Guidance

Pupil referral units: converting to alternative provision academies

What pupil referral units (PRUs) interested in becoming alternative provision (AP) academies should do.

Pupil referral units (PRUs) teach children who aren’t able to attend school and may not otherwise receive suitable education. This could be because they have a short- or long-term illness, have been excluded or are a new starter waiting for a mainstream school place.

PRUs that convert to academy status become alternative provision (AP) academies. PRUs can convert on their own, as part of a chain of academies, or with the support of a sponsor.

Registration

You should complete the online registration form and someone from our AP academies team will get in touch. This person will be your project lead and take you through the conversion process. If you want to convert as part of a chain with other PRUs, each unit will need to fill in a separate registration form.

Application

Your management committee then has to vote on whether to convert. If you vote yes, the next step is to complete the PRU application form.

Again, if you’re part of a chain, each PRU will fill in a separate application form, and include the names of the PRUs involved.Whether you plan to convert individually or as part of a chain, your application will need to include evidence of:

  • your capacity to improve achievements that support learning, such as improvements in behaviour, overall attendance, reduction in persistent absence and exclusion rates
  • what happens to pupils after their time in alternative provision, and how, where appropriate, you help them back into mainstream education
  • strong leadership, and how you will take on the extra responsibilities of academy status such as HR and contract management
  • how you tailor your approaches to individual pupils’ needs

You will also need to show:

  • your 2 most recent Ofsted reports
  • attainment and progression data
  • details about your PRU, for example the categories of pupils you cater for
  • information on your plans to consult with interested parties on becoming an academy
  • information about your buildings and land ownership
  • historic and predicted budgetary information
  • bank details so we can pay your start-up grant

If your application meets these criteria, the Secretary of State will approve it in principle and issue an academy order, and you can begin the formal conversion process.

Academy trust

When you have received your academy order, you will need to set up your academy trust. An academy trust is a charitable company limited by guarantee, made up of members and directors. The directors will also be the governors of the AP academy. They will be responsible for its day-to-day management and governance (replacing the PRU’s management committee).

The members of the trust will be its legal owners and have overall control over the company and the way the academy is run. Normally there should be 3 founding members of the academy trust.

Before setting up the trust, you (or your solicitor) will need to fill in the model memorandum and articles of association for converting PRUs.

The memorandum sets out the name of the trust and its founding members. The articles of association set out the arrangements for the management, governance and running of the academy trust.

You should send these to your project lead and, once they’ve been approved, you can register your trust with Companies House and set up a new bank account. There is a fee for this, but you will get the money back from your conversion grant.

Land and buildings

Your solicitor will help you complete the PRU-specific land questionnaire, and will submit it to your project lead for approval. If you are a multi-site PRU, you will need to complete a questionnaire for each site.

Your academy trust, local authority, and any other parties should agree the leasing arrangements for PRU land and buildings. These must be in place before you sign your funding agreement. If the land transfer involves a sub-lease, you will need to submit it to your project lead for approval.

Funding agreement

The funding agreement is the contract between the Secretary of State and your academy trust and is the method by which we hold all academies accountable. It sets out terms for funding, how the academy is run, its duties and the powers the Secretary of State has over your academy. The funding agreement makes references to legislation to ensure that academies operate in a similar way to other state-funded schools.

You (or your solicitor) should submit your draft funding agreement to your project lead at the same time as you submit your draft memorandum and articles of association, and land questionnaire.

You can download a model funding agreement.

Consutation

Section 5 of the Academies Act 2010 requires your management committee to consult with interested parties about becoming an academy before the funding agreement is signed, but it is up to you when it starts and how long it lasts.

Staff transfer

The academy trust needs to take over as the employer, so the local authority will need to start the formal Transfer of Undertakings (Protection of Employment) Regulations (TUPE) process. This process ensures that all information on the staff who are transferring to the academy is recorded and transferred to the trust.

Pensions

When you are an AP academy, your trust will be responsible for staff pensions, even if your local authority continues to act as payroll provider. The occupational pension schemes are the local government pension scheme (LGPS) for non-teaching staff and the teachers’ pensions scheme (TPS) for teaching staff.

The TPS is managed by Capita Teachers’ Pensions. You should contact them as soon as your academy order has been signed to let them know that you are in the process of converting. More information is on the Teachers’ Pensions website.

