brownejacobson.com Nick MacKenzie | +44 (0)121 237 4564 nick.mackenzie@brownejacobson.com
  • 52. Workshop M3 Making the most of your MAT The education law conference 2016 #BJEDC16
  • 53. Governance and decision making Lessons learnt from Ofsted focussed inspections Managing risk Session overview
  • 54. Academy 1 multi-academy trusts LGB School Level Board of Directors Trust level Members Academy 2 Academy 3 Academy 4 LGBLGBLGB Members – appoint & remove directors Board of Directors – approve accounts, MFA, employ staff, hold land & overall responsibility Academy - SFA, oversight of educational standards at local level
  • 55. Approach to delegation Main Board Strategic oversight, setting visions and policies for the trust, governance, contractual relationships with third parties LGB Day to day running of the academy, carrying out the trust’s vision, policies and priorities, holding academy leadership to account
  • 56. delegation linked to OFSTED hybrid approach full delegation for all or systematic delegation? delegation linked to OFSTED full delegation for all
  • 57. Approaching committees in a MAT? Delegation • same delegation between LGB’s/academy councils? • restrict sub-committees? • shared committees? • meeting protocols? Clerk & Process • common clerk? • governance manager? • common format for paperwork? • frequency of meetings?
  • 58. Linking board to local boards … people • segregation of people • right people right place • link governors • management team documents • scheme of delegation • expectations & entitlements • codes of conduct process • reporting • meeting timetabling • review of effectiveness links
  • 59. Leadership models – Exec Head, pure model Executive Head/ Principal Head of School School A Head of School School B Head of School School C
  • 60. Leadership models – Exec head, mixed model Executive Head/ Principal Headteacher School A Headteacher School B Headteacher School C
  • 61. Leadership models – CEO model CEO Headteacher School A Headteacher School B Headteacher School C Headteacher School D Headteacher School E
  • 62. Accountability Accountability of the executive 16. How well does the Trustee Board understand its academies’ performance data, & how do Trustees know that pupils in all their academies are making the best progress they can? 17. What mechanisms does the Trustee Board use to ensure there is a strong and effective executive leadership structure and personnel in place across the Trust with the right skills, clear line-management and reporting mechanisms? 20. Do the compliance systems give assurance to the Trustee Board that the Trust is meeting its statutory and legal responsibilities? Taken from 21 key questions for MATs document available from the NGA & APPG on Education Governance and Leadership
  • 63. How do we… Approach delegation from the board to the local GBs and effectively link their work? How does this interact with the executive team?
  • 64. Legal basis Process Key areas of focus Ofsted focussed inspections
  • 65. Key areas of focus • what progress have the MATs academies made? • the achievement of pupils (particularly disadvantaged pupils) • how does the MAT collect and review data about its academies’ performance? • how does the MAT review the performance of its academies at an academy by academy level?
  • 66. Key areas of focus (cont’d) • how does the MAT use the information it collects to deploy resources, support and training across the MAT? • the effectiveness of the MATs leadership model and its leaders? • the effectiveness of the MATs model of governance and its link to securing progress and achievement? • how realistic the leadership’s assessment of the MAT’s current position is (strengths & weaknesses) and how well this informs the MAT’s strategic plan?
  • 67. How do we… Manage risk across the MAT?
  • 68. Risk register – how many & ownership? Finance - Audit & Risk Committee Education - ? Approach to risk – avoid, mitigate & target risk Managing risk
  • 69. Single employer as a MAT Inconsistency – no. 1 risk Equal pay Discrimination Lack of clarity on delegation means confusion and either indecision or bad decisions T&Cs – harmonise or not? Specific risks - employment
  • 71. Talk to us… Name | +44 (0) name.name@brownejacobson.com Please note The information contained in these notes is based on the position at February 2016. It does, of course, only represent a summary of the subject matter covered and is not intended to be a substitute for detailed advice. If you would like to discuss any of the matters covered in further detail, our team would be happy to do so. © Browne Jacobson LLP 2016. Browne Jacobson LLP is a limited liability partnership.
  • 72. Julia Green | +44 (0)1392 45 8727 julia.green@brownejacobson.com Jamie Otter | +44 (0)161 300 8038 jamie.otter@brownejacobson.com Adrian Shardlow | +44 (0)115 976 6091 adrian.shardlow@brownejacobson.com Nick MacKenzie | +44 (0)121 237 4564 nick.mackenzie@brownejacobson.com