Ark Schools: paying our cleaners the London Living Wage would harm our students

Ark Schools, the major academy trust set up by hedge fund executives, has said it cannot currently afford to pay its cleaners the London Living Wage, suggesting that to do so would damage the education of its pupils.

A statement sent by the 37-school chain, most of whose academies are in the capital, implies that there is a trade-off between cash spent on its support staff and that allocated for its pupils’ education, with its wealthy trustees and benefactors currently unable to help out on the former front through donations.

The response came after Education Uncovered reported that cleaners at Ark Globe Academy in Southwark, south London, have only been receiving statutory sick pay of less than £20 for their work – which their union says stands to put lives at risk during Covid-19 – and the UK-wide minimum wage of £8.72 an hour.

These terms and conditions had come via an outsourced cleaning company which is employing the workers, called Ridge Crest. All the cleaners are from black and minority ethnic and/or immigrant backgrounds.

Ark’s statement comes despite Ark Schools’ latest accounts showing that Ark Globe Academy had reserves of nearly £1 million in 2018-19, while its central headquarters function reported £6.6m reserves.

Some of my questions, and Ark’s reaction

I put it to Ark that it seemed concerning that those cleaning the trust’s schools – which is currently, of course, given Covid-19 an extra-important and potentially dangerous role -  were not being paid the London Living Wage, of £10.75 per hour. This is backed by the Mayor of London and reflects the capital’s high living costs.

Ark had previously told me that “despite stretched school budgets, Ark is working with its contractors to find ways for them to pay their employees the Real Living Wage; those reviews are ongoing and it’s hoped they will be satisfactorily concluded soon”.

I asked a string of follow-up questions including how many Ark academies Ridge Crest were contracted to clean, how many people working within Ark schools were currently paid below the London Living Wage, and how the trust reacted.

The trust’s response suggested it would be impossible to move staff who were not already on it onto the London Living Wage this academic/financial* year, because of an implied trade-off between support staff and budgets for pupils’ education. It suggested, however, that this might change from next year.

It said: “Adjusting contract costs so contractors can move their employees from the minimum wage onto the Real [London] Living Wage adds a significant additional cost to already stretched school budgets. We therefore must take a phased approach to making these adjustments to ensure that schools can budget for this additional cost over time. Contract reviews are ongoing.

“Ark Globe’s contract moved to Ridge Crest [seemingly earlier this year, though precise dates have not been provided] after its annual budget had already been allocated. Until the beginning of the next school financial year, any change to costs would result in funding having to be diverted from elsewhere within the school budget and this would have a direct impact on resources available for students.

“The school is working on plans so that the cleaning company employees can be moved onto the London Living Wage in the next financial year.”

Ark, or Absolute Return for Kids, a charity which oversees its academy chain Ark Schools, was set up in the early 2000s by a group of people from the financial sector. Two leading lights of the current operation are Sir Paul Marshall and Ian Wace, of the Marshall Wace hedge fund, whose combined wealth was put at more than £1.2 billion in this year’s Sunday Times Rich List.

I put it to Ark that many would find it depressing to contrast the personal fortunes of its trustees– another is the former Conservative Party treasurer Lord Fink, whose wealth was estimated at £160 million by the Sunday Times – with the chain presiding over contracts which paid cleaners such low wages. Ark Schools does receive funding from donors, in addition to its core budget from the state.

Ark responded: “School cleaning has to be paid for by the school budget. Ark is an education charity, [sic] it would not to appropriate to use charitable donations given for the purpose of improving educational outcomes to pay for anything else.”

This suggests that money had been given to the chain strictly for the purpose of raising “educational outcomes”, which is usually translated as boosting test and exam results for pupils, and that money for cleaners did not come into this category. It would be interesting to see how such donations have been worded.

I also asked whether all Ark academies now had a cleaning contract with Ridge Crest, or only some. Ark told me: “The majority of [our] schools use external cleaning contractors, [while] 10 have in-house cleaners. Ridge Crest provides services to six schools.”

This website’s original story had highlighted the issue of sick pay, with the union United Voices of the World (UVW) arguing – seemingly plausibly – that the fact that workers were being paid the statutory minimum of £19.17 per day when sick could potentially put lives at risk by forcing cleaners to choose between their health and their livelihoods.

I asked Ark whether any contractors were eligible for payment beyond statutory sick pay during the Covid-19 crisis. There was no response on the issue of sick pay from the charity, including following a reminder email.

Ark had said to me, in advance of the first story, that: “The safety and welfare of all Ark staff, students and onsite contractors is paramount, it is something on which no Ark school would compromise.”

However, its statement does suggest there is a trade-off, between the “welfare” – via terms and conditions, and arguably also with reference to the “safety” – of contractors and the budgets it has for pupils’ education.

Perhaps in contradiction to this, UVW told me this week that it had received messages of support, after the original controversy broke, from National Education Union representatives and officials, whose teacher members at Ark of course are paid via its education budgets.

Similar controversies have broken out at several London universities in recent years, with academics and students at, for example, the London School of Economics and King’s College London having expressed support for cleaners who had been paid below the London Living Wage via outsourced contracts. UVW tells me that such contracts were subsequently taken back in-house.

Ark’s finances

As I reported in 2018 in a story which led the front page of the Observer, Ark had reported a £4.1m operating deficit in 2016-17, with seven schools disclosing deficits for that year.

Accounts for 2018-19 showed this turning round so that there was an operational surplus that year of £3 million, although eight schools were in deficit, with the accounts documenting “pressures in the external funding environment especially in the light of increased costs of pension contributions for the Teachers’ Pension Scheme and Local Government Pensions schemes combined with the proposed [pay] increases for main scale and trainee teachers”.

The 2018-19 accounts also showed that Ark Schools received £5 million in donations that year – with £47,000 of this going to “unrestricted general funds” and the remaining £4.969m classed as “restricted general funds” – so donations for a particular purpose. This was down from a combined total of £7.7 million the previous year. Ark Schools had also received a total of £2 million from its parent charity, Ark itself, across the two years.

A note to the 2018-19 accounts also says that Ark Schools received donations totalling £2.26 million from Ark “for our projects team and core costs”. Whether any of this money could have found its way to supporting cleaning costs, in a time of crisis such as this, is unclear.  

The 2018-19 accounts also state that Ark Globe Academy had reserves in its revenue account – non-capital spending – of £862,000 that year, plus £70,000 in capital reserves. “Ark Schools Central” – seemingly its central headquarters, reported revenue reserves of £6.6 million.

Union response

Petros Elia, an organiser and executive team member at UVW, told me: “What Ark is doing is pitting support staff against its students: it’s presenting the budget as a zero-sum game in which one side has to lose. If they think that paying their cleaners a living wage would get in the way of providing their students a decent education, they need to rethink their entire structure and business model.”

As Education Uncovered reported, the union has warned of legal action in this case, which prompted two days of “wildcat” strike action earlier this month. Elia said it was moving towards a ballot of members at Ark Globe Academy on further industrial action.

Our story had also reported conversations which appeared to be between a manager from Ridge Crest and one of the workers at the school in which the former says that cleaners would have more chance of receiving a face mask if they walked away from their union.

Elia said the masks had since been provided, although he said these were of “questionable quality”.

Follow-up investigations

-I have been trying - including via seeking to look into outsourced contracts - to see if/confirm that such pay and conditions arrangements apply more widely across the academies sector, and more widely still across the entire schools sector. I would be very interested to hear from readers with any thoughts and evidence on this question.

*In the academies sector, the academic and financial years are the same, running from September 1^st to August 31^st.