Your funding agreement requires you to offer LGPS membership to all non-teaching staff. Existing staff who are already members of the LGPS will be unaffected and their membership will continue. After conversion, any new non-teaching staff will be eligible to join.

Contact details

Teachers' Pensions Academies Team

Commercial transfer agreement

Your academy trust and local authority will need a commercial transfer agreement (CTA) so that contracts, liabilities and assets are recorded for both the local authority and academy trust. You can download a model version of a CTA document, which includes examples of these transfers.

Insurance

Your academy trust will be responsible for insurance and you must be insured from midnight on the date of conversion.

Your insurance must cover:

  • premises and contents – at replacement cost, against damage by subsidence, fire, lightning, explosion, storm, flood, riot, malicious damage, terrorism and similar risks
  • business interruption
  • employer’s liability and public liability insurance
  • any statutory motor transport insurance

More information on insurance is available.

Staff and pupil data

You must tell the Information Commissioner’s Office (ICO) in writing that your academy is opening and will be responsible for processing staff and pupil data. The information you give will be added to the Information Commissioner’s register, which is open to the public. A fee of £500 is payable to the ICO, but you will get the money back from your conversion grant.

Exam centre

You can continue to use your existing exam centre number after conversion. You should contact the National Centre Number Register to let them know your change of status to an academy, and any change of name.

This will mean all awarding bodies will then be aware of the change and you won’t need to contact each one separately.

Contact details

OCR: National Centre Number Register queries

Financial systems

You should decide whether your existing financial systems and staffing arrangements can cope as you convert to an AP academy. The greater independence that academies have means that as well as the day-to-day processing of income and expenditure, you will have to produce management accounts, cash flow reconciliations and balance sheets. You may be able to apply for funding to support a business manager to help.

Existing contracts

Look at the contracts you have with external suppliers and your local authority, for services such as catering, cleaning, security, and ICT. If you want to keep a contract with an existing supplier, discuss with them how to transfer it to the academy trust. Software licenses will also need to be renewed or transferred to the trust.

Disclosure and Barring Service

All members of staff, governors and directors of the trust must have a current Disclosure and Barring Service (DBS) check before being appointed. Any check on the chair of governors must be sought through your project lead and countersigned by the Secretary of State.

Funding

Education Funding Agency (EFA) will provide your trust with an indicative funding pack, which includes a breakdown of the funding you will receive. EFA will usually issue this pack a month before you open as an academy.

More information on how academies are funded is available from ‘Academy funding: information for converting schools’ guidance.

Conversion grant

Schools converting to academy status receive a £25,000 grant towards legal expenses and other costs, but PRUs working from more than 1 site may need more legal support to get through the process.

Grants for PRUs:

1 site £25,000
2 sites £30,000
3 to 4 sites £35,000
5 or more sites £45,000

If your application to convert is approved, this grant will be paid to your nominated account after your academy order has been issued.

Advance of payment

Up to March 2015, EFA can give you an advance in your first year that is equal to your projected local authority top-up funding. Your project lead will be able to advise you. You will need to pay this money back to EFA by March 2015.

If you’d like an advance, you will need to provide a short business case based on the EFA guidance on advance funding.

More information on advance funding is available from EFA.

Contact details

EFA academy questions

For all academies and free schools with queries for the Education Funding Agency

Business manager grant

You can apply for a grant to fund a business manager up to March 2015. The amount of grant will be based on the size of the former PRU, and addresses the fact that many PRUs will now have to pay for finance staff to do work that was previously carried out by the local authority.

Also, smaller PRUs and those that cater only for permanent exclusions might not have had time to build relationships with schools that want places in the PRU.

To address these issues, a tapered grant, based on the size of the PRU, is available to AP academies to fund a business manager for the period up until March 2015.

Grants for business managers:

PRUs with fewer than 20 places £8,750
PRUs with 20 to 49 places £17,500
PRUs with 50 to 79 places £26,250
PRUs that have 80 places or more £35,000

If you’re converting as part of a chain each PRU will get a grant, which can then be pooled within the chain.

Signing your funding agreement

When all the legal documents relating to governance, land, property, staff transfer and company registration are in place, and you’ve finished your consultation, you will be ready to sign your funding agreement and open as an AP academy. Your staff will formally transfer from the local authority to the academy trust.

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