School oversight and intervention

There are significant gaps in the Department’s knowledge of performance in individual schools. The Department’s narrow set of indicators means that it has not spotted important failures until too late and is over-reliant on whistleblowers. The Department focuses on educational performance but schools can change very quickly. Ofsted does not currently inspect ‘good’ schools for up to five years and ‘outstanding’ schools are exempt from routine inspection. Both Ofsted and the National Association of Head Teachers consider more regular inspections of ‘good’ and ‘outstanding’ schools are necessary to ensure high standards. Also schools can have safeguarding or governance and financial management issues while still performing well in terms of educational attainment. In such circumstances, the Department is reliant on whistleblowers to contact them, as happened recently in Birmingham, where two of the schools at the centre of the allegations had been rated ‘outstanding’ and were therefore exempt from routine inspection. The Agency has developed a risk analysis tool, which has some indicators of financial performance, but on the basis of what we heard, no indicators of efficiency or value for money, and neither the Department nor the Agency have any ‘leading’ indicators of safeguarding issues. (A ‘leading’ indicator gives an indication of risks before problems occur, as opposed to a ‘lag’ indicator of performance in the past.) Recommendation: The Department should develop leading indicators to fill the gaps in its information on governance, efficiency and safeguarding, and then incorporate them into its expectations of how oversight bodies identify underperformance. 4

Weak oversight arrangements can mask problems in some schools, which then go undetected until serious damage has been done. The Department has increased the autonomy of schools and oversight bodies. It has done so without an overall strategy, leading to confusion about the roles and responsibilities of the Department, the Agency, local authorities and academy sponsors, and allowing schools to fall through gaps in the system. Without a consistent understanding of the roles of existing and new oversight bodies, school failure can go unnoticed. Of the schools rated ‘inadequate’ in 2012/13, 36% had previously been rated ‘good’ or ‘outstanding’; oversight bodies need to work together to identify and intervene earlier in time to challenge and support schools. In September 2014 the Department introduced eight Regional Schools Commissioners, a welcome recognition of the need to provide more local intelligence and oversight for the growing number of academies. However, with 4,500 academies it is hard to believe that the Commissioners will have enough local knowledge on their own. There is also a risk that introducing commissioners will increase confusion about roles, especially where local authorities are already working constructively with academies. Recommendation: The Department needs to clarify its own role, and the roles of Regional Schools Commissioners, local authorities and the Agency and specificy how they will work together to share information and identify failure at an earlier stage. In addition the Department should set clear and explicit expectations for Regional Schools Commissioners to ensure that they make effective use of local authorities’ relationships with and local knowledge about schools and academies in their areas. In the next 18 months, the Department should evaluate the effectiveness of the Regional Schools Commissioners, and how constructively they are working with local authorities. The Department should also explicitly set out the set up and running costs of Regional School Commissioners so that value can be assessed.

Lack of clarity in the Department’s guidance has contributed to a situation where some local authorities do not understand their safeguarding duties towards pupils in academies. Under the Children’s Act 1989, local authorities are responsible for monitoring safeguarding arrangements in all schools; these responsibilities include academies set up in recent years. However, out of the 87 local authorities surveyed by the National Audit Office, 13 said they did not monitor academies’ safeguarding arrangements, and 13 said they would not intervene directly in an academy if pupil safety was threatened. We were surprised to hear that the Department had done nothing to address this potentially serious gap in oversight since becoming aware of it during the NAO’s work. After our evidence session we wrote to the Permanent Secretary requesting that he write immediately to all local authorities to confirm and clarify their duties in relation to safeguarding in academies. It is likely that some local authorities, in the context of wider messages about the academies’ autonomy, felt that safeguarding in academies was no longer their responsibility. Recommendation: The Department should clarify local authorities’ safeguarding responsibilities towards schools in a single document, including whether or not local authorities have the power to direct academies to change their safeguarding arrangements. 5

The Department lacks information about the number and quality of school governors. In an increasingly autonomous school system that relies on self- improvement, the Department relies on schools having good governors and strong leadership. The structure of governance varies depending on school type, but regardless of this, all governors must be aware of their responsibilities and be able to provide sufficient support and challenge. The National Governors Association estimates there are around 350,000 governors in England, but the Department does not have any record of the number, skills and capacity of governors or trustees, even though it relies on them to understand and challenge school performance. The failure of the Department and the local authority to identify problems with governors at Birmingham schools that were part of the ‘Trojan Horse’ inquiry highlights one risk of not knowing enough about governors. We have also previously reported on problems with financial management and unmanaged conflicts of interest in schools, and these continue to cause us concern. Recommendation: The Department should carry out a skills audit of school governors and ensure that all schools provide appropriate training for all governors and trustees. The Department should regularly assure itself that the capability and capacity of governors are fit for purpose.

