As to work for lawyers, although presently there are only around 200 Free Schools in the UK, there will be many more in the future. This is for two reasons. First, there is a severe shortage of school places: the Department for Education (‘DfE’) has already allocated funding for 400,000 new places by 2018. Second, under the ‘Free School presumption’ introduced from 2012 by the coalition government, most new schools will be Free Schools (see section 6A of the Education and Inspections Act 2006). One sign of this changing picture is that, as a direct result of the Free School presumption, the New Schools Network sends near weekly emails to potential Free School proprietors concerning local authority proposals to open a new school in their area.

What are the hurdles?

Much of the process of setting up a Free School is itself highly practical (e.g. finding a site), and policy orientated (e.g. the application to the DfE in to open a Free School). There are, however, important legal hurdles along the way.

Governance

The first issue to address is the governance of the Free School. The proprietor of the Free School is the “Academy Trust”, which is a company limited by guarantee and is also deemed to be a charity by the Academies Act 2010. As with any company, the academy trust has members and directors, and the normal rules for conflicts of interest apply. Given that the academy trust runs the school, it is also important to draft the academy trust’s articles of association very carefully. In my view, the DfE’s model articles are eminently improvable.

As an aside, the demands upon governors of all types of school have increased in the last few years. An indication of this is that Ofsted now specifically focus on governance when inspecting a school. The governing bodies of Free Schools also have a series of responsibilities that maintained schools do not. For example, they directly employ their staff, hold the property rights to the land on which the school is based, and they are the admissions authority for the school. Consequently, the skills of lawyers are particularly useful for Free Schools because their governing bodies have responsibilities over such a wide area. Obviously, it helps if you have a specialism in public law, and education law in particular. But the particular skills held by barristers – getting through reams and reams of paperwork, distilling down what is important, and avoiding unnecessary distractions – are helpful for any governing body.

Consultations

Consultation is an area that has seen a great deal of litigation in recent years, but so far no legal challenge has been mounted to the consultation that is required of a Free School proprietor prior to opening. The courts have generally declined to intervene unless something has gone “clearly and radically wrong” with the consultation process. My prediction is that a Free School is only likely to be successfully challenged if they misguidedly concentrate in their consultation on peripheral matters (such as how the school should be run), and thereby fail to ask the statutorily required question: whether the Free School should be opened at all.

Planning permission

Formerly, one of the biggest practical barriers to opening a Free School was the acquisition of planning permission for the site on which the school was to open. However in January 2013 the government announced a package of measures which in effect removed most of the difficulties with planning permission: Free Schools may open in almost any building for a year without planning permission, and there is extra time to win the permanent planning permission required to remain in their buildings after that first year.

Funding agreements

The most serious legal problem that a proprietor of a Free School could face arises from a failure to adhere to their funding agreement. The funding agreement between the Free School and the DfE is the way in which the DfE imports the Free Schools’ obligations in respect of the curriculum, free school meals, the admissions code and many other matters that are required by dint of statute alone for maintained schools.

The DfE’s missive to the Al-Madinah School highlights the degree to which the funding agreement is central to the dealings between a Free School and the DfE. Indeed, the DfE’s model funding agreement provides extraordinarily broad powers to the DfE to terminate a funding agreement – and, so many might say, rightly so. It is worth noting that the DfE insists that the model funding agreement may only be deviated from in “exceptional circumstances”.

As the funding agreement between a Free School and the DfE is a contract like any other, it is relatively clear what the relevant principles are if the Secretary of State wishes to enforce the contract. The real “remedy” sought by the DfE in respect of the Al-Madinah School is termination of the funding agreement, but in principle, the DfE could also sue for damages, or exceptionally, specific performance. An untested but intriguing possibility is that a parent might seek to enforce an obligation in a Free School funding agreement. In contract, much would rest on the Contracts (Rights of Third Parties) Act 1999, and it is interesting to note that the DfE’s model funding agreement does not exclude the operation of that Act, as many commercial contracts do. Alternatively, a parent might judicially review a Free School, arguing that they had a legitimate expectation that the funding agreement would be adhered to. However, neither route has been tested in respect of an academy or a Free School.

There are pitfalls aplenty for those setting up a Free School, and many corresponding opportunities for the legal profession.

Thomas Ogg, 11 KBW

A version of this article first appeared in New Law Journal 1.11.13.