Academies: making significant changes or closure by agreement

Academies must comply with the Department for Education’s guidance for trusts which are planning to make organisational changes, or close an academy by mutual agreement with the Secretary of State. This guidance has been in force since April 2024.

Sufficiency framework

As set out in the Education Act 1996, local authorities have a statutory responsibility to ensure there are enough school places available in their area for every child of compulsory school age. This is referred to as the ‘sufficiency duty’.

It is for local authorities, academy trusts and local partners to balance the supply and demand of school places, in line with changing demographics locally, increasing places to respond to need and reducing or repurposing where the increased need is no longer required.

The Department for Education has published trust quality descriptions, which sets out an expectation for trusts to work in collaboration with local authorities, as well as Regional Directors, to support their place planning responsibilities. In addition, academies should:

• Inform the local authority and Regions Group promptly of any changes affecting capacity – i.e. events that take school buildings out of use
• Act reasonably when responding to requests to raise or lower PAN and expand or contract where necessary
• Be transparent with local authorities and Regions Group about issues affecting their ability to deliver places and about any significant changes they are planning
• Undertake a fair and open local consultation on any significant changes they are proposing before submitting proposals to the department.

Making significant changes

Significant changes are those which may create, change or remove the number or type of school places or where they are offered, impacting the local school environment. It is vital that academy trusts comply with the significant change process, failing which a school would be considered to be in breach of its funding agreement. Some of the changes which will require a significant change application include:

• Expansion or removal of capacity by more than 30 places
• Expansion onto a satellite site, including special schools
• Age range changes
• Change of gender composition.

The expectation is that, so far as possible, additional new places will only be provided at schools that have an overall Ofsted rating of ‘good’ or ‘outstanding’, unless there are no other viable options. References to Ofsted ratings will no doubt need to be reviewed going forward.

Whilst previously, significant change applications were considered to be either ‘fast track’ or ‘full business case’, in accordance with the updated guidance there are three tiers for the application and assessment process.

Tier 1

The vast majority of significant changes will be categorised as “tier 1”. The significant change application form requests key information to determine the appropriate level of scrutiny required. Broadly speaking, where the change is proposed by a strong school in a strong trust, has local support, there are no valid objections from the local authority, and evidence supports the need to increase or rationalise places, the application will be processed promptly.

Tier 2

In some cases, risks or issues may be identified with a tier 1 application, and the application will be managed under “tier 2” pursuant to which the Department for Education will seek to address any specific areas of concern. A tier 2 application may proceed without the support of the relevant local authority and will be considered alongside factors such as evidence of parental demand for places.

No applications will start as tier 2 and there is therefore no separate application form.

Tier 3

Where the Department for Education requires more comprehensive information at tier 2, the significant change application will be escalated to “tier 3”. This has a separate application form which requires the provision of more detailed information. Whilst decision-making will remain within the Regions Group, it may be necessary to seek the view of the regional Advisory Board for discussion, or escalate the application to Ministers for decision.

Changes below the threshold

Where a change does not require a significant change application, academy trusts are still expected to ensure that their local authority is informed as early as possible as other consents may be necessary, or the change may mean that the academy’s admission arrangements need to be amended.

It is also highly likely that the academy’s funding agreement will need to be updated, which is always necessary where capacity is changing.

Next steps

Trusts are reminded to consider:

• Funding : are you satisfied that all required capital funding is confirmed and financial due diligence has been undertaken to determine the affordability of growth or rationalisation?
• Land consent: is Secretary of State involvement required?
• Trustee land: is consent required from another party for a change to be agreed?
• Admissions arrangements: do you need to submit an admissions variation request at the same time as the significant change application?
• Planning permission: if necessary, has planning permission been secured already, or can it be done alongside the significant change application?
• Equality impact assessment: have you complied with the Public Sector Equality Duty?

You should also keep in mind that consultation remains a key component of the significant change process, an any change requiring an application to the Department for Education will also need a public consultation. In most cases this should be conducted ahead of the application being submitted, but when applications need to be considered quickly, the Department for Education may agree to the application and consultation running concurrently.