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1 DELEGATED POWERS REPORT NO SUBJECT: Whitefield School: Conversion to Academy status Commercial Transfer Agreement, Lease and Tenancy at Will of the premises Control sheet All of the following actions MUST be completed at each stage of the process and the signed and dated report MUST be passed to the Governance Service for publishing All reports 1 Governance Service receive draft report Name of BGO Andrew Charlwood Date Governance Service cleared draft report as being constitutionally appropriate 3 Finance clearance obtained (report author to complete) 4 Staff and other resources issues clearance obtained (report author to complete) 5 Trade Union response received (Staffing issues only) 6 Legal clearance obtained from (report author to complete) 7 Policy & Partnerships clearance obtained (report author to complete) 8 Equalities & Diversity clearance obtained (report author to complete) 9 The above process has been checked and verified by Director, Head of Service or Deputy (report author to complete) 10 Signed & dated report, scanned or hard copy received by Governance Service for publishing 11 Report published by Governance Service to website Name of BGO Andrew Charlwood Date Name of Fin. officer Kerry-Anne Smith Date Name of Res. officer Deborah Shaw Date Name of TU rep. Not applicable Date Name of Legal officer Joanna Kromidias Date Name of P&P officer Andrew Nathan Date Name of officer Andrew Nathan Date Name Robert McCulloch-Graham Date Name of BGO Chidilim Agada Date 24/08/11 Name of BGO Chidilim Agada Date 24/08/11 Officer reports: 12 Head of Service informed report is published and can be implemented. Name of BGO Date Chidilim Agada 24/08/11 Cabinet Member reports: 13 Expiry of call-in period Date Not applicable 14 Report circulated for call-in purposes to Name of BGO Not applicable Business Management OSC members & Date copied to Cabinet & Head of Service Date
2 ACTION TAKEN BY CABINET MEMBER(S) UNDER DELEGATED POWERS (EXECUTIVE FUNCTION) Subject Cabinet Member(s) Whitefield School: Conversion to Academy status Commercial Transfer Agreement, Lease and Tenancy at Will of the premises Cabinet Member for Education, Children and Families Deputy Leader of the Council and Cabinet Member for Resources & Performance Date of decision 22 August 2011 Date decision comes into effect Summary Officer Contributors 22 August 2011 Whitefield School has been approved by the Secretary of State to convert to an Academy. As part of the conversion process, a Commercial Transfer Agreement must be signed by the Local Authority, which includes information relating to: (i) any employees of the Council or the Governing Body who are assigned to the School and who will transfer from the employment of the Governing Body or the Local Authority to the new Academy Trust; and (ii) assets and contracts which will transfer from the Local Authority or the Governing Body to the new Academy Trust, together with other rights and obligations of the Council or the Governing Body. This report also sets out the terms for the grant of an Academies lease of the school premises and a Tenancy at Will of a small part of the site as part of the conversion process. George Church, Principal Valuer, Property Services, Commercial Directorate Deborah Shaw, HR Manager, Human Resources Elaine Tuck, Strategy and Planning Manager (Acting), Children s Service Status (public or exempt) Public
3 Wards affected Golders Green Enclosures Appendix Drawing Number 24220/1 (Lease Plan) Drawing Number 24220/2 (Tenancy at Will Plan) Reason for exemption from call-in (if appropriate) Not applicable Contact for further information: Elaine Tuck, Strategy and Planning Manager (Acting), Children s Service , elaine.tuck@barnet.gov.uk Serial No. 1386
4 1. RELEVANT PREVIOUS DECISIONS 1.1 Cabinet Resources Committee, 19 July 2010, Conversion of Schools to Academy Status Transfer of Land delegated authority to the Cabinet Member for Resources and Performance to approve, subject to relevant legislation and any title issues, the grant of long leases or to make freehold transfers of school property assets to any school converting to Academy status. 1.2 Delegated Powers Report 925 Whitefield School Trust Status. 2. CORPORATE PRIORITIES AND POLICY CONSIDERATIONS 2.1 The Corporate Plan priority A Successful London Suburb has a strategic objective to Ensure every school is a good school for every child. The granting of academy status to those schools that wish to convert will ensure that schools in Barnet remain popular and successful. 3. RISK MANAGEMENT ISSUES 3.1 If the Commercial Transfer Agreement is not signed, the school cannot become an Academy. 3.2 There is a risk that regeneration plans for the Cricklewood Brent Cross area, could be prejudiced if the land arrangements made as part of the Academy conversion process do not provide for the re-location of Whitefield School. More detail on the arrangements that will be put in place is given in section 5 below. 3.3 If arrangements are not put in place for a land transfer or a Tenancy at Will of the premises, the school cannot become an Academy. Property-related risks are covered in more detail in section 5 below. 3.4 Finance-related risks are addressed in section 5.2 below. 4. EQUALITIES AND DIVERSITY ISSUES 4.1 The signature of the Commercial Transfer Agreement and the Lease of the premises will not give rise to any issues under the Council s Equalities Policy and do not compromise the Council in meeting its statutory equalities duties. 5. USE OF RESOURCES IMPLICATIONS (Finance, Procurement, Performance & Value for Money, Staffing, IT, Property, Sustainability) 5.1 Finance Local Authorities are not involved in the decision as to whether a school becomes an Academy; this is a matter for the Secretary of State for Education. The local authority s central schools budget will be reduced for every school that chooses to become an Academy. This requires the Council to undertake a review of functions currently funded from centrally retained budgets. Should academies decide not to buy back services, some services currently funded via the centrally retained budget may need to be reduced, with a consequential reduction in staff. The government has stated however,
