In this webinar, Hayley and Katie explored re-brokerage arrangements including the Regional School Commissioners’ legal powers and the circumstances in which an academy may be at risk of being re-brokered, as well as the potential consequences of refusing to consent to such an arrangement. They also look at this topic from the perspective of a trust being asked to accept a re-brokered academy and give an overview of the legal process that this entails.

1. Understanding re-brokerage for academies – October 2017

2. Understanding re-brokerage for academies – October 2017
“At no time have I ever worked with a company
offering both HR and legal advice that have
been so professional, effective and efficient”
James Howarth, The Hathaway Academy
Connect with Hayley
hayley.o’sullivan@brownejacobson.com
+44 (0)121 237 3994
Connect with Katie
katie.michelon@brownejacobson.com
+44 (0)115 976 6189

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4. What we will cover
• re-brokerage - background and context
• RSCs and their powers of intervention
• when an academy may be at risk of being re-
brokered
• consequences of refusal
• taking on a re-brokered academy and the legal
process
• funding and questions

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Background and context
What is a re-brokerage?
The term the DfE use where one academy
trust is asked by the Regional Schools
Commissioner (RSC) to transfer one, some
or all of its academies to another academy
trust.

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Background and context
When is re-brokerage usually considered?
Usually as a result of concerns about
performance at one or more of the trust’s
academies. Voluntary moves usually
referred to as transfers.

7. “As at 4 January 2017 there were 41 academies in the
process of being re-brokered. Of these, 31 are as a
result of intervention action on the part of the
Regional School Commissioner (RSC). The rest involve
instances such as a single academy trust seeking to
join or set up a multi academy trust; or a sponsor
deciding to hand back an academy because it no
longer has the capacity to run it or wants to wind
down the trust.”
Department for Education (MAT 64) para 2

8. “Where MATs are on track to deal with
underperformance they should be supported to do so.
The default approach to tackling chronic
underperformance will continue to be to broker the
school into an alternative MAT, where school leaders
with a track record of success can apply proven
models to improve performance.”
Department for Education (MAT 20) para 25

9. More than 100 schools are now re-brokered every year
and this number is expected to rise as the number of
academies increases.
“booming academy transfer market”
DfE figures, Feb 2017

10. RSCs and their powers of intervention
• civil servants, responsible to the SoS
• core functions and powers set out in:
RSC Decision Making Framework
December 2016
• individual academy funding
agreements
• Education and Adoption Act 2016
• Schools Causing Concern guidance

11. Tackling educational underperformance in academies and free
schools
The RSC is responsible for holding academy trusts to account
where academies or free schools are underperforming. In cases
where formal intervention measures are required, RSCs will take
action to address underperformance and bring about rapid
improvement. This may include commissioning appropriate
support, issuing a pre-warning notice or warning notice or by
terminating the academy’s funding agreement, and identifying a
new sponsor to take on responsibility for the academy where
this is necessary.
RSC decision-making framework

12. Funding agreements & the EAA 2016
• funding agreement - primary source of
the trust’s contractual rights and
obligations
• importance of this contractual
underpinning made clear by the
Education and Adoption Act 2016 (EAA
2016)

13. Funding agreements & the EAA 2016
• EAA 2016 amends the Academies Act
2010 to provide that old funding
agreements are to be treated as if
they include the new termination
powers present included within the
new model funding agreements
• how certain as an academy trust can
you be of your contractual terms with
the SoS if they can be amended by
legislation?

14. Academies at risk of being re-brokered
In summary, academies are eligible for
intervention where they
1. have been judged inadequate by
Ofsted
2. are ‘Coasting’
3. have failed to comply with a
Termination Warning Notice (TWN)

15. 1. Judged inadequate
• at greatest risk of being presented
with a proposed re-brokerage
• RSC has power to terminate the
funding agreement
• consequences for stand-alone
inadequate academies?
• consequences for academies within a
MAT?

