Expert view: Keeping academies stable

Graham Wilson, partner at the Blackburn office of accountants and business advisors Beever and Struthers, sees a need for stable and consistent regulation of academy schools.

I took the Eleven Plus, attended a state grammar school and studied for ‘O’ levels. I’m still around but the education system that got me here isn’t. The academic world thrives on change, but for the commercial world I live in, stability is equally important.

My school is now an academy and therefore an exempt charity and a company limited by guarantee. That makes it subject to company law and charity law – tried and tested legislation that has evolved since Victorian times.

However, some aspects of academies’ financial and constitutional regulation are new and rather less stable. For example, each year the government’s Education Funding Agency (EFA) publishes the Accounts Direction, the rule book by which academies report their figures and each year it is different.

Academies are also expected to comply with the general Statement of Recommend Practice (SORP) that applies to most charities; whereas independent schools, higher and further education institutions all have their own tailored versions.

As a result, academies and their auditors have many difficult issues to address such as, “if trust and charity law requires trustees’ remuneration to be disclosed in annual accounts, bearing in mind that paid trustees were few and far between until academies came along, is it right that teachers who give up their spare time to become governors (trustees) of their academies, should have their pay details on record at Companies House?”

A Statement of Recommended Practice (SORP), designed to provide accounting consistency within a particular sector, for academies is on the cards, but it will be too late for one school groundsman whose £20k salary is there for all to see, including friends and colleagues. Actually, the need for such disclosure can be avoided if the academy’s governing structure is appropriately structured. The regulation of academies is complex and ever-changing, but there are specialist advisors who have built up considerable expertise to help academies, leaving them to do what they were set up to do – to provide our children with a first class education.