5 that the process of recoupment is being reviewed and a new process will be announced to commence as of April There is currently resourced provision for children with physical disabilities at Whitefield for ten places, reducing to five places in September When the school becomes an academy, delegated funding for the resourced provision will become part of the academy General Annual Grant (GAG). The Local Authority will have less control over the Resourced Provision places. To mitigate this risk, a separate contract will be drawn up between the new Academy and the Local Authority regarding resourced provision. This contract will be referenced in the Commercial Transfer Agreement. 5.3 Whitefield School is a member of Barnet s Excellence in Clusters group of schools and as such receives additional Excellence in Clusters funding. Due to increased membership of the group, funding is being voluntarily reassigned within Barnet so as to be redistributed among all members. When the school converts to academy status, it will receive its portion of Barnet s Excellence in Clusters funding directly from the Department for Education. The school has agreed to continue this reallocation of Excellence in Clusters funding for the next two financial years, 2012/13 and 2013/14, and the arrangement will be reflected in the Commercial Transfer Agreement. 5.4 Property As a National Challenge Trust school a state-funded foundation school - the land associated with Whitefield School would usually be held by the School Trust. In this case the process of transferring land to the Trust has not yet been completed, and the land remains vested in the Local Authority. As freeholder of the school land, the Council is required to transfer the land to the new Academy. Under the Academies Act 2010, the land and premises occupied by the school at Claremont Road, Cricklewood, NW2 1TR will be transferred to the Academy Trust on a 125 year lease at a peppercorn rent. 5.5 A small part of the school site on its north western boundary, owned freehold by the Council is leased to Toys R Us Properties Ltd as part of their site, but has been leased back to the Council, taking effect as an underlease. This underlease is due to expire on 14 December 2111, prior to the expiry of the 125 year term of the proposed Academy lease. When the head-lease granted to Toys R Us Properties Ltd expires on 16 December 2111, the land will vest with the Council as freehold owner. 5.6 As a consequence, it has been agreed that the Council will grant an Academy lease of the school premises edged red on Drawing Number 24220/1 and a Tenancy at Will of the area edged red on Drawing Number 24220/2, pending consent from Toys R Us Properties Ltd to the proposed underletting of this area. Once consent is received, the Council will be in a position to negotiate terms for the grant of an underlease. The documentation will need to include provision for community use of the two All Weather Pitches at the back of the school. 5.7 The land on which Whitefield School is situated will be required to facilitate the Cricklewood Brent Cross regeneration programme. When this takes
6 place, the developers must first re-provide the school on an alternative site. When Whitefield School became a Trust the land was to transfer to it on condition that there was a formal exchange of the current school land as part of regeneration. This condition will be written into legal agreements as part of the Academy conversion process to ensure that Whitefield s conversion to Academy status does not prejudice the regeneration programme. Restrictions on sub-letting of any part of its land by the school will also be included in legal agreements and the school will only be permitted to sub-let the two existing sports pitches as detailed in paragraph 5.9 below. 5.8 A small area of the school premises is used by the Community Links programme. This is an initiative to provide services from various agencies such as language tuition, and parenting classes for the local community. The manager of the programme is a member of the school s staff. Such use is permitted by the Academies legislation and the use does not present any risk to the ability of the school to be relocated as part of the Brent Cross regeneration scheme. 5.9 The principal terms for the Academy lease, which are proscribed by the Department for Education are: Lease terms Landlord Tenant Details The London Borough of Barnet The Whitefield Academy Premises See Drawing 24220/1 Term Rent Repairs Alterations Statutory obligations Use Alienation 125 years One peppercorn if demanded To keep the property in a state of good and substantial repair and condition and to renew, maintain and replace the same to comply with this obligation Landlord s consent not to be unreasonably withheld to the erection or alteration of any structures To comply with all laws affecting the property their physical condition and the user of them Not to use the premises otherwise than for the purposes of the provision of educational services by the tenant and for community, fundraising and recreational purposes which are ancillary to this use. The tenant may share occupation of part of the property with a body or individual providing services or facilities which are ancillary to the uses referred to in the user clause. Not to assign or transfer any part or parts of the whole property. The tenant is permitted to assign or transfer the whole property to a successor charitable or public body where
