Can parents and pupils enforce a funding agreement?

The short answer is possibly (although the Department and many academies would say not).

As explained in another post, academies/free schools are, in law, a type of independent school. But they are special in that, instead of there being individual contracts between each parent and the school, there is one contract, the funding agreement, between the Secretary of State and the academy/free school.

But to understand how parents might enforce obligations set out in the funding agreement, we must start with the position in ordinary independent schools and in maintained schools.

What happens in ordinary independent schools

In a conventional independent school, the contract will be between the child’s parents and the school.  Sometimes, such as where a child with a statement of special educational needs is placed at an independent school, it will be a public body, such as a local authority.

But either way, the primary focus in establishing, for example, the process to be followed before a child is permanently excluded, is the particular contract between the school and the parent. And the provisions of the contract are enforced, not through judicial review, but through the ordinary process of civil litigation which deals with breaches of contracts of whatever kind See, for example, the challenge to the exclusion of a boy from Marlborough College: Gray v Marlborough College [2006] ELR 516, CA.

Maintained schools

In a maintained school, parents/pupils can use judicial review directly to enforce obligations imposed on the school by acts of parliament, statutory instruments, codes of practice, and government guidance.

Academies and free schools

However, only few of the obligations imposed in that way on maintained schools also apply to academies.

Such obligations as there are are mostly in the funding agreement for the particular academy/free school.

That funding agreement is – in law – a contract between the Secretary of State and the sponsor.

Only the parties to a contract can normally enforce a contract. So the Secretary of State could, if necessary, bring an action in the County Court or High Court for breach of contract to challenge the academy’s failure to act in accordance with its Funding Agreement. If successful, the court might award damages to the Secretary of State for the breach. In an extreme case the court might make an order for “specific performance” i.e. requiring action. So if, for example, an Academy permanently excluded a pupil without adhering to the procedures set out in its Funding Agreement, the Secretary of State could sue, and ask for damages (altthough it is not clear how that would work since it would not be the Secretary of State who had suffered from the consequence of the breach of contract) or, exceptionally, ask the court to order the Academy to comply with the requirements of the contract.

But neither the parent nor the pupil (nor, generally, the Local Authority) is a party to that contract and they would struggle to use the contract claim to enforce their rights. Section 1 of the Contracts (Rights of Third Parties) Act 1999 allows a person who is not a party to a contract to enforce a term of it which purports to confer a benefit on him. But this is likely in practice to be of little assistance to pupils/parents because legal aid is unlikely to be available to bring a claim to enforce contractual rights and, in any event, a successful claim would be likely to lead, at best, to an order for damages, rather than “specific performance” of the obligation in question

Judicial review to enforce the funding agreement?

Let’s take a couple of examples:

  • the funding agreement for the particular academy says that, if the SENDIST orders that the academy should be named in part 4 of a pupil’s statement of SEN the academy will admit them. But what if it refuses to (as I have seen in practice)?
  • the funding agreement says that the academy will have regard to the DfE guidance on exclusions. What if it decides not to (as I have seen in practice)?

The first issue is whether it is actually possible to bring a judicial review of an Academy at all.

There is a separate post dealing with that.

But the fact that judicial review proceedings could be brought says nothing about whether, in those proceedings, a parent/pupil could get the court to force the academy to comply with the requirements of the funding agreement.

So the second issue is whether parents pupils could rely on the funding agreement in a judicial review?

During debates on the Academy Bill in 201, the Minister was asked to put the point beyond doubt:

“As for judicial review, the availability of this remedy could be put beyond doubt simply by making clear that the rights accorded to pupils and parents under academy arrangements could be enforced through judicial review.”

Rejecting that request for an amendment to the Bill, the Minister said this:

“I am happy to confirm that parents have always had the power to seek judicial review against either the academy for failing to follow its contractual obligations or the Secretary of State for failing to ensure that the academy complies with its obligations under the funding agreement. It would be unique in law to provide for judicial review to apply in particular circumstances. I am advised that the issue of whether any person can apply for judicial review will be determined by the courts in accordance with Civil Procedure Rules. The Government’s view is that the issue should properly be determined by the courts, and the House may not wish to set a precedent in this area.

But that is not actually an answer as explained further below (apart from anything else, just because the Minister says it, that does not make it the law).

And the point has never been directly tested in court in a disputed case because the cases where it has arisen have been always been resolved without ever actually getting to court.

As above, when the Minister referred (above) to “the power to seek judicial review against either the academy for failing to follow its contractual obligations” he was choosing his words carefully. Just because parents could seek judicial review, it does not mean they could actually succeed!