Oversight bodies have not formally intervened in some schools that have been identified as underperforming. In September 2013, 179 open academies met the Department’s criteria for formal intervention, based on its own definition of failure (exam results and Ofsted rating). It should have intervened formally in all cases, but it only sent a warning notice to 15. The Agency also maintains a list of academies of national concern over financial management or governance issues. It has issued financial notices to improve to 4 of these academies, as a result of fraud allegations or financial irregularity; but there are another 7 which have been on the list for suspected fraud but have not received a financial notice to improve. Both the Department and the Agency acknowledge that their records are not good enough to explain why they have intervened in some academies and not others. Recommendation: The Department and the Agency should improve the recording of their decisions to identify and intervene in underperforming schools to ensure consistency in the approach to the schools. The Department must ensure that, as a minimum, all schools eligible for intervention are identified.

The Department does not know enough about which formal interventions are most effective to tackle failure under which circumstances. Of schools inspected by Ofsted in 2012/13, 48% (62 out of 129) of those which had received some kind of formal intervention improved at their next inspection. The remainder stayed the same or deteriorated, with the apparent impact of different interventions varying significantly. Meanwhile, 59% (2,181 out of 3,696) of schools that received no formal intervention also improved. The Department has not done enough to evaluate the effectiveness of different interventions and so does not know which are the most cost-effective. It recognises that it needs to do more. Recommendation: The Department should commission a full evaluation of the cost-effectiveness of all formal interventions in schools. 6

There are no independent assessments of the effectiveness of academy sponsors and the Department has taken an optimistic view of sponsor capacity for too long. The Department’s main intervention for failing maintained schools is to match them with a sponsor and turn the school into a sponsored academy. Often the failing school will become part of a chain of academies run by one sponsor with a central management function. In its keenness to expand the academies programme and increase the number of sponsored academies, it has allowed some chains to grow too quickly without the necessary capacity and capability. It has currently ‘paused’ the growth of 18 sponsors because of concerns about their performance; these sponsors are currently educating almost 100,000 children. However, it has no independent source of information about the effectiveness of academy sponsors and the Department is over-reliant on whistleblowers. Ofsted is able to focus inspections on a number of academies within a chain and give an assessment about how well the chain supports those academies but, unlike in local authorities, it is unable to inspect the central management function of a sponsor (which is the primary mechanism for delivering improvement in a failing school). Unlike the powers Ofsted has to inspect local authorities, there is no statutory framework setting out the basis for what the inspectors are assessing when they look at the operation of an academy chain, and Ofsted awards no overall judgement or rating of academy sponsors. Recommendation: The Department should obtain independent judgements of the capacity of sponsors that run more than one academy, and should use this to determine which sponsors are able to grow and when it should intervene with particular sponsors. 7 1 Oversight of the school system

The lack of information about the quality of safeguarding in academies is made more important by evidence that some local authorities have not been monitoring academy safeguarding arrangements in line with expectations. We heard that 13 of the 87 local authorities (15%) that responded to a National Audit Office survey were not monitoring safeguarding arrangements in academies, and that 13 said they would not intervene in 20 academies if pupils’ safety was threatened. The National Audit Office also told us that Local Safeguarding Children Boards, which are charged with scrutinising schools’ safeguarding arrangements, were expected to work with academies and maintained schools alike, but that these boards could not direct academies to change their safeguarding 21 arrangements if they found them wanting. After our evidence session we wrote to the Department and asked the Permanent Secretary to write to all local authorities to remind 22 them of their responsibilities for the safeguarding of all children in schools.

More generally, the National Audit Office survey found that local authorities took different approaches to academies. Over 90% of authorities were monitoring academies’ educational performance, with one third saying they would intervene directly if they had 23 concerns. But this goes against the Department’s clear statement that local authorities are 24 to have no role in monitoring academies, beyond safeguarding. Ofsted told us that local 25 oversight was “absolutely critical”. The Department has not undertaken a wide-ranging review of local authority performance to check that authorities have the capacity to provide adequate oversight. The last time it reviewed local authorities’ plans for school 26 improvement, in 2011, it had concerns in more than 80% of cases. 17 Report into allegations concerning Birmingham schools, p. 87. 18 Public Accounts Committee – Sixty-First Report, Education Funding Agency and Department for Education 2012-13 financial statements 12 May 2014 19 Qq 55-59 20 Q 123 21 Q119; HM Government, Working Together to Safeguard Children, March 2013. The guidance states, “Local Safeguarding Children Boards (LSCBs) do not commission or deliver direct frontline services […] While LSCBs do not have the power to direct other organisations they do have a role in making clear where improvement is needed. Each Board partner retains their own existing line of accountability for safeguarding.” (paragraph 3, p. 60). 22 Permanent Secretary’s response, 19 December 2014 23 Q 46; C&AG’s Report, para 1.14 24 Q 66; C&AG’s Report, para 1.14 25 Q 43 26 Q 46; C&AG’s Report, para 4.2,figure 11 10

We asked the witnesses about the Department’s aim for an increasingly autonomous schools system, with reduced interference from the centre, and what this would mean for school-level governance. The National Governors Association told us that “because there is more autonomy, [it] makes the role of governing boards much more important, and the 27 Government has recognised that”. We asked about the strengths and weaknesses in the current governance system. The National Governors Association told us that “we don’t know enough about where governance is right across the sector”, but that there is a “bell 28 curve” between very good and very poor governance.