7 the Secretary of State has given approval to such assignment Not to underlet any part or parts or the whole of the property, except that landlord s consent to sub let the two existing sports pitches will not be unreasonably withheld. This sub letting is to have a break clause to match the relocation provision for the school. Insurance The security of tenure provisions of the Landlord and Tenant Act 1954 are excluded Re-provision of the school on another site Notice period for reprovision of the school To keep the Property insured with a reputable insurance company against loss or damage by the Insured Risks in the sum the Tenant is advised represents the Reinstatement Value of the Property from time to time; Excluded A break clause in the lease and a clause enabling the reprovision of the school elsewhere will be required. The school is to covenant to move to another site developed as a secondary school with access to sufficient playing facilities. The size of the site of the school and its built area may be varied on condition that premises are provided reasonably suitable for secondary school use. A reasonable period of notice is to be given to the school by the developers, concerning its relocation. The leases to include such other terms or variations of the principal terms as may be deemed appropriate by the Assistant Director Legal and agreed by the School The proposed Terms of the Tenancy at Will are: Terms of the Tenancy at Will Landlord Tenant Details The London Borough of Barnet The Whitefield Academy Premises See Drawing 24220/2 Term Rent Repairs Alterations Statutory obligations Use At the will of the landlord and the tenant One peppercorn if demanded To keep the property in a state of good repair and condition Not permitted Tenant to comply Not to use the premises otherwise than for the purposes of the provision of educational services by the tenant and
8 for community, fundraising and recreational purposes which are ancillary to this use. Community use provisions will apply. Alienation Insurance Not permitted To reimburse the landlord cost of insuring the premises Staffing As a foundation trust school, all staff at the school are employed by the governing body and not by the Local Authority. When Whitefield School becomes an Academy there are therefore no staffing implications for the council. Staff will be employed by the Academy Trust and the responsibility for enacting this transfer rests with the governing body Pensions Non-teaching staff in a maintained school converting to academy status either belong to or are entitled to belong to the Local Government Pension Scheme (LGPS) and have their pension dealt with by the Administering Authority applicable to schools in that Local Authority. Academies are separate scheme employers under the LGPS. Academies are 'scheduled body' employers, being listed in Part 1 of Schedule 2 to the LGPS Administration Regulations 2008 [SI2008/239] (as amended). They are not 'admitted bodies' Academies funding agreements require them to offer LGPS membership to all non-teaching staff. Where maintained schools apply to convert to Academies under section 3 of the Academies Act 2010 and an Academy order is made under section 4, those existing staff who are already members of the LGPS by virtue of the Administration Regulations would not be affected by the conversion. Their membership of the LGPS would continue unaffected. After conversion, new non-teaching staff will be eligible to join the LGPS and will be automatically enrolled in the Scheme when employed. Whatever arrangements apply currently for remitting contributions as a maintained school, the academy will itself be responsible for remitting employer and employee contributions to the council as the Administering Authority for Barnet s Local Government Pension Scheme Fund.
9 5.14 Teaching staff in a maintained school converting to academy status either belong to or are entitled to belong to the Teachers Pension Scheme which is administered nationally by Teacher Pensions. On conversion to Academy status their membership will continue unchanged. All newly employed Teaching staff will also continue to have entitlement to join the Teaching Pensions Scheme. 6. LEGAL ISSUES 6.1 Under the Academies Act 2010 (the Act) section 3, the governing body of a maintained school in England may apply to the Secretary of State for an Academy order to be made in respect of the school. Section 4 of the Act provides that the Secretary of State may make an Academy order in respect of a maintained school in England, if the governing body of the school make an application under section 3. An Academy order in respect of a school is an order for the purpose of enabling the school to be converted into an Academy. If an Academy order is made in respect of a school, the Secretary of State must give a copy of the order to: (a) the governing body and head teacher of the school, and (b) the local authority. 6.2 As addressed in the body of the report, as part of the conversion process, a Commercial Transfer Agreement must be signed by the Local Authority, the Governing Body of the School and the Academy Trust, which includes information relating to: (i) any employees of the Council or the Governing Body who are assigned to the School and who will transfer from the employment of the Local Authority or the Governing Body to the new Academy Trust; and (ii) any assets and contracts which will transfer from the Local Authority or the Governing Body to the new Academy Trust, together with other rights and obligations of the Council, the Governing Body, or the Academy Trust. 