(Con)straining the system

The Guardian this morning carries an excellent article from @Miss_McInerney pointing out some of the problems with the academy system. One of the issues raised in the article is that of CEO pay and a pay cap is presented as one possible action that needs to be taken.

Personally I think CEO pay is a distraction, but more about that later.

The academies policy has gone through a number of stages, none of which have been planned or managed.

The initial iteration was the Blair/Adonis plan – take failing schools, pump money and external expertise and governance into them and see what happens. To an extent this was semi-successful. Its primary success of course was that “something was being done”. A few MATs were created by small groupings of very local schools. The problem was that the success laid the groundwork for future failure.

The second iteration was the Gove revolution. The Gove plan, when you reduce it to its basics was this. Throw all the pieces on the floor and hope that not only were the people picking up the pieces the right people but that they knew what to do.

As an aside, both Gove and Cummings misunderstood the concept of “disruption”. Disruption occurs because of the presence of a positive, well-meaning disruptor. They seemed to believe that if they disrupted the system by creating chaos such a disruptor would appear. That’s not how it works.

So what happened? Well, most Ofsted “Outstanding” schools converted as single academy trusts (SATs) and pulled up the drawbridge. At the same time those trusts that were created in the first wave were seen as the solution to the current generation of failing schools. A good example of this was AET. Created in 2008 to support one school it expanded rapidly in this period from 4 to 76 academies in three years. I’ll laugh in the face of anyone who tries to tell me any adequate degree of due diligence was carried out. This was not the only such trust. The super-heads involved were believed to be able to work miracles. Again, the success here was that “something was being done”.

Year Academies
2008 3
2009 4
2010 11
2011 30
2012 76

We’re now experiencing the third iteration. There are a large number of MATs, most of them with 3 or less schools. There are a small number of mega-MATs. And the main KPI of the RSCs seems to be to place schools requiring support into MATs. This is not a bad plan, but has one major drawback.

The larger MATs have reached their optimum size. AET is an oddity, we’ll leave that to one side. MATs with 20, 30, 40 schools are at a place where a step change has to take place. Organisational management is not infinitely elastic. That is, adding one school to a 30 school MAT cannot be continually done. At some point it reaches stage where its organisational structure cannot work and so at a certain point the costs of adding one more school become prohibitive because of the management changes that have to take place.

The medium sized MATs, the 5-15s, particularly those who already have 1 or more schools to support, are in the position that one more thing can send them under. Most of these MATs have yet to reach the size where their central services are cost neutral compared to what went before.

The smaller MATs have a different problem. Many of them were set up almost as co-operatives. Certainly many primary trusts were created with the £125k funding from DfE, where, I’m afraid to say, the sole purpose of creating the MAT was to obtain the £125k. These are what I call MATINOs. “MAT in name only”. There is very little in the way of central services and limited organisational cohesion.

The issue is that neither of these types of organisation have the capacity to take on schools in need of support. For both types of MAT an RI school, with a difficult budget represents to big a risk to their existing eco-system. We have seen this time and time again.

And I would also ask the following – what is the incentive for an Outstanding school, with good finances and substantial reserves to join any of these organisations?

Now lets come right up to date.

Outstanding schools currently applying to become a MAT sponsor are told that is not possible unless they straightaway take on a school in need of support. So before any capacity is built, before any central services are developed, take on a school in need of support.

This is a policy designed to build even more instability into an already unstable system.

Lets add to that Lord Agnews little sales brochure sent to all academy auditors yesterday. One of the interesting points he asks the auditors (!?!) to remind MAT leaders is this:

GAG pooling. This is one of the greatest freedoms a MAT has. The opportunity to pool GAG is particularly valuable, in particular to simplify the provision of support to weaker schools in a MAT until they can grow their pupil numbers. It is worth remembering that a MAT is a single financial entity.

