Board papers offer more insights into fundraising and financial challenges at Harris Federation

Harris Academy Peckham, which has spare places

Further insights into the financial challenges facing even one of England’s most successful and well-connected academy chains have been provided in board papers published by the Harris Federation, with one of its most high-profile schools having implemented a strategy to improve its “financial viability”.

The papers, marked “confidential” but nevertheless available on Harris’s website, see Lord Harris, the chain’s sponsor, warning at a meeting of its full board in December last year that “we will need to focus increasingly on tightening budgets over time”.

A look at some of the detailed figures in these papers provides insights into why Harris, which has comfortably the highest pay bill for its most senior managers of any academy trust, has not been immune from the financial difficulties facing schools as a whole.

They state how Harris faced an in-year deficit in 2016-17, which those board minutes from December 2017 said this was set to be £3.6 million. Harris’s annual income for that year was £168.3m

The deficit was higher than the figure of a £1.2m in-year gap which the chain had budgeted for, the paper stated. It was “mostly attributed to a £2.2m funding clawback”.

“Clawback” is money that the Department for Education takes back from trusts, having earlier provided funding to them based on predicted pupil numbers for future years in individual academies which then prove lower than predicted.

The board paper said that, nevertheless, the final position on the 2016-17 financial year would see Harris’s “academy reserves” standing at £2.3 million.

It then anticipated the position for the 2017-18 year, with the in-year deficit predicted to fall to £1.2 million. The paper added: “The overspend is due to a net clawback of £0.5m, much reduced compared to £2.2m in the previous year.

“The budget processing took into account the latest pupil numbers and offers for places, [sic] this has help [sic] reduced the funding clawback.

“£1.9m of contingency was put aside within the academy budgets to use in the event of clawbacks or other unforeseen issues, [sic] £1.4m still remained unspent in the first two months of the year.”

Pupil numbers

Pupil numbers in 2017-18 for the chain as a whole -excluding Chobham Academy in Stratford, east London, which is technically sponsored by Harris but part of a separate company – were also slightly down on the numbers “budgeted” for by the federation, the December 2017 board paper reveals.

“Pupil numbers are 28,114 based on October 2017 census against a budget of 28,490. Most of the variances are in the all through schools and Westminster Sixth Form,” the minutes state.

Several of the most recent minutes suggest the chain has faced particular challenges around its three schools in north Peckham, a disadvantaged part of Southwark, south London, and, perhaps surprisingly, in relation to Harris Westminster Sixth Form, its tie-up with Westminster School.

Minutes of a Harris finance sub-committee meeting, dated January 30^th, 2018, include a note headlined “Pupil recruitment issues and in-year deficits: Harris Academy Peckham, Harris Primary Academy Peckham Park and Peckham Free [school].”

This states: “SH [Sabeena Hasan, Harris’s “regional primary director”] presented an overview of the issues faced by these schools and the possible strategies to improve financial viability were discussed.”

As covered extensively on this website, Harris Academy Peckham, a secondary which was the second school to open under the chain, in 2003, has gone through some extensive restructuring in recent months under Hasan, including changing pupil subject options and closing the sixth form.

A note in the December 2017 main board minutes states: “DM [Sir Dan Moynihan, Harris’s chief executive] explained that the local authority have said there is a shortage of pupils in the Peckham area so our schools are working hard to market.”

However, my analysis of pupil roll data for January 2018 suggests this problem may be more specific to Harris than to other local schools.

Analysing all schools with an SE15 (Peckham) postcode in the Department for Education data, by comparing their January 2018 DfE census numbers against their published capacity, Harris Academy Peckham emerges with the most spare places of all SE15’s schools, having filled only 656 of its 1,200 places, meaning as of January it was operating at 55 per cent of capacity.

In fact, of the 18 state-funded schools in the postcode, Harris’s three* academies had three of the six schools with the most spare places based on these January 2018 census data. The north Peckham estates which all three Harris schools serve is known to be especially challenging, it should be acknowledged, and Harris Academy Peckham is one of only two state-funded secondaries in the SE15 postcode.

Minutes of a Harris finance sub-committee meeting on November 21^st, 2017 state: “Primary director to prepare a report addressing strategies to boost pupil recruitment in Peckham” and “DM [Sir Dan Moynihan] to request a report from the Peckham Academy Principal addressing the pupil recruitment issues.”

Harris Westminster Sixth Form was established with lavishly-funded buildings – a reported £45 million – around the corner from the Department for Education in 2014. It is highly selective, with a Times article from 2015 – interestingly still available on Harris’s website – asking “Could Harris Westminster be the most elitist school in the country?”

Yet the November 21^st 2017 finance meeting minutes stated: “DM [Sir Dan Moynihan] to in contact the Westminster principal [James Handscombe] to request a report detailing how the in-year deficit will be managed.”

And the January 30^th finance sub-committee minutes stated, under “Harris Westminster Sixth Form” that “Strategies to improve financial viability were discussed, including raising the fundraising drive to professional standard.

“TB [Tony Bayon, a Harris director] suggested contacting Coots’ HNWI division. Action: DM [Sir Dan Moynihan] to pass details about Coots to James Handscombe.”

I suspect that “Coots” is a mis-spelling of the name “Coutts” and that “HNWI” means “High Net Worth Individuals”.

In May I reported – in a piece followed up by the Guardian – how Harris Westminster had been advertising a “major gifts fundraiser”, tasked with bringing in £500,000-£1m a year from private donations.

However, the full board meeting minutes from December 2017 indicate that the benefits of philanthropy for this sixth form may already have been kicking in, with Moynihan reporting that “£500k has been raised this year for Harris Westminster.”

Insights into back-and-forth discussions with government

Finally, an insight into negotiations between this chain and the government was provided in the January 30h 2018 finance sub-committee minutes.

Under “potential schools in Lambeth,” south London, it was stated: “Chris Randall (Projects Consultant) joined the meeting to give a detailed update on two potential schools in Lambeth (a secondary and a sixth form). The Committee approved the taking over of both schools on the basis that the ESFA keep to the original funding proposal for the sixth form.

“Action: DM [Sir Dan Moynihan] to obtain the guarantee from the ESFA that the original funding proposal will apply.”

At a meeting of the same committee on March 6^th, 2018, under “update on new academies for September 2018, it was stated: “DM provided an update on the new academies scheduled to open in 2018/19 as well as future prospects.

“Committee felt it was important to continue to have a very robust due diligence when taking on new schools.

“Actions: DM to discuss mitigation with DfE when dealing with high risk schools.”

The December 2017 board minutes also stated: “DM said there maybe [sic] potential for a large primary academy to join next September, along with the previously announced Sutton and Wimbledon Secondary academies.” This, though, seems not to have happened: Sutton, Wimbledon and a sixth form in Croydon are the only Harris schools to have opened this term on the DfE’s database.

All very intriguing.

*One of the three Harris schools, Harris Primary Free School Peckham, had been open only six years as a free school, so had another year to be meant to be operating at capacity. Still, at only 74 per cent full after six years, it has a way to go and has relatively many spare places even if space in six year groups is considered.