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Is It Time to Update Your Funding Agreement Documentation?

on Thursday, 24 September 2020.

We have recently been supporting several academy trusts in updating their funding agreement documentation to the latest DfE model.

Sometimes this is a requirement of the RSC in the context of a new school joining the trust. In other instances, the purpose of the update is to secure a CIF (condition improvement fund) bonus point.

Whilst the CIF 2020 to 2021 application round is now closed for applications, academy trusts might start to think about updating their funding agreement(s) in advance of the next round, as this additional point scoring basis is likely to be the same next year.

So when should you update your funding agreement(s)?

DfE Policy Updates/Changes

Since the first model funding agreements were published, policy has changed time and time again and many academy trusts with older documentation might not be aware of the following changes which might be beneficial to the trust:

  • Qualified teaching status is no longer required (save that there is still a qualified teaching requirement for the SENCO and the designated teacher for looked after and previously looked after children).
  • Only changes relating to the composition of the board of trustees and membership in the Articles of Association now require the consent of the ESFA (though please note your Article 10 might require consent for all changes).
  • Academy trusts can carry forward GAG with no cap (save that if the Academies Financial Handbook prescribes a cap, that will apply - at present, it doesn’t).
  • Academy trusts can trigger a termination of a funding agreement if the level of GAG funding notified to them places the academy trust in a position of insolvency.

Academy trusts should be aware, however, that adopting the new model to take advantage of these changes might be detrimental in other areas. By way of example, some academy trusts might have the benefit of estimate funding for the first five to seven years of the life of each academy. If any of your schools are within this timeframe, adopting the new model might see that estimate funding switched for census funding, unless specific agreement can be secured. There is also an obligation to share land with another academy trust if not all of an academy's site is needed for the operation of that academy.

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'Trigger' Events

An academy trust might be required to adopt the new model funding agreement for one or more of its academies as a condition of consent for:

  • the conversion of a school to join the academy trust
  • the opening of a free school
  • the re-brokerage of an existing academy to join the academy trust
  • an age-range or capacity change
  • an advancement of GAG
  • adopting the latest model Articles of Association

Academy trusts that are thinking about expansion in the near future might prefer to move forward with the adoption of the latest model funding agreement documentation for existing academies ahead of expansion which could:

  • assist the expansion application
  • ease the burden of work to be carried out at the time of expansion.

For a free of charge initial conversation about whether adopting the latest model funding agreement documentation is right for you, please contact Chloe Brunton on 07920 281889, Jaime Hobday on 07467 220 552 in the Academies team or complete the form below.

 

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