That is because even if an Academy can be “judicially reviewed”, that still does not necessarily mean that a parent/pupil can actually force the Academy to comply with its Funding Agreement.

I have seen lawyers for academies regularly argue, at least in correspondence (though the point has never been tested in court because the cases always settle), that parents/pupils have no rights under a funding agreement.

Indeed, when the governors of one maintained school contemplating conversion were recently asked about parents and pupils rights, they chose their words carefully (no doubt on legal advice) when they said that parents/pupils could complain to the Secretary of State about breaches of the funding agreement.

And indeed, in one case recently, I saw lawyers for the Secretary of State specifically actually assert that:

“[the academy's refusal to comply with the requirements of its funding agreement] could not be challenged by way of judicial review, for the breach would be contractual rather than a breach of statutory duty”

and that:

“[a term of the funding agreement] would not be enforceable by the [pupil] or the local authority, neither of whom would be privy to such contract [sic]“

But that case also settled (in both cases the academy gave in).

So the Secretary of State’s current position appears to be that:

  • parents can ask for a judicial review of an academy
  • they can ask the court to enforce the funding agreement
  • but the Secretary of State will argue against that on the basis that parents/pupils are not party to the agrement

What a mess!

So what could parents/pupils argue for?

They could – probably at best – claim to have a legally enforceable “legitimate expectation” that the Academy would comply with its Funding Agreement. In other words, they would be trying to hold the Academy to the promises it had made (in the Funding Agreement) to the Secretary of State. But the legal doctrine of legitimate expectation is not absolute: public bodies are allowed to break their promises if they have a legitimate and “proportionate” reason to do so.

See, for example, Nadarajah and another v. Secretary of State for the Home Department [2005] EWCA Civ 1363: “Where a public authority has issued a promise or adopted a practice which represents how it proposes to act in a given area, the law will require the promise or practice to be honoured unless there is good reason not to do so.” The argument would be that the funding agreement amounts to such a promise. But the academy might argue that there was some reason, on the facts of the case, why there was a good reason not to do what its funding agreement required.

Thus, in the examples above, it might argue that there was a good reason not to do as the SENDIST had ordered (and thus not admit the child), or that there was good reason not even to consider guidnce on exclusions. And it might succeed in that. Such arguments would not be available to a maintained school in the equivalent position.

The EFA

As explained in another post, it is also possible to complain to the EFA about a breach of the funding agreement.

 

  7 comments for “Can parents and pupils enforce a funding agreement?

  1. October 11, 2011 at 10:05 am

    David, I’ve just come to this site from the mention on today’s Guardian by Fiona Millar.

    The situation regarding judicial review is extraordinary.

    Do I read your FAQs correctly, that the funding agreement as a contract between the sponsor and the Secretary of State could (at least in effect) set aside even statutory obligations on “independent schools”, or do statutory obligations always override the funding agreements?

  2. October 11, 2011 at 5:20 pm

    The funding agreement cannot override a statutory obligation which says it applies to academies (or says it applies to ‘schools’ and thus to all schools). But a statutory obligtion which is expressed to apply to maintained schools, or types of maintained school, but does not mention academies, only applies if the funding agreement requires the academy in question to follow that statutory provision (and even then all the issues about enforcement of funding agreements then apply). I hope that helps.

  3. Tina Smith
    October 21, 2011 at 4:36 pm

    I attended a meeting yesterday and spoke a senior officer of our Local Authority who is active in the Academy issues. He said that if the Academy is failing to comply with a statement then we could still approachthe LA for assistance.He also said that Academies will have to comply with the Admittance Code and not discriminated against children with Sen.I don`t believe this.It is hard now in a maintained school to get the school to adhere to the statement I think it will be even harder in Academies.

  4. October 22, 2011 at 8:24 pm

    You make various points – let me respond to them:

    “He said that if the Academy is failing to comply with a statement then we could still approachthe LA for assistance.” – You should ask what legal power they have to force the academy to comply with the statement.

    “He also said that Academies will have to comply with the Admittance Code and not discriminated against children with Sen.”

    The question of whether they comply with the Admissions Code depends on their funding agreement. Ask if he has checked the agreement.

  5. salma
    February 3, 2012 at 2:30 pm

    hi, my son is attending a private school that was funded by a charity, unfortunately the charity can no longer support the school. the school has applied and been refused government funding recently, I wanted to know if it is possible for me and other parents to secure funding from the council for our children which we then put in to the school.

  6. DW
    February 6, 2012 at 6:22 pm

    A local authority has the legal power to make payments like that. But I would be very surprised if they would choose to do so. And you could not force them to do so.

Leave a Reply

Your email address will not be published. Required fields are marked *

* Copy This Password *

* Type Or Paste Password Here *