What is he saying here? All the money in a MAT should be treated as a single pot. The MAT, rather than the DfE, should financially support weaker schools. So the DfE is expecting the MAT to both be the school support provider and the funder of last resort.

This is impossible to sustain.

One of the things we know about change is that whilst, properly done, it can lead to long term financial savings (and my firm belief is that this is possible in education), where it is done on the cheap it is unlikely to deliver. In particular, trying to restructure a system whilst starving it of funds (as has happened over the past eight years) almost mandates failure.

We need a plan to pick up the pieces and put them in better places.

OK, now let’s deal with CEO pay. There are three problems here.

First, the overall amount. I don’t have the numbers at hand, but lets take a guess and say there are 1,000 CEOs who are overpaid by an average of £50,000. Total £50,000,000. Not an inconsequential sum. But spread among those 20% of schools in need of support, its around £12.5 per school. I’m not saying its not important, but I am saying its not important enough to make me take my eye of the main issue, that of the overall structure of the system.

Second, the people. Does the potential high level of pay attract the “wrong” sort of person to the role? Possibly. And in some cases it is clear that this has happened (see the Guardian article referenced at the top of this post for that). But set against that I have to say that none of the many MAT CEOs I have met and worked with appear to be the “wrong” sort of person. Which suggests to me that the system is not, as someone suggested to me this morning, “infested” with them. The vast majority of people working in the school system, be they in LA schools or MATs are good, decent people, working hard each day for the benefit of children they serve. Those who suggest otherwise do a great disservice to any arguments they have about the deficiencies of the system.

Thirdly, the governance. No trust that I had any responsibility for as a governor would pay such amounts. I know many feel the same way. What’s interesting here is just how many of these high pay issues occur in older Trusts with older articles of association and with older funding agreements. The continued failure of the DfE to grapple with this issue should not be too puzzling, for it is within such Trusts that they tend to find their main supporters. The Trusts they go to when they want to promote their policies. The Trusts that tend to be in receipt of discretionary DfE funds. There seems to be no desire on the part of the DfE or the ESFA to rein in these Trusts.

So you could, as Laura suggests in her article, put a cap on CEO pay. I would argue that this is just addressing a symptom which does nothing to correct the underlying systemic problems.

My answer, which as a governor is exactly the one you might expect me to have, is that better governance is the solution.

We need:

A better exemplification of optimum structures. The current “let everyone do exactly what they like” approach has to come to an end. We have a pretty good idea how a MAT should be structured. Let’s stop pretending that if we let everyone do anything that a better way will emerge. Autonomy can be a good thing, but I would argue that autonomy to act, within a well though through system of constraints is even better. There is some better guidance on this but it still seems to me that the DfE are constrained here by the nature of many existing MATs.

More local democratic oversight. By this I mean very local. MATs should be required to have a (more than de minimis) level of parent representation on the trust board. No ifs, no buts. No “we have parents on the Local Governing Body”. This is not antithetical to the idea of a skills led board. To suggest otherwise is a gross calumny on the parent bodies of MATs. I would take this further to say that there must be parental representation among the members. I am even open to persuasion that the local authority should be a member, holding a “golden share”.

An absolute non-negotiable (for me) is that the LA should be the admissions authority. This is not to say that they should “gerrymander” the admissions but that all schools should be subject to the same admissions criteria and that the applications for all places in an area should be through the LA.

A better legislative framework. Too much of the current academy system relies on a mish-mash of contract, charities and company law. This is rather akin to using a mangle to make pasta – it can be done, but there’ll be an awful lot of waste and the final result will be pretty unappetising. This is why it fails so often. What we currently have is a school system built to fit the available legislation. The tail is wagging the dog. What we need is a well thought through, coherent framework within which to develop the school system.

This will not cure all ills, but neither will reverting the status quo ante. We need to take the best from both and build a better system

But I don’t think any of this is going to happen any time soon, because for it to happen the DfE will have to admit that what it is currently doing is wrong, and I don’t think they are capable of doing that.