Businesses told to think again about academy sponsorship

Businesses are warned today by a group of financial experts to think again before sponsoring one of Prime Minister Tony Blair’s flagship academies.

A report from New Philanthropy Capital, a research group set up to advise potential sponsors how they can most effectively invest in education, concludes: “Academies are a risky business: they can and do fail.”

Its findings are a bitter blow for Mr Blair in the wake of the “cash for peerages” row which has seen former Downing Street adviser and headteacher Des Smith arrested for allegedly suggesting sponsors could obtain honours. He has denied the charge.

Ministers had feared potential sponsors would be put off by what the National Union of Teachers has described as the “cronyism and sleaze” surrounding the scheme – now they are also being advised they may also be making a poor investment.

Today’s report, which will be seen by would-be sponsors for the Government’s academies programme, says: “There is too little evidence to assess conclusively whether or not academies are a good investment for donors.

“But there is enough evidence to raise doubts as to their cost effectiveness.

“Academies show mixed results for their pupils.”

It acknowledges that the proportion of pupils achieving at least five A* to C grade passes in the academies is higher than in the predecessor failing schools but adds: “Some have been heavily criticised by Ofsted (the education standards watchdog) for failing to provide a satisfactory standard of education.”

Under the academies programme, sponsors are asked to pay £2million towards the cost of the new institution – while the Government pays up to £23million for a new building. Mr Blair plans to establish 200 by 2010.

In exchange for their donation, the sponsors get the opportunity to run the school through controlling the governing body and to determine what is included in the curriculum.

Today’s report also criticises the programme on grounds of cost – saying the total £25million for a new academy is £8million more than the cost of building a mainstream state school.

“Perhaps the most powerful criticism of academies is the £8million difference between the cost of building an academy and the cost of building a conventional school,” it adds.

“State-of-the-art buildings look good and teachers are very proud of them but there is scant evidence of the link between this capital investment and pupil attainment.

“Undoubtedly, the case for academies would be stronger if they did not cost so much to build.”

It points out that 27 failing inner city schools have been given a “fresh start” – with the existing school closed and opened with a new name and new staff – at a cost of £2.2million each. This compares with the £25million cost for each of the 27 academies that are up and running.

Martin Brookes, head of research at NPC, said: “Private donations should be encouraged. Well-targeted giving can transform opportunities and lives of disadvantaged pupils, helping to building self-confidence, motivation and basic skills.”

However, he added: “There simply isn’t enough evidence to make a conclusive assessment on whether academies are a good investment for donors.”

The report urges potential donors to consider alternatives – such as sponsoring breakfast clubs or out-of-hours clubs aimed at helping youngsters struggling to learn to read or write.

It points out that – for £2million – a sponsor could support after school clubs for 10,000 children.

Alternatively, if a sponsor were to donate the money to an anti-bullying charity such as Kidscape or ChildLine, it could pay for training 2,000 teachers in how to tackle bullying – potentially benefiting 60,000 children.

A spokesman for the Department for Education and Skills said it was “wrong” to say academies were poor value for money, adding: “We don’t recognise the £8million figure. “They cost exactly the same as similar sized schools,” he added.

The New Philanthropy Capital, whose trustees include ex-BBC chairman Gavyn Davies and Harvey McGrath, of the Man Group financial company, was set up to carry out research into charities and advise donors on where their money will be best used.