Category: Education

Will shareholder incentive survive rewrite of business plan?

In a document entitled ‘Sutton Education Services New traded services offers for Maintained Schools and Academies Autumn 2016 to Summer 2017’,  issued by Sutton Council, it specifies that schools and academies that are members of the joint venture company will be charged slightly less than those that are not.

For example, the cost of a session for Educational Psychologist support is set out at £247 per session for the member organisations and £285 for the non-member organisations.

When Sutton Council was working to launch its latest company, now called Cognus Limited, offering a discount to schools if they signed-up as shareholders, was perhaps considered an incentive to become part of the new enterprise.

It is not clear what influence this offer had on potential shareholders; around 30 schools and academies expressed an interest in the company and around two thirds actually paid up the £10 and signed the documentation.   But some people within the education community in Sutton were not convinced that the offer was sustainable for the company from an economic and marketing standpoint.

What emerged at the Sutton Shareholdings Board held on 20 September 2017, is that the newly appointed Managing Director will be re-working the business plan to be more realistic.  This begs the question whether the offered discount for shareholder schools will survive the rewrite, or whether, in order to deliver a credible business plan, and maintain market competitiveness, the company will have to charge all schools and academies the same rate for services offered.

Local girls’ school consulting on joining a Multi Academy Trust

Carshalton High School for Girls (CHSG)  is consulting on joining the Nonsuch and Wallington Education Trust  (NWET).   Consultation documents are available on the Trust website.

Nonsuch High School for Girls and Wallington High School for Girls formed NWET nearly two years ago, and if  CHSG joins, it will continue the Trust’s focus on girls’ education.   It is the intention of the Trust to change its name to ‘Girls Learning Trust’.

It is expected that the consultation and due diligence will be completed end November/early December when the Governing body of CHSG and the Board of Trustees of NWET will meet to make the decision to take the proposal forward to the Department of Education.

Open sessions to be held at CHSG will take place mid-October (dates and times to be confirmed) at which time parents and cares of pupils at the school will be able to meet the Headteacher, Mrs Jones, and the Chair of Governors, Mr Harding, to hear more about the proposal and to ask questions.

Local Trust set to expand

Greenshaw Learning Trust (GLT) has been in discussions with the Department for Education (DfE) and Academies Enterprise Trust (AET) about the possible transfer of Millbrook Academy, located in Brockworth, Gloucestershire, to GLT.

Commenting on the potential transfer, Will Smith, CEO of GLT said:

We believe the Greenshaw Learning Trust is well placed to help accelerate the improvement of standards at Millbrook Academy.

As part of the Greenshaw family of schools, Millbrook will collaborate closely with, and gain the support from, like-minded school that are locally based.

The Greenshaw Learning Trust has the experience and capacity to provide the support Millbrook needs for the next phase of its development.

Julian Drinkall, CEO of AET said:

The DfE has confirmed that Greenshaw should be well placed to help Millbrook through the next phase of its development, and we are working closely with Greenshaw’s team to ensure an orderly transition for pupils, parent and staff.

The Greenshaw Learning Trust is made up of secondary and primary schools in South London, Bracknell, South Gloucestershire and the Forest of Dean.

The Sutton schools in the GLT family include: Greenshaw High School; Tweeddale Primary; Victor Seymour Infants School and Green Wrythe Primary School.    In March 2015 Greenshaw Learning Trust received approval from the DfE to open a new secondary school in Sutton and in February 2016 further approval was given for an ASD base.

Subject to GLT’s due diligence process, and negotiations with the DfE, the Millbrook Academy will join the Trust on 1 January 2018.  In the meantime, GLT will be working with the leadership of Millbrook and AET to prepare the school for transfer.

Councillors got update on status of B Directors

At the meeting of the Sutton Shareholdings Board held on 20 September 2017 the issue of the status of the B Directors of the Sutton Council company, Sutton Education Services Ltd (now called Cognus Limited), was raised.

Sutton the Inside understands that the committee was told that the Council did not know whether the B Directors had been properly appointed or not.  Further investigations were require to establish the position.

