A Guide To Conversion

More and more schools are converting to Academy status in order to gain greater autonomy and control over the way they operate.

Becoming an Academy means greater freedom over budgets and resource allocation, curricula, staff pay, and your term and school times.

However, the process can be complicated, and if you are considering converting your school you will most probably need experienced professionals to advise you, particularly on legal, accounting and audit matters.

At Sutton McGrath Hartley we specialise in audit and accounts but we partner with leading Academy Solicitors to give you unified advice covering all the key issues in these areas.

We can also recommend other professionals you may need, both during the process and subsequently; for example, tried and tested bankers and financial advisers.

So, if you have us on your advisory team, you can be assured of the highest quality advice, a cohesive approach from everyone involved, clear explanation of the issues you face, answers to all your questions, and, as a result, a significantly reduced requirement on your own time.

The following notes are useful introductory guides to the areas you can rely on us to provide advice on.


1. Why convert?

2. Accounting, audit & taxation issues

3. Legal issues

4. The consultation process

5. How does my school apply for academy conversion?

6. The conversion grant

7. The conversion process

8. Can a school change its mind midway through the Academy conversion process?

9. Funding

10. Opening a bank account

11. The Commercial Transfer Agreement

12. Construction work

13. ‘TUPE’ employment rights

14. Who will own the school’s land and buildings?

15. DBS checks after conversion

16. Can my Academy still use local authority services post conversion?

17. Post conversion life


  1. Why convert?

Converting to an Academy will give you the freedom to make your own decisions on how your school is run.

The constraints of working under local authority control will be removed, giving you autonomy to set and manage your budgets more effectively to meet the individual needs of your school and its students.

Academies have the freedom to establish targets for excellence. The national curriculum can be adapted or changed completely giving greater flexibility to educate your students.

Academies allow you to adapt the lengths of term times and school days to help you offer more extra-curricular activities as appropriate.

Setting salaries for your staff will be the responsibility of the Academy and not the local authority. This means staff can be rewarded based on performance related factors, providing greater opportunity to raise standards within the Academy.


  1. Accounting, audit and taxation issues

 Please see Audit, Accounts & Taxation


  1. Legal Issues

Our specialist legal Academy conversion team will fully engage with your school to ensure you understand all the legal aspects of the conversion process, including the benefits and risks, and how to communicate these issues to governors, staff and parents. For example, the following are some of the issues our legal team will be able to help with:

  • Consulting staff, governors, parents and other key stakeholders
  • The conversion application
  • Creating a company limited by guarantee
  • Negotiating and drafting funding agreements
  • Negotiating and drafting commercial transfer agreements
  • Drafting of lease transfer documentation
  • Advising on employment law, managing change and TUPE
  • Closing financials

If you are a single academy looking to join a MAT, or a MAT looking to bring in new schools, our legal team can also assist with the following legal aspects:

  • Amending the existing master funding agreement
  • Drafting additional agreements
  • Drafting commercial transfer agreements
  • Employment law and TUPE
  • Drafting of lease transfer documentation
  • Governance issues
  • Drafting scheme of delegation


  1. The consultation process

The Academies Act 2010 states that consultation should certainly take place prior to the signing of the funding agreement, which is usually two to three weeks before the conversion date, however it is good practice to consult all key stakeholders earlier on, and on an ongoing basis.

We recommend that key stakeholders, including; parents, staff, students, other schools, the local authority and the local community should be consulted over a minimum period of 8 weeks.

It is also recommended that a school holds at least two full governors meetings in the process.

The first meeting should be used to develop a series of action points and to identify who will take the lead in approving the draft documentation which will need to be sent to the DfE and local authority.

This initial meeting will generally be held once the Academy Order has been received.

The second meeting should be held around a month prior to the conversion date, when governors will make the final decision on the conversion to academy status.

Under TUPE regulations (see point 13), the current employer also has to inform recognised trade unions that a transfer is due to take place, when this is likely to happen and the reasons for the change. There is no legal obligation to inform employees directly, however the Academies Act 2010 suggests staff should be consulted on whether the school should convert to an Academy. Most schools will strive to make sure staff feel involved in the conversion process.

If you are converting as a MAT then a board meeting containing representatives from each school will be required in order to establish how the Academy trust should be run once established.


  1. How does my school apply for academy conversion?

Any school wishing to convert to academy status needs to complete the relevant application form on the Department for Education (DfE) website, which can be found via this link: www.gov.uk/government/publications/academy-conversion-application-forms

Confirmation that the schools governing body has agreed to become an Academy is required. Likewise for foundation, trust or voluntary schools, consent from the foundation, trust or diocese to proceed with academy conversion will be required.