16. 2. Meet the definition of ‘coasting’
• Coasting Schools (England) Regulations
2017
• greater scope to avoid being the
subject of a proposed re-brokerage
• need robust plan and the necessary
capacity to bring about improvement
within a certain timescale
• insufficient capacity in the system to
force all coasting schools to convert to
academies or re-broker all coasting
academies to new sponsors

17. “As a result of the Education and Adoption Act 2016, regardless
of the prior terms in that academy’s funding agreement, where
an academy has met the coasting definition, and the RSC on
behalf of the Secretary of State has notified the academy that it
has fallen within the coasting definition, then the Secretary of
State is ultimately able to terminate the funding agreement for
that academy and move the academy to a new trust. Before
terminating the funding agreement on the grounds that the
academy is coasting, the RSC must first give the academy
proprietor a termination warning notice.”
Schools causing concern guidance

18. “Where an RSC has considered it necessary to terminate an
academy’s funding agreement as a result of the academy having
been coasting, that does not necessarily mean that the academy
must close. Usually the RSC will identify a new sponsor to take on
responsibility for the academy and will enter into a new funding
agreement in respect of that academy (this is sometimes referred
to as ‘rebrokerage’ of the academy). Where the academy that was
coasting was previously a ‘standalone’ academy, this will require it
to join a multi-academy trust (MAT). The academy will remain
open, and the RSC and the new sponsor will work to ensure
minimal disruption to pupils’ education during the transition.”
Schools causing concern guidance

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3. Have failed to comply with a TWN
• Termination Warning Notice issued to
trusts under the terms of their funding
agreement often as a result of
concerns over breaches of the funding
agreement, educational performance,
finances, governance and/or
safeguarding

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3. Have failed to comply with a TWN
• can be issued to coasting academies
• will specify the action the trust must
take and by when
• failure to respond or comply – trust
may be served with a Termination
Notice
• Financial Notice to Improve (FNtI)

21. Joining a particular trust
• trust/academy has the opportunity to
make representations
• may be able to influence the RSC on
who becomes the academy’s new
sponsor
• the worse the circumstances of the
academy in question, the more likely a
sponsor will be chosen by the RSC

22. Joining a particular trust
• if an academy wants a say in what
happens/where it goes, it is best to
engage with the RSC at an early stage
to put plans in place to secure
improvement. This may lead to the
trust having a say in who the
sponsoring trust will be or could even
avoid a re-brokerage in its entirety

23. @BJEducationLaw
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Refusing a re-brokerage request
• no direct legal power for RSCs to force
a trust to agree to transfer an
academy to another trust
• threat of terminating a funding
agreement has been highly effective in
obtaining consent to a proposed re-
brokerage arrangement

24. @BJEducationLaw
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Refusing a re-brokerage request
• if refuse, the RSC has to power to
issue a termination notice and
terminate the academy’s funding
agreement
• practical implications of refusal?
• Judicial Review

25. @BJEducationLaw
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Taking on a re-brokered academy
• RSCs have no power to force a trust to
agree
• a decision for the trustees of the
proposed recipient trust
• does the proposed re-brokerage fit in
with the trust’s aims, objectives and
strategic plan?

26. Taking on a re-brokered academy?
• does the trust have the capacity to
secure rapid improvement at the
academy?
• what are the risks identified by due
diligence and how will they be
managed and monitored?
• how does the re-brokerage affect the
current finances and short, medium
and long-term budget forecasts?

27. The legal process
1. consultation
2. due diligence
3. governance
4. deed of
novation/variation/termination and
funding agreements
5. transfer agreement
6. land transfer
7. TUPE and pensions
8. novations of any building contracts

28. @BJEducationLaw
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Funding
• little of no funding for re-brokerage so
more attractive for MATs to take on
maintained schools

29. @BJEducationLaw
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“We are concerned by the growth of ‘untouchable’ schools and
the length of time it is taking for some schools to be re-
brokered. The Government should give greater support for
schools which are deemed unattractive to sponsors and play a
more active role in re-brokering through RSCs.”
House of Commons Education Committee on MATs,
Seventh Report of Session 2016–17
.
Funding

30. Considerations for re-brokerage
• timing of re-brokerage is critical -
beginning or end of an academic and
financial year
• impact on the culture within the
organisation due to lack of information
can be difficult at the school level for
individual teachers, principals and
parents

31. @BJEducationLaw
have your say
Considerations for re-brokerage
• sensible timing of when and how
information is shared and how that
process happens
• shouldn’t necessarily be a swift
transfer – importance of DD

32. Get in touch
“At no time have I ever worked with a company
offering both HR and legal advice that have
been so professional, effective and efficient”
James Howarth, The Hathaway Academy
Connect with Hayley
hayley.o’sullivan@brownejacobson.com
+44 (0)121 237 3994
Connect with Katie
katie.michelon@brownejacobson.com
+44 (0)115 976 6189