A focus on free schools - the issues and challenges

The education landscape is rapidly evolving, with the opening of new academies, University Technical Colleges (14-19 academies) and Studio Schools (vocational 14-19 provision), as well as the introduction of free schools.  Those involved in education provision will be alert to the potential implications of the changes, and the opportunities and risks presented.  This article takes a closer look at arguably the most politically sensitive development: the free school.

What are free schools?
Free schools are entirely new schools, or existing independent schools changing status.  Maintained sector schools can convert to academy status, but cannot be free schools.  This November, the Department for Education ("DfE") announced the first special and alternative provision free schools, approved to open from September 2012.

How do they differ from academies?
Free schools have the same legal structure as academies.  They are companies limited by guarantee (somewhat confusingly also referred to as Academy Trusts), and have charitable status.  They are technically 'independent' schools, governed by the Education (Independent School Standards)(England) Regulations, receiving funding directly from central government.  Their financial operation is governed by the Academies Financial Handbook.
The main difference is that a free school is an entirely new school, rather than an existing school that has changed its status.  In terms of set up, free schools can be established by organisations such as charities; universities; parent/teacher, business, community or faith groups.

What needs to be demonstrated to set up a free school?
Applications are assessed on a range of factors, including cost and value for money, and the need for additional school places in the locality.  The application process includes a requirement for two financial plans: the first prepared on the basis that all pupil places will be filled (showing anticipated income and spending when the school is full for at least five years, up to and including the academic year after the school is full); and a plan showing how the budget would be managed if the anticipated places were not filled. 
The plans must be based on evidenced assumptions, and must be consistent with the overall application, reflecting the anticipated pupil numbers, staffing levels, educational vision, and any extended provision.  Existing independent schools wishing to convert also need to show a good track record of financial management, and that particular standards were met in their last inspection. 

What are the freedoms?
Similarly to academies, free schools benefit from a number of 'freedoms'.  They receive money retained by local authorities to provide central services to maintained schools, and can use their budgets more flexibly to purchase services.  They can set the length of the school day, and have more flexibility in relation to the curriculum and appointment of staff, as explained in more detail below:
•    Teachers

The Funding Agreement requires the school to take responsibility for the pay and conditions of service of staff, and for pension contributions and administration.  Free schools are not required to employ teachers who have QTS, and principals are not required to hold the National Professional Qualification for Headship.

The school must act in accordance with any relevant government guidance on staff qualifications, but otherwise can employ anyone it deems suitably qualified or otherwise eligible to teach.  The exceptions are Special Educational Needs Co-ordinators, and those appointed as a Designated Teacher for Looked After Children, who must meet the requirements of the applicable regulations. 

•    Curriculum
Mainstream free schools do not have to follow the National Curriculum.  However, a number of requirements are imposed through the Funding Agreement with the Secretary of State, such as the need for:
•    a balanced and broadly based curriculum including English, Mathematics and Science;
•    provision for religious education (there are specific provisions for faith schools);
•     regard to guidance on sex and relationship education;
•    compliance with guidance on pupil assessments as apply to maintained schools; and
•    being at the heart of the community, sharing facilities with other schools and the wider community.

The requirements differ depending on the type of free school.  For instance, 16-19 free schools must meet the needs and interests of students, but the curriculum does not have to be broad and balanced.  Special schools must have broad and balanced curricula, but can deviate from the National Curriculum where appropriate; and Alternative Provision does not need to be broad and balanced, but must cover at least age and ability appropriate functional elements of English, Maths and ICT.

Funding issues
Funding is currently based on the average funding received by maintained schools and academies in the same local authority following a formula.  A 'ready reckoner' tool is available on the DfE website, through which an indicative calculation can be made. 

In outline, funding includes a per pupil unit, an additional amount, plus pupil premium for those entitled to free school meals, the local authority central spend equivalent grant "LACSEG" (the amount normally withheld by local authorities for providing central services), funding for sixth form pupils if there is over 16 provision, a grant to cover insurance costs, and additional SEN funding.  In addition, free schools are eligible for lead-in funding to enable the school to open, and funding to bridge the gap between the school opening, and there being pupils in each year group.

However, free school funding is under review, and funding levels for 2012/13 have not yet been established.  It is anticipated the start-up funding currently provided will be reduced in the future. 
 
Planning
Planning and site location have proven to be significant hurdles for those setting up free schools to date.  To facilitate the development of free schools the Government have made it very clear to planning authorities that they should cooperate and facilitate their development, imposing conditions only where absolutely necessary.

Concluding thoughts
The Government is taking  steps to smooth the path for increasing numbers of free schools.  Some schools will see a potential threat to pupil numbers, whilst others may find a free school presents an opportunity for positive collaboration (free schools being required to work with other schools under their funding obligations), giving rise to efficiencies, staff development, and shared best practice.  For independent schools facing financial difficulties, this may give pause for thought for governors considering their options.

Ashfords LLP advises schools and academies across a range of education matters. To discuss the issues raised in this article, or any matter arising in the schools context, please contact our Head of Education Helen Tucker on 0117 321 8078 or h.tucker@ashfords.co.uk.

Ashfords LLP is Authorised and Regulated by the Solicitors Regulation Authority. The information in this note is intended to be general information about English law only and not comprehensive. It is not to be relied on as legal advice nor as an alternative to taking professional advice relating to specific circumstances.