The creation of eight new academy schools in Birmingham has been put on hold after council leaders refused to write off £1.3 million in school debts and raised serious concerns over the lease of buildings to the new institutions.
Issues were also raised over PFI repayments for new school buildings and contracts with existing suppliers which the council taxpayer may still have to pick up even though the school has transferred to a new owner.
The council’s Labour Cabinet has now demanded council lawyers and education department officials draw up new academy terms to ensure that the authority is not left with all the financial risk.
Meanwhile, the council’s education scrutiny committee has set up an inquiry into academies which will not only look at these issues but also how the council responds to an academy failing.
Details emerged as the Cabinet was asked to confirm the transfer of school buildings, under 125-year leases, to new academies at Chilwell Croft Primary in Aston, Great Barr Primary, Greenholm JI in Great Barr, Ark Kings Norton High School, Nechells Primary, Percy Shurmer Primary in Sparkbrook, Ark Tindal Primary in Sparkbrook and George Dixon School in Edgbaston.
An expression of interest for Ark Rose Primary, formerly Primrose Hill Primary in Kings Norton was approved – although the Cabinet also insisted repayment of school’s £797,922 deficit will need to be settled before conversion to academy is confirmed. Debts from the other schools bring the total to almost £1.3 million.
Councillors are worried that while the new academy sponsors, or owners, will gain city-held assets and Department for Education funding to operate their new schools, all the debts, costs and risk will remain with council taxpayers.
Council leader Sir Albert Bore (Lab, Ladywood) said: “If we approve these academies we get a £1.3 million headache, which will grow as more schools with deficits convert to academies.
“It would be sensible to have discussions with the sponsors over some repayment scheme on these deficits.”
Further details emerged that there is still £9.5 million owing on a contract for new buildings and ICT at George Dixon School, responsibility for which the council cannot transfer to the new academy.
Meanwhile, Liberal Democrat leader Paul Tilsely (Sheldon) was worried about the 125-year leases which do not prevent buildings being used or redeveloped for non-education purposes should an academy fail or close.
“We are effectively giving away substantial assets of this city built up by citizens over many, many years.”
He added that schools may have substantial reserves stuffed away “in a cookie jar somewhere” and these should also be considered.
