Academies on hold over pounds 1.3m debts.
The creation of eight new academy schools in Birmingham has been put on hold after council leaders refused to write off pounds 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 pounds 797,922 deficit will need to be settled before conversion to academy is confirmed. Debts from the other schools bring the total to almost pounds 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 pounds 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 pounds 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.
The Cabinet agreed to postpone a decision on the academies until these issues can be resolved and settled ready for more schools converting.
The education scrutiny committee will begin its own inquiry into academies in September. Committee chairwoman Anita Ward (Lab, Hodge Hill) said there had been indecent haste in setting up the academies and found it astounding that these issues had not been raised before.
She said: "I don't believe the council taxpayer is getting the best deal. I don't think this has been properly thought through before. We are going to look closely at this."
She stressed that the inquiry will not be about whether they are for or against academies. "Academies are a fact, it is how we deal with them that concerns us." As well as the debt issue the education scrutiny committee is also going to look at what happens if an academy fails or goes bust.
"With so many schools converting now there are going to be good and bad ones.
Members want to know what happens to the children and to the school buildings when that happens," said Coun Ward.
A more serious concern surrounds the selection of pupils, something academies are not supposed to do. Coun Ward wants to investigate evidence that pupils with special needs are finding it difficult to get into academies leading to fears of a two tier education system.
The issue of forced academies has also been raised in a letter to headteachers from the council's Cabinet member for children's services Brigid Jones.
She has confirmed support for schools who wish to remain with the local authority, but also offered a co-operative agreement with any academy or other schools who want to share support and expertise.
With about half of Birmingham schools now outside direct council control the Local Education Authority is reassessing its role.
Coun Jones (Lab, Selly Oak) said: "Rather than allow a national tide to tear up our supportive structures I propose we grow and own them, creating a vehicle which can be a home both for excellent schools to share and for struggling schools to learn and improve. I would add that If (Michael) Gove is targeting uncooperative councils, I would like to assure him that we intend to be very cooperative indeed.
"I would also like to propose that the cooperative is open not only to Local Authority schools but also to those schools with a sponsor or partner of their own who want to join, without disrupting local arrangements." She added that the co-operative is in its early stages and that it would be developed with the headteachers and academy sponsors.
Comment: Page 24
Education scrutiny committee chairwoman councillor Anita Ward