Unlike magistrates, school governors are not required to undergo any training before they take up their posts. While being an effective governor in academies and maintained schools requires many similar skills and attributes, such as knowing the school and being able to interpret data, the legal duties of governors in academies are quite different from those in the maintained sector. The National Governors Association told us that the Department had introduced risks into the system because maintained schools could convert to academy status without the governors in those schools being fully aware of their 29 altered duties.

The Department has reviewed the arrangements for related party transactions in academy schools and chains. It found 17 instances where such transactions were not 30 properly notified and managed and is continuing to monitor these arrangements. 2 Intervening in underperforming schools

When a school has been identified as underperforming there are three main formal interventions, as described in paragraph 11 above. The NAO report shows that the Department and other oversight bodies do not always react consistently when schools merit intervention, and the Department was unable to explain why this is. In particular, analysis shows that, in September 2013, there were 179 open academies that met the Department’s criteria for a warning notice owing to poor educational performance, but the Department only sent notices to 15. In 141 out of the 179 cases, the Department had not 31 even identified the schools as being eligible for intervention.

Similarly, when the National Audit Office looked at records from the Agency, it found 4 cases of suspected fraud where schools had received financial notices to improve, but a further 7 such cases where they had not. The Agency had not kept sufficiently good records 32 to justify the different approaches taken. We questioned both the Department and the Agency about these findings and they acknowledged that they had not done enough to 27 Q 1 28 Qq 1,10 29 Qq 2-5 30 Q 126 31 Q 142; C&AG’s Report, para 3.5 32 Qq 193-195; C&AG’s Report, para 3.8 11 record the basis for judgements about when to intervene and that this had created a risk of inconsistency. They told us they were planning to demonstrate greater consistency in 33 future.

The effectiveness of formal interventions varies, and many underperforming schools improve without formal intervention. The NAO analysis of Ofsted ratings for all schools inspected in 2012/13 identified those that had been less than ‘good’ at their previous inspection. Some of these schools had received formal interventions in the interim, but these interventions were associated with a range of outcomes; 48% (62) of schools had improved, 39% (50) had stayed the same, and 13% (17) had deteriorated at the time of their next inspection. The NAO’s analysis shows that, while the apparent impact of different kinds of formal intervention varies significantly, the appointment of interim executive boards is associated with most improvement. The National Governors Association agreed that, in its experience, interim executive boards were often a very good way of moving a school out of serious difficulties. Meanwhile, 59% (2,181 out of 3,696) of schools that were less than ‘good’ but received no formal intervention also improved. The National Governors Association told us that it was surprised that such a high proportion of schools 34 improved without formal intervention.

Overall, the key finding of the analysis was that the Department did not know enough about what makes for effective interventions. It has not sought to understand the costs and effectiveness of different interventions and it acknowledged in answer that it could know more. However, it did not provide details of any further work that it has underway at 35 present.

Specifically with regard to sponsored academies, the Department drew our attention to the significant improvements that sponsors can make when the academy policy works 36 well. However, it accepted that its own and others’ analyses, for example that recently issued by the Sutton Trust, showed too much variation in the effectiveness of sponsors and academy chains. Ofsted agreed, but recognised that academy chains often have to work in challenging circumstances. The inspectorate stressed that in order for a chain to be successful it needed high-quality leadership at every level of management, including head 37 teachers, governors, trustees and chief executives. The Chief Inspector of Schools said that, when chains failed, “the quality of leadership at the centre of the chain has not been 38 good enough and the trusteeship has not been good enough”.

We challenged the Department about whether its oversight of academy sponsors had kept pace with the expansion of the academies programme. We asked witnesses if the 39 Department had taken an optimistic view of some sponsors’ capacity to grow. Ofsted told us that the Department had allowed some sponsors to expand “exponentially, without the 33 Qq 145 and 195 34 Qq 12-14; 92-98; C&AG’s Report, figure 9, para 3.18 35 Q 92 36 Q 154 37 Q 102 38 Q 181 39 Qq 146, 171 12 40 capacity to make the necessary improvements” at schools they took over. Currently, there are 18 sponsors that the Department is not allowing to grow further because of poor performance in some of their schools. These sponsors run 163 academies that currently 41 contain a combined total of 94,000 pupils. Two of the chains account for the majority of 42 schools affected: AET and E-Act, which in total run 108 academies. The Department could not explain why it had allowed these chains to become so big before pausing their 43 growth.

We heard about the importance of having an independent view of the effectiveness of academy sponsors. Ofsted currently inspects local authority school improvement services, but does not have the same power to inspect sponsors’ and academy chains’ central functions. We asked Ofsted whether it could get sufficient information about sponsors and academy chains from its focussed inspections of groups of schools that they run. The Chief Inspector of Schools told us that his preference was to have the same powers as he has for local authority school improvement services. He also said that he felt sponsors and chains might welcome the greater transparency that statutory inspection might bring, as it would 44 enable Ofsted to publish a clear inspection framework. 40 Q 157 41 Supplementary written evidence provided by the Department 42 Qq 166-167 43 Qq 166 - 171 44 Qq 99-100 13