Funding agreements vary!

The short answer is that funding agreements vary between academies so always check the particular funding agreement for the academy/free school with which you are concerned.

As the Department’s “Academy Principals’ Handbook” puts it:

“Most, but not all, Education Law applying to maintained schools does not apply (through explicit mention in the statute or regulations) to Academies. A number of legislative provisions are, however, enforced in respect of Academies through equivalent provisions in the Funding Agreement.”

In other words, Academy Funding Agreements can (and sometimes) do require the Academy to comply with the law as it applies to maintained schools, either by specifically referring to education legislation, or by setting out equivalent requirements.

But the Handbook does not reveal what applies and what does not. Indeed, it also says this:

“It is important to stress, however, that the exact nature of each Academy’s Funding Agreement, and indeed the composition and operation of each Trust, does vary and it is necessary to understand the documents for your specific Academy. The Department would recommend, therefore, that legal advice should be sought where necessary by the Academy Trust or the Principal in order to ensure that the obligations within the agreement are complied with fully.”

That is good advice. But unfortunately, only a page later the Handbook ignores its own advice when it says this:

“As mentioned above, there are a number of core conditions on funding of Academies, which do not vary. These are listed at the very start of the agreement”

Unfortunately, that is not correct. There are no common core conditions in funding agreements. The agreements vary.

That is because they are individual contracts signed between the Secretary of State (indeed several, with notably different approaches to the whole thing: including Andrew Adonis, Ed Balls and now Michael Gove), and a whole series of wildly different sponsors and other bodies which wanted to set up academies over a period of nearly 10 years.

Over time, the Secretary of State developed, and then changed, a model agreement which was used as the starting point for negotiating future agreements from that point. But the model was not retrospective and few funding agreements have been changed from the terms in which they were originally signed.
So there are numberous variations between funding agreements, some more significant than others.

What that means (and I cannot emphasise this enough) is that when considering the law in relation to any particular academy or free school you must look at the funding agreement for that particular free school or academy.

Here some examples of how things vary (but there are many many others):


In most of the early Funding Agreements the clauses dealing with religious education and thus the parental entitlement to withdraw their child from the religious components of the school are in a contract Annex which can be amended unilaterally by the Academy. Two Funding Agreements (Peckham Academy and St Francis of Assisi Academy) do not provide for the right to withdraw at all.

In others, the Funding Agreement allow for religious elements to extend far beyond the RE and collective worship aspects of school life, such that any right to withdraw may be extremely difficult to exercise in practice. See thus, for example, the Bexley City Academy Funding Agreement which, while providing for the right to withdraw from religious education, provides that “there will be cross-curricular learning of Religious Education”, which will be predominantly taught through English and Cultural Studies but also through Science, Geography, History, Dance and Drama.


As for permanent exclusions, some of the early Funding Agreements copy out sections of the Departmental guidance (i.e. maintained school guidance) of the time on permanent exclusions (thus setting in stone for that Academy rules which change regularly in the guidance itself); others merely make provision requiring the Academy to have regard to the relevant guidance (so at least they keep up with the rules as they change for maintained schools).

Those which replicate large sections of the departmental guidance (such as the Funding Agreement for the Peckham Academy) usually also thereby transcribe the requirements in s52 of the Education Act 2002 and Education (Pupil Exclusions and Appeals) (Maintained Schools) (England) Regulations 2002 (as these are repeated in the guidance) as they existed at the time.

For example, in 2004 the Education (Pupil Exclusions and Appeals)(Maintained Schools)(England) Regulations 2002 were amended by SI 2004/402 to provide that the standard of proof in an exclusion to which those regulations apply was the civil standard of proof. But that amendment would not apply to an academy whose funding agreement was not framed to keep pace with changes to the 2002 regulations because, for example, it had encapsulated the form of the regulations as they had originally existed. In such an academy, the criminal standard of proof (beyond reasonable doubt) would apply in accordance with the decision of the Court of Appeal in YP [2003] EWCA Civ 1306.

However, those which merely rely on a requirement to have regard to the exclusions guidance leave the Academy in a position to decide not to follow the normal procedural protections and requirements in a particular case (the courts have made it clear that a decision maker which slavishly follows guidance on matters to which it must have regard acts unlawfully – for an example in the context of education exclusions guidance see S v LB Brent [2002] ELR 566.  Many have few, if any, safeguards in place in relation to the process for fixed term exclusions.

Most of the early Funding Agreements allow for exclusion by the principal followed (for permanent exclusions) by a decision by the governors followed by an appeal (similar to maintained schools).  However, the detail varies enormously.  Thus, for example, while most Funding Agreements provide for an appeal against permanent exclusion to an “independent appeal panel” composed of members not associated with the Academy, albeit appointed by the Academy itself and thus of reduced independence some provide only for a final right of appeal to a different group of governors to those involved in the earlier decisions.

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