  1. The conversion grant

As soon as the DfE has approved the conversion application, and the Secretary of State has issued the school with the Academy Order, the school is eligible for the £25,000 conversion grant.


  1. The conversion process

There are five key elements to the conversion process:

a. Form a company limited by guarantee

b. Enter into a funding agreement between the Secretary of State for Education

c. Transfer the employment of the school’s staff from the Local Authority to the Academy Trust

d. Transfer land and buildings

e. Negotiate a commercial transfer agreement to transfer the school’s other assets and contracts from the local authority to the academy trust

To ensure the desired conversion date is met, the DfE have specified a number of key dates for when it expects to receive draft and final documentation by. These dates can be found here: www.gov.uk/government/publications/academy-conversion-important-dates    


  1. Can a school change its mind midway through the Academy conversion process?

A school is free to change its mind about converting to an Academy at any point before the documents are sent to the Secretary of State.

This is usually around two to three weeks before the conversion date.


  1. Funding

The funding agreement doesn’t state the amount of grant the Academy Trust will receive for running the Academy. This information will be provided in the annual letter of funding.

The DfE will send an ‘indicative letter of funding’ prior to the Academy Trust’s first payment informing the Academy how much grant they will receive to cover the period between the conversion date and the end of August. This letter is usually sent four to six weeks prior to conversion.


  1. Opening a bank account

As soon as the Academy Trust is incorporated with Companies House and has a company number it is best to start the process of opening a bank account in order to ensure it is fully operational when needed.


  1. The Commercial Transfer Agreement

Prior to Academy conversion, the local authority will be the existing employer of staff, owner of assets and responsible for the contracts the governing body has entered into.

It is unlikely that the DfE will allow the school to convert until it receives confirmation the terms of the Commercial Transfer Agreement have been agreed.


  1. Construction work

Building and construction contracts are generally agreed over a relatively long period of time, so existing Local Authority Contracts may need to be transferred to the Academy Trust such that the contractor becomes accountable to the Academy.


  1. ‘TUPE’ employment rights

TUPE is an abbreviation of ‘Transfer of Undertakings (Protection of Employment) Regulations 2006’ and protects an employee’s terms and conditions of their employment when this is transferred from one employer to another. When a school becomes an Academy, the employment of staff transfers from the local authority to the Academy Trust.

All employees will transfer to the Academy Trust on their existing terms and conditions of employment. Legal advice should be sought should you want to make changes to the terms and conditions of employment for your staff after the conversion process.


  1. Who will own the school’s land and buildings?

This all depends on the type of school and current ownership of the land.

For community schools the land is generally owned by the local authority. Upon conversion, the Academy trust will occupy the land on a 125 year lease with the local authority becoming the landlord for the Academy Trust.

Land ownership for Church schools is often split between the diocese and the local authority. For land owned by the local authority the 125 lease ruling will apply. If the diocese owns the land a license will generally be granted to allow the Academy trust to use the land under the church supplemental agreement.

For Trust schools the freehold of the land will be transferred from the current foundation to the Academy Trust resulting in the new Academy Trust becoming the owner of the land.


  1. DBS checks after conversion

Unless there is a concern for a particular member of staff, new DBS checks will not be required for existing staff upon conversion to Academy status. DBS checks will be required for new staff under the ‘Keeping Children Safe in Education’ requirements.


  1. Can my Academy still use local authority services post conversion?

Academies may ‘buy back’ services from their local authority, however as they are now in receipt of public money the Academy Trust has to ensure it can demonstrate it is getting value for money so any services bought in from the local authority must reflect this.


  1. Post conversion life

The actual conversion is just the starting point. With the help of your conversion team you can set growth and performance targets to ensure your Academy thrives.

Your relationship with your professional advisers doesn’t simply end at the point of conversion; building lasting relationships will ensure you have access to the best advice possible whenever you need it.

Our in depth knowledge of the education sector allows us to ease the burden of your financial regulatory obligations and allows you to concentrate on what is really important – running your school.

We can assist head teachers, governors, accounting officers, chief financial officers, and business managers with:

  • Governance and advising on the structure of the Trust
  • Helping the Accounting Officer and Trustees understand their duties
  • Internal reviews or internal audit
  • Year-end accounts and statutory annual audit
  • Budgeting
  • Choosing your accounting software
  • Payroll
  • VAT and PAYE advice
  • Pensions and wealth management

So if you are a school that has yet to convert, or a previously established academy looking for a competitive quote or to review your procedures, please get in touch to arrange a no obligation consultation.


WP-Backgrounds Lite by InoPlugs Web Design and Juwelier Schönmann 1010 Wien