6.3 Section 13 (Schedule 1) of the Act makes provision about land transfers to the Academies. The Act refers to transfer of land pursuant to one or more directions from the Secretary of State. Under the Act, references to a transfer of land are to the transfer of a freehold or leasehold interest in the land or to the grant of a lease in respect of the land. With respect to leasehold transfer, the land will be leased to the Academy Trust on a 125 year lease for a peppercorn rent. As detailed in paragraph 5.5 above, a small area of the site will be demised under a Tenancy at Will. 7. CONSTITUTIONAL POWERS 7.1 Constitution, Part 3, Responsibility for Functions, Sections 3.2 and 3.3 detail the powers of Cabinet Members which includes to the power to discharge the executive functions that fall within their portfolio. 7.2 Cabinet Resources Committee on 19 July 2010, Conversion of schools to Academy Status Transfer of Land delegated authority to the Cabinet Member for Resources and Performance to approve, subject to relevant legislation and any title issues, the grant of long leases or to make freehold
10 transfers of school property assets to any school converting to Academy status. 8. BACKGROUND INFORMATION 8.1 Whitefield School is currently a Trust school, which means it is a state-funded foundation school. The governing body has applied to become an Academy, under the provisions of the Academies Act The Secretary of State has approved the school s application and the school is aiming to convert on 1 September In order for the school to convert, the school has instructed their legal firm to complete the necessary documents and agreements. To this effect, the Council will receive a Commercial Transfer Agreement (the Agreement) from the Solicitor acting for the School, which must be signed by the current Governing Body of the school, the new Academy Trust and the Local Authority. 8.3 Commercial Transfer Agreements are intended to ensure that all information on the staff who are transferring to the academy is recorded and transferred to the Academy Trust so that the appropriate arrangements for payment of salaries, pension contributions, etc. can be made. They also include details of any assets or contracts that will transfer to the Academy Trust. Commercial Transfer Agreements are based on the model provided by the Department for Education. As Whitefield School is a foundation trust school, no staff are employed by the Council and therefore much of the model agreement is inapplicable to the council in this case. Agreements also include confirmation that the Academy Trust will pick up the Local Government Pension Scheme liabilities, with respect to staff transferring from the Governing Body to the Academy Trust. 8.4 The transfer of staff, assets and contracts is the principal purpose of the Agreement, and the Council does have certain other rights and obligations, mainly in relation to any balance remaining from the School's budget following completion of due accounting procedures. 8.5 With respect to the transfer of assets, under the Agreement, the Council and/or the Governing Body (as applicable) will transfer (or to the extent that it is not the owner thereof shall procure the transfer of) the legal and beneficial interest in the Assets (as defined in the Agreement), free of charge and free from any encumbrance, to the Academy Trust. As the school is a foundation trust school, no significant assets or contracts are held by the Council, so the obligation to transfer assets/contracts to the Academy Trust mainly applies to the Governing Body in this case. 8.6 So far as contracts, to which the council is a party and which benefit Whitefield School, are concerned, such contracts will be transferred/novated, as relevant. 8.7 The Council is the current freeholder of the school premises at Claremont Road, Cricklewood, NW2 1TR and is therefore required to transfer the premises to the school in order for Whitefield s to become an Academy. The
11 Premises will be transferred on a prescribed Academies lease, the terms of which are set out in paragraph 5.9 above. A small part of the site will be demised under a Tenancy at Will, the terms of which are set out in paragraph 5.10 above. 8.8 It should be noted that the two All Weather Pitches at the back of the school are owned by the Council and used by the school during school hours. The school also manage the letting of the pitches outside school hours. The pitches have not been refurbished since being built many years ago and work is urgently required to enable their continued use. The school are intending to sub let the pitches to a commercial sports operator who will refurbish them and hire them out on a commercial basis for community use outside school hours. In accordance with the terms of the Academies lease, the school will apply to the Council for consent to the sub letting and for any physical alterations to the school property arising from the sub letting. 8.9 There is currently resourced provision for children with physical disabilities at Whitefield. A separate contract will be drawn up between the new Academy and the Local Authority regarding resourced provision. This contract will be referenced in the Commercial Transfer Agreement. 9. LIST OF BACKGROUND PAPERS 9.1 None 10. DECISION OF THE CABINET MEMBERS We authorise the following action (1) The signing of the Commercial Transfer Agreement (2) The grant of an Academy lease of the school premises edged red on Drawing Number 24220/1 on the principal terms set out above and (3) The grant of a Tenancy at Will of the area edged red on Drawing Number 24220/2 on the proposed terms set out above pending consent from Toys R Us Properties Ltd to the negotiation of a separate underlease for this area. Signed Andrew Harper Cabinet Member for Education, Children & Families Date 22 August 2011 Signed Dan Thomas Deputy Leader of the Council and Cabinet Member for Resources & Performance Date 22 August 2011
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