Two things hold up the issuing of shares to the B Shareholders:

  • the limit on capitalisation (which was resolved at the meeting though a resolution)
  • the fact that the Council has not signed the Shareholders’ Agreement

The Company says that for B Shareholders to be issued share certificates new paperwork has to be issued and signed by schools, once the Council has signed the Shareholders’ Agreement.  Sutton the Inside understands that the meeting was assured that this will be sorted-out quickly and Cllr Garratt requested that members of the Sutton Shareholdings Board be informed, by email, as soon as matters have been resolved.

The Council must explain why key documents were not appropriately handled and  more attention was not given to the setting up of this company.

If someone from Sutton Council would like to give Sutton the Inside a statement on this issue, we would be happy to publish it.

So Sutton Council, if you a re listening – please get in touch.

Another document goes missing

Well, what a surprise!  Between Sutton Council and the Council’s company, Sutton Education Services Ltd (SES), a document has been lost, or perhaps it never existed in the first place, who knows?

In a report to be presented to the Sutton Shareholdings Board on 20 September 2017, written by the managing director of SES, it is confirmed that ‘there is no record of a correctly signed copy’ of the Shareholders’ Agreement.   This, readers will remember, is the document that needs to exist in signed form, for the ‘B’ Shareholders of SES to become shareholders.

This document joins a growing list of documents that have been lost at Sutton Council.

Wonder if anyone has checked the back of the sofa?

B Director vacancy to go unfilled for now

Well, it is now confirmed that the ‘B’ Shareholders of Sutton Eduction Services Ltd, who thought they were shareholders and only found out last week that they were not (or rather that’s Sutton Council and the company’s interpretation) are not able to appoint to the vacancy for a ‘B’ Director on the Board of Sutton Education Services Ltd.

In an email sent today (18 September 2017) by Tracey Burley, Managing Director of Sutton Education Services Ltd, she says:

… there is a vacancy for a B Director on the Board of the Company.  Ros Sutton has received nomination for to fulfil this role.  If the  Shareholders Agreement were in place, Ros Sutton would co-ordinate a response from B Shareholders to approve this appointment.  For the reasons stated above we are not currently in a position to move this forward at present, however, we are keen to have B Director representation as soon as possible.

Ros Sutton is one of the two ‘B’ Directors appointed in January 2017 at a meeting of ‘B’ Shareholders, along with Alan McInosh, who resigned from the post in July 2017.

The question still remains, how can ‘B’ Shareholders who are not shareholders, hold a ‘B’ Shareholder meeting and elect two B Directors?  Given what the Council and the Company have revealed so far, what is the legal status of the remaining B Director?

Who appointed the Directors?

How did ‘B’ Shareholders of Sutton Education Services Limited (SES) appoint two Directors if ‘B’ Shareholders don’t exist?

It was an Officer of Sutton Council that confirmed that the ‘B’ Shareholders of SES could not participate in the vote to change the name of the company, because the ‘B’ Shareholders didn’t actually exist.  He said:

During the presentation given on the 17th July, Tracey [Burley, Managing Director of SES], explained that the Shareholders Agreement is currently in draft and is unsigned by any party.  In addition, it was clarified that some potential shareholders had not paid the £10 nominal share value or correctly signed their Deed of Adherence or in some cases not undertaken to complete both requirements.

Whilst the absence of a signed Shareholders Agreement may appear to be a technicality, this means in reality that the Company must act in accordance with the adopted Articles of Association and the Companies Act.  In effect this means that the Council is the only current shareholder.

What is troubling about this statement is:

  • Sutton the Inside is aware of some schools in Sutton have submitted the signed form and paid the £10.  The fact that other schools that said they would be interested but have not yet submitted their forms/money should not be a barrier to those that have, from becoming shareholders.
  • A school that has submitted the relevant signed form and £10 fee in January 2017 has confirmed to Sutton the Inside that they have not been advised that their paperwork was not correctly submitted nor their status as a ‘B’ Shareholder was in doubt.
  • An attendee of the meeting on the 17 July 2017 has told Sutton the Inside that no reference was made at that briefing to the fact that the Shareholders’ Agreement being unsigned was a barrier to share-ownership.
  • That if it is true that the ‘B’ Shareholder category has never been established and Sutton Council is the only shareholder, how is it that two Directors were appointed by ‘B’ Shareholders?
  • In addition to the briefing meeting of 17 July 2017, Sutton the Inside has been made aware of two other meetings of ‘B’ Shareholders, one held on 26 January 2017 and another on 8 March 2017. If this group of Shareholders doesn’t exist, how could a meeting of this group take place?

