March 2013

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The courts may have their work cut out coming to terms with the complexities of legal agreements regarding academies. Richard Bird investigates…

Level heads

The English have legislated in bewilderingly diverse ways for a national education system since they decided, 300 years after the Scots, that it may be a good idea to have one. These included allowing organised private philanthropy to provide it and paying grants if certain standards were reached, allowing local school boards to do so, and leaving public education to local authorities (LAs).

The 1986 Education Act tried to put parents in charge. The 1988 Education Reform Act nationalised it. Now we have the interesting experiment of running it, not by statute, but through contract law, which is why some queries on ASCL’s hotline have to be answered with “Please check your funding agreement.”

A contract traditionally has four elements: parties who commit to enter into legal relations, a promise, an acceptance, and a consideration. Once those are present, the courts will enforce it.

The need for a commitment to enter into legal relations explains why a secretary of state may become frustrated if schools do not wish to enter into a contractual relationship with him. The obvious solution is to change the governing body. But the only statutory ground, at present, is that the school is failing in a duty; and the local authority has first refusal on intervention.

Bargaining power

The promise takes the form of ‘I will do this: you will do that.’ The terms depend on the relative bargaining power of the parties. In the first academies, a philanthropist built the school and put their own reputation on the line. The government paid the running costs. The contracts are consequently relatively even-handed. Although lip service may be paid to science in science lessons, revealed truth can be taught as truth everywhere else, for example.

In ‘reborn schools’, where other reincarnations of the school had failed, the willingness of the sponsor still had power, although less than where the sponsor built the school. By the time we get to converter academies, the only negotiating leverage the school has is to increase, or not, the number of academies. The model contract is correspondingly full of clauses binding a school to behave like a maintained school.

However, judges increasingly look at the reality of contractual relationships as well as the words. In a recent case on the admissions of children with special educational needs (SEN), it was found that, even though the words of the contract did not bind an early academy to obey a ruling of the first tier tribunal, it was so bound in practice. The corollary is that if academies’ SEN admissions are subject to the first tier tribunal, whether or not their agreement says so, then so are exclusions, where disability or special needs are involved.

Reliance on contract raises other intriguing questions, which are unlikely subjects for litigation. For example, how might the courts interpret, as a contractual term a ‘broad and balanced curriculum’?

Creating uneasiness

Other questions are more likely to arise. For example, can a contract be changed retrospectively? At present, some different secretary of state might give due notice and make a new offer that cannot be refused. The notice must be seven years but could a school resist if it knew that in seven years’ time there would be no funding? Could this be done without recourse to Parliament? It could. Would it be legally unreasonable? It might be. Could the same procedure be used to drive all academies into chains?

Why do that? Well, for some, single schools running themselves creates the same uneasiness that ‘masterless men’ did for medieval jurists. For them, some middle tier has to be in charge of every school or it is not a system.

Then again, chain academies for the most part brought only management and ethos to the contract, so how much property do such chains have in their schools? Can a school opt out of a chain? Or are they bound to their master? Does a school in a chain exist as a separate entity that can contract for itself?

Finally, what role has the local authority in all this? The instinctive answer is none; they are excluded from the contract. But interestingly the government has not yet repealed or modified the 1996 Education Act provisions that give the local authority proactive duties to public education. How does this relate to the enforcement of a contract between school and secretary of state?

‘Legislate in haste, repent at leisure’ seems to have been the motto in English education. The courts, tribunal service and lawyers may enjoy a good deal of work in interpreting the implications of the new contractual education service.

  • Richard Bird is ASCL’s legal specialist