The TUPE Process
- What is TUPE?
The TUPE (Transfer of Undertakings, Protection of Employment) process is intended for the current employer to open formal consultation for staff who are about to transfer to a new employer i.e. the Academy Trust. In the case of Community Schools, this is the responsibility of the Local Authority; for Foundation/Trust schools, it is the responsibility of the Governing Body, although the LA might be in attendance if you buy into the HR service to give support and talk about Due Diligence.
- How long is the TUPE consultation
Whilst we contend that in law there is no need to consult if there are no measures intended, the accepted practice is to allow 30 days consultation, which shouldn't really span major holiday periods (half-terms may be acceptable). By measures we mean any changes to terms and conditions of service and/or redundancies.
- Who should attend the meeting? All staff should be invited to attend the meeting and be given ample notice - we recommend about two weeks. Similarly, all recognised Professional Associations and Trade Unions should be invited to attend and they should be given the same notice period. The LA will provide a list of current union representatives if you don't already have them. We also recommend a brief pre-meeting with Unions reps, Head and Chair of Governors (and hopefully other Founding Members), 30 minutes before the main meeting. This allows the Unions to ask questions, make statements and sort out any queries prior to the full meeting.
What is the aim of the meeting?
The purpose of the full meeting is to inform staff that there is an intention to transfer all staff under the TUPE regulations from their current employer (LA or Governing Body) to their new employer, the Academy Trust, from
whatever date is given.
Do we as a school need to say anything at the meeting?
1)Confirm that no measures are intended.
2) That all staff will transfer under existing terms and conditions of service and will continue to enjoy these for the foreseeable future (for teachers, Teachers' Pay and Conditions Document and Burgundy Book; for support staff, the Green Book).
3) That all new staff will be engaged on the same terms and conditions of existing staff, for the foreseeable future.
4) That individual and collective Union negotiating rights will continue to be observed by the Academy.
Questions can be asked of staff at that point and the union reps. invited to make comments.
- I understand that those who convert to Academy status have their Ofsted rating removedf? The current DfE guidance (as of Feb 2011) is that Ofsted Inspection Reports will be made available, but at present there are some technical difficulties that need to be resolved. Ofsted are currently developing a new web-site which is due to go live at the end of January 2011, and so the work linking to the old inspection reports won't happen until that website goes live.
Teaching & Learning
- What happens with the monitoring and evaluation of NQTs when I become an Academy? For an NQT, there are two monitoring and evaluation options, a statutory induction programme and a non statutory programme. Maintained schools are expected to adopt the statutory programme, though Academies and Independent schools can choose to implement their own programme. The difference for the NQT is that with a non statutory induction programme the teacher may have difficulty moving to employment in a maintained school, though they could remain in the non-maintained independent sector. Were they to join the maintained sector however, they would have to undertake a statutory induction programme. If an Academy wishes to adopt the statutory induction programme, it is required to register with the appropriate body, which is a Local Authority (LA), however it does not need to be the LA where it is based.
What should I be listing down in terms of my Asset Register? Normally schools have an asset register for computers and underwriters will usually ask for a breakdown in order to 'rate' the equipment correctly. A separate value will be asked for in respect of laptops; computer equipment on desks, (i.e. screens, hard-drives, printers); servers; white boards and interactive IT equipment. Nine out of ten schools do not have an asset register for general contents, (i.e. items not listed above), therefore, in such instances, schools are advised to take a figure of between 10% - 15% of the buildings sums insured i.e. £1m building sums insured figure would give a general contents figure £100,000 - £150,000.
What happens with our musical instruments when we become an Academy?
In terms of assets, it was traditionally the case that where a school held a stock of instruments, even if these were provided by the Music Service, they would transfer to a new institution e.g. an Academy. Now the majority of instruments are hired out directly to the pupil, or more accurately through a contract with the parent, so that the instrument follows the child as they leave the school, rather than remaining with the school.
Do we have to get three quotes for our first year insurance cover prior to going out to a full tendering process once we are an Academy?