Sutton the Inside has asked Sutton Council, through an FOI request, for clarification on the status of the Directors, appointed by ‘B’ Shareholder.  Additionally information is being sought on where the decision was taken that made the signing of the Shareholders’ Agreement a prerequisite of ‘B’ Shareholding.

When is a shareholder not a shareholder?

It seems that completing and signing the relevant document (Deed of Adherence), and paying the prescribed fee of £10, is not enough for Sutton Education Services to accept those Sutton schools choosing to participate in Sutton Council’s latest company, as Shareholders.

The issue of the status of what is called ‘B’ Shareholders came to light when Sutton Council published a decision notice concerning the change of name of the company to Cognus.  A few ‘B’ Shareholders, surprised not to have been sent details of the resolution, made enquiries.

Sutton the Inside has seen an email sent by Gerald Almeroth, Strategic Director, Sutton Council,  in which he states:

Whilst the absence of a signed Shareholders Agreement may appear to be a technicality, this means in reality that the Company must act in accordance with the adopted Article of Association and the Companies Act.  In effect this means that the Council is the only current shareholder.

Now that’s interesting, because the Shareholders’ Agreement, and the signing of it, was never, according to ‘B’ Shareholders Sutton the Inside has spoken to,  a prerequisite to becoming a ‘B’ Shareholder.

Further from the Shareholders’ Agreement that Sutton the Inside has seen, it looks like the agreement is between Sutton Council and the Company.  That being the case, it would seem that it is the Counci that is delaying the formal recognition of ‘B’ Shareholders. If correct, then the Council could go on for as long as it likes not signing the agreement and thus preventing the Sutton schools that have paid to become a shareholder of  this company, from becoming a shareholder.

All this is, of course, is true if one accepts the notion that a shareholder is only a shareholder once the Council has signed the Shareholders’ Agreement.   It would seem by any normal logic that once a school has signed the agreement and paid the fee, they are a shareholder.  The fact that the Articles of the company are unclear about how the relationship between the ‘A’ and ‘B’ shareholders work, does not prevent those schools applying under the ‘B’ shareholder category from legally becoming shareholders.

Sutton Council and Sutton Education Services Ltd seems to have got themselves into a bit of a pickle over this.  In an email sent by Gerald Almeroth he says:

This issue was discussed at CMT today where we considered a range of measures to strengthen the arrangements and governance of Council/shareholder interests in companies either wholly or partially owned by the Council.  This will include potential arrangements for company secretarial support that will help to reduce the likelihood of this instance happening again.

It has to be asked why there was not adequate company secretarial support for these companies in the first place and why the Council is only now looking at a range of measures to strengthen the governance.

Finally it is worth noting that whilst the ‘B’ Shareholders were not actually shareholders, they elected two directors to be part of the Board of SES.  What now is the status of those two Directors?

 

 

Email Recalled

On 30th August 2017, Sutton Council’s Governor Support Services circulated a letter, from Niall Bolger, Sutton Council’s Chief Executive, concerning the interim management arrangements for the People Services directorate, to Head Teachers and Chairs of Governors for both primary and secondary schools.

The email however was not sent properly and instead of bcc’ing the mailing list, the full list of recipients were published within the email.

Panic!

Email recalling email sent out.

Email reissued with the email list hidden.

However, a cursory glance at the mailing list on the first email  reveals that there are many mistakes.  People have been sent this email who are no longer Chairs of Governors and in some cases not even on the school governing body any more.

So not only did the list get sent out with everyone’s personal email addresses published, the mailing list itself was incorrect.

Perhaps people in the education community in Sutton should be thankful for the first mistake so they can correct the second.