How long does a funding agreement last?

The simple answer is ‘forever’ unless either the Secretary of State or the proprietor gives the other 7 years notice or the academy no longer meets the legal requirements for an academy or is failing.

The current model agreement provides for termination:

  1. with 7 years’ notice either way,
  2. if the academy no longer meets the basic requirements for an academy, as set out in its Funding Agreement or the Academies Act 2010,
  3. if the academy is in material breach of its fuding agreement,
  4. if a ‘special measures termination event’ occurs (in simple terms: that the academy made inadequate progress following a ‘special measures notice’ from the Chief Inspector),
  5. if the academy is insolvent, or
  6. if the acedemy trust has decided to wind itself up.

Older agreements had similar termination conditions. But, as usual, funding agreements vary, so if you are concerned about the position in a particular academy or free school, check its funding agreement.

  2 comments for “How long does a funding agreement last?

  1. Meriel
    March 15, 2012 at 6:45 pm

    David, fantastic blog. What I have not been able to find out anywhere is what happens to the school on termination of the funding agreement. Is the SoS obliged to find a new Trust to run the premises for the current pupils? Also, if the Academy goes into insolvency then as I understand it creditors cannot force the sale of the only asset (being the land) assuming this was originally owned by the public sector – so it’s not attractive to contract to supply academies, although I appreciate the YPLA (and then EFA) monitor the finances of academies. Do you know if the YPLA has ever bailed out an academy in financial difficulty?


  2. DW
    March 19, 2012 at 5:45 pm

    Terminating the funding agreement is just like terminating any other contract. If it was terminated by the Secretary of State because of a breach of contract by the academy that could clearly leave the pupils in a very difficult position. Their school would simply come to an end. They would then be left trying to find places in other local schools, unless the Secretary of State put in place a new contract with a new academy trust.

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