The tendering process is not DfE regulation, but rather to ensure you are EU-compliant. Providing the insurance agreement for the first year is below the EU threshold then it appears the DfE will accept a one-year deal. You should note that, whilst any single year premium might be below the EU threshold, it is the cumulative value of the contract that is the crucial point. Therefore, a three-year insurance agreement, bringing with it beneficial cost reductions, would almost certainly take the Academy over the EU threshold, hence the requirement to go through a tendering process.
For further support and information it is worth registering with the Crescent Purchasing Consortium (CPC) http://www.cpc.salford.ac.uk/.
Whilst this appears to be an FE-biased body, it does accept schools and academies into its membership.
Can you tell me a bit about the Teachers' Pension Scheme (TPS) and how that sits with converting to Academy status?
The TPS is a national scheme and therefore the Academy itself carries no individual liability within that scheme. The TPS is not insurance based, it is a statutory defined benefit scheme, which is unfunded. Scheme benefits, including index linking under the Pensions (Increase) Acts, are paid out of monies provided by Parliament and contributions and other income are credited to the Exchequer. The Scheme Actuary undertakes a formal review not less than every four years to set the contribution rate (currently 20.5 per cent). The contribution is shared between employers and scheme members. The TPS is a group scheme and every TPS employer pays the same share of the contribution (currently 14.1 per cent) - and every scheme member pays the same contribution (currently 6.4 per cent). When a school ceases to be maintained by the Local Authority and becomes an Academy there is no 'transfer of accrued liability'. However, there is a change of responsibility whereby the Academy becomes responsible for all matters relating to the TPS, including payment of the employer contribution which must be remitted, with the employee contribution, to the TPS. While the school was maintained by the Local Authority, the Local Authority would be responsible for such matters.
- To note - You will also find that an audit is required each year at an average cost of £500 per Academy.
Can you advise me on the Local Government Pension Scheme (LGPS)?
The LGPS is a different matter and an independent actuarial assessment is made, based on the particular profile of the school staff involved. That assessment then leads to an employer's contribution that the government recommends is reduced over a period of around 20 years. Not all support staff pay into the LGPS and there will also be variations of risk depending on the age profile of the staff. The DfE currently says:
'If a pension fund is managing a deficit then this transfers from the LA to the Academy. However, the Charity Commission has advised that this liability does not mean the Academy is trading while insolvent, because the deficit is being reduced by the contribution made.'
To note - You will also find that as an Academy you will be required to pay for annual reports from the LGPS actuary. The cost for this is generally around £1k, however it may be more expensive in your first year (around £2k). This is despite a report at conversion (at around £2.5 - 3k) which was produced on 'assumptions' and not a 'calculation'. Both reports are required however, and it will very much depend on what your Auditors require since information on pensions is included in the annual report. To quote from Bedford Borough; "For information, the employer contribution is based on a valuation basis and the FRS17 figure is based on an accounting standard. Unfortunately, although both refer to a deficit they are calculated on a different basis; experience indicates that the figures will be significantly different from each other. So although the reports seem to repeat the exercise in practice the second one is a very different report."
Will we have to raise our own capital funding as an Academy?
No, all schools, including Academies, will be able to apply for Government capital funding. However, this does need setting within the context of current public spending and the review of overall funding on schools' capital programmes.
What happens if there is a capital emergency at the Academy? Would it have to cover costs?
Academies are eligible to seek an earmarked annual grant from the Young People's Learning Agency (YPLA) for emergencies, in the same way the LA can pay a maintained school a contingency payment.Academies are required to take out insurance at specified minimum levels of cover to protect against potential capital emergencies. The Department would expect schools to use their existing budgets to cover the cost of this.
What happens with VAT as an Academy?
There are proposed changes to the arrangements for reimbursing Academies for value added tax (VAT) costs. From 2011/12 and subject to the outcome of the 2011 Finance Bill,Academies' non-business VAT costs will be reimbursed by Her Majesty's Revenue andCustoms (HMRC). The refund facility would be available for VAT non-business costs back-dated to April 2011. Therefore no VAT grant will be included in the GAG calculations from April 2011.More information can be found on http://education.gov.uk/schools/leadership/typesofschools/academies/a0061399/academyfunding
As an exempt charity, are we able to benefit from the 80% mandatory rates relief?
The short answer is 'yes'. The grant from the YPLA to Academies contains an amount that represents 20% of the rates bill. The Academy will need to apply to its local rating authroity for charitable status relief from the 80%. When it comes to making the application, most forms will usually ask for the charity regsitration number. As an exempt charity, Academies do not receive a registration number. Therefore, reference will need to be made in any application to Section 12(1) of the 2010 Academies Act.
Can the Local Authority charge for faciltating the conversion to Academy status?
Local Authorities cannot be prevented from charging schools as there are no regulations which prohibit it. However there is a number of "risks to the Local Authority", if they do plan to implement charges. These are:
to future relationship with schools. The view is that in
forcing a charge on schools as part of the conversion process, it
would sour ongoing relationships with the school, and could
affect their willingness to trade with LAs in the
2) There is an obligation on the LA, where it is the employer, to manage the TUPE transfer process anyway.
3) The Secretary of State has powers to transfer land across to the Academy if LAs don't do it. In addition, it is possible for a Commercial Transfer Agreement to exclude the Local Authority.
4) There are concerns that smaller schools would not be able to afford the charges, particularly legal costs if the land transfer is complex.
The rationale for LAs introducing charges is:
1) The work is outside of normal service agreements with schools
2) The workload is significant and will increase as more schools transfer to academy status and the LA cannot reasonably undertake that work without being able to recover at least some of its costs.
3) Failing to bring in an appropriate charge for the work brings other risks to the LA in terms of its ability to resource this and other work. Some authorities are having to pay for external resource to manage the work associated with the transfer.
What is the role of the Company Secretary?
Under Article 82 of the Articles of Association of the Academy Trust (the "Articles"), the Governors shall appoint the Secretary (normally referred to as the Company Secretary), who shall not be a Governor or a Principal, for such term and remuneration and upon such conditions as they see fit.
A Company Secretary acts as a chief administrative officer, leaving the Governors free to concentrate on managing the business of the Academy Trust. Secretaries typically share Governors' legal responsibilities but ultimately the responsibility for the administration of the Academy Trust remains with the Governors.
- Do I need to register as an Indepedent School using the
This used to be a requirement, but no longer applies. Once the Funding Agreement has been signed, the DfE Project Lead in the Academy Convertor Division will notify the Department's School Organisation Unit (SOU) and they will arrange for the predecessor school to be shown as closed and for a new record to be opened on Edubase as an Academy. The school will retain its existing details on transition to Academy status except it will be issued a new Unique Reference Number (URN). The SOU will notify the Academy team of the new URN and they should contact the Academy and other interested parties.
- Do all governors become Directors of the Academy
The short answer is yes. Governors are also directors under company law and trustees under charity law. Those governors who are employees of companies, especially in senior positions, might wish to check that their employer is happy for them to become a director of an Academy Trust.
- How are the Founding Members of the Academy Trust
There is nothing in statute or guidance that provides advice, save to say that there must be a minimum of three members and this should inlcude the Chair of Governors. The decision should be taken within the Governing Body; the following is some thinking about the role from one governing body:
We are seeing the founders as long-term, trusted members of the community who will be trustees/guardians of the school for the community. While they will sit on the governing body and provide direction, the Chair of Governors and rest of the governing body will do the active governance/guidance of the school itself. This creates a long-term, sustainable model for the founders - they won't hold portfolios, like finance, curriculum or performance management, so they won't feel they have a large burden of work, but be there to keep an eye on strategic direction and provide a long-term perspective and consistency of governance. Given the rising workload on 'portfolio-holding governors', this separation makes sense to us.