I grew up in Australia where the ‘Tall Poppy Syndrome’ is part of the national DNA. You criticise a person or organisation’s success in order to cut them down, deflating arrogance and pomposity. Unfortunately, it’s also about levelling down anyone who has the temerity to succeed. In the UK I have seen it in the continuous attacks on education by the Left.
An example is SchoolsWeek’s coverage of Oak National Academy (ONA). In the 18 months of the Covid crisis there are few really significant education success stories, but ONA is certainly one. Started by an Academy school charity, it has delivered more usable and relevant content than the BBC, Pearson and probably the entire UK edtech startup community of the last decade. It has been funded by £5m from government/DfE, which has seen it attacked from all sides, but not by the thousands of students and teachers who have used it for 100m lessons (to Feb 2021).
Edtech needs funds to build, manage and distribute, even when done on a charitable basis. The content and highly sophisticated systems developed for ONA are better than almost any edtech I have seen in the last decade. How do I know? I have looked carefully at the systems they use, how they have scaled, the agile model they use, their balancing of technical debt against budgets and user expectations – pretty much everything I have learned building tech (I started building edtech products in 1996) as a founder, investor and expert adviser over 25 years.
Edtech businesses take money to create. Your options are to:
- Set up a Company that either has a sustainable commercial model (i.e. makes a profit) or one where you slowly bankrupt your investors by failing to have a sustainable business model (the latter being the most common in edtech)
- As a Charity, raise money from selling your products and services to cover your costs. If not (and this is usually the case) you are continually fundraising, mostly from other larger charities, philanthropic groups and government, to continue your mission.
- As a hybrid of the above, in the UK mostly Community Investment Companies (CIC) or the rarer Limited Company with specific, socially-focused education aims written into your Articles of Association.
Oak National Academy (ONA)
‘To advance the education, training and development of young people and adults in any part of the world, and in particular (but not exclusively) to advance the education and development of under-privilidged and/or socially disadvantaged young people and adults by the provision of holistic , cradle-to-career services to support them to live lives of choice and opportunity.’
Then, under a section headed Powers, the charity’s Articles say, ‘In particular the Foundation has the powers to (1) to raise funds. In doing so the Foundation must not undertake any taxable permanent trading activity and must comply with any relevant statutory regulations’.
This has a direct impact on what ONA, or rather The Reach Foundation Charity, can do to obtain funding once their existing DfE grant runs out in August.
With funding ending in August, ONA and Reach have been working to find a funding and organisational structure to enable it to continue. The simplest way would have been to secure another grant from the DfE. For various reasons this was seen as untenable and instead the DfE issued a £15m tender notice that was then pulled the day before it was due to close. This tender was widely seen as having been written with only one possible winner in mind, ONA, but objections from the British Educational Suppliers Association and others created enough pressure for the DfE to pull the tender on May 12.
For Reach this presented a big problem; if they weren’t going to get a grant and the DfE needed a more open tender, then how were they going to secure ONA’s future with just twelve weeks of funding left?
Having seen many edtech businesses facing similar financial crises, I know that what happens is rapid and multiple scenario planning that includes standard ideas (seeking further grants and tender funding), shifting to a user pays basis, to the more radical such as privatising a charity by selling its assets to the private sector. In my twenty years in UK edtech I have seen all of these:
- 2004 takeover of Edexcel Foundation’s exam JV business by Pearson. The £90m price was used to endow The Edge Foundation, who in 2019 had £27m in assets
- The Key, the schools’ advice service, started in 2007 as a DfES-funded initiative run by the Ten Group who sold it for £18m in 2014 (it is now part of Darwin Acquisitions)
- Thomas Telford School, a state secondary school, created TTS Online in 1997 using content developed by its teachers. It was sold on a subscription basis to schools and the £16.5m profit, all of which was put back into government education initiatives in Shropshire.
SchoolsWeek’s recent story about ONA focused on the idea that the charity assets were going to be put into a company for the enrichment of the existing senior management team (SMT) at ONA. Their evidence seems to have been a leak from within ONA that a company called Sapling Education Ltd had been registered on 21 March 2021 with a single shareholder and director, Ms Emma Beatty, ONA’s Operations Director and Registered Data Controller. What isn’t clear from the registered documents is whether this is a company created as a vehicle for ONA to raise funds, seek government grants or to own/manage any of the intellectual property assets developed by ONA. SchoolsWeek have reasonably assumed this was the plan, but the entity, set up only a few weeks after the DfE’s initial tender for Covid Recovery Resources, is similar to the National Tutoring Foundation Ltd, an entity created by Education Endowment Foundation to bid for the £160m National Tutoring Programme Phase 2.
SchoolsWeek imply that Sapling was the vehicle for ONA’s directors to raise money to secure the programme’s future and then sell out, ‘with tens of millions of pounds to be returned to employees’. This is both poor journalism and factually incorrect for several reasons:
- ONA’s IP is a complex mix, something investors and acquirers generally avoid or pay less for
- As a subsidiary entity of a charity, spinning ONA into a for-profit corporate structure, majority owned by staff, would be complex (like Edexcel) and possibly not allowed by their own rules (charity and company). Even if an external sale occurred, the bulk if not all of the funds would legally need to be transferred (endowed) to another charity, most likely Reach Foundation. SchoolsWeek’s allegations are disingenuous, coming from a for-profit private company whose unaudited accounts (filed under the Companies Act 2015) should include a profit and loss statement rather than just a balance sheet and anodyne notes.
- In most structures, including charities, there are incentives and bonuses for SMTs. Whether this is a good or bad thing has little relevance in law and is more of a personal moral judgement. In this instance I personally think it would be inappropriate, but I do think there are more of the SMT who deserve civic awards, beyond Matt Hood and David Thomas’s 2020 OBEs
- ONA and its assets could be spun into a separate entity like Edexcel with the money going to either Reach or a specific educational endowment. It could also be transferred to a Community Interest Company (CIC) or a separate charity with a linked Limited Company (where profits are gift-aided to the charity)
Depending on the structure, ONA’s staff may be financially incentivised but this isn’t straightforward, has tax implications and would for practical purposes probably be a self-defeating exercise. Yes it may attract and help retain talent (even charities hire in a competitive market) but doing so would create a stick with which critics could beat ONA and Reach. Smarter to pay salaries set by an independent remuneration committee, even if it means a wholesale change at the top of ONA.
Sapling Ltd’s Articles could easily be changed to be more like those of the Education Foundation Ltd, clear and unambiguous ..’the Company is not established or conducted for private gain: any profits or assets shall be applied to the promotion of its objects for public benefit.’
My considered view is that ONA’s SMT have made some unwise decisions and continue their poor record of communications with all stakeholders except schools. They may have political capital in Whitehall and the DfE but they have stumbled over their planning, come up with some frankly stupid and implausible scenarios, and could have won far greater recognition and support by being more transparent. Building ONA has been a monumental triumph and the speed and commitment required always meant the SMT would be overstretched. The body who should have picked up the slack were Reach and their supporters (political, legal, financial and administrative). What SchoolsWeek and many of ONA’s detractors appear to have wanted was for ONA to either fail or have a nasty crash as they tried to build the plane of the future while flying. In terms of impact and value for money, ONA trumped the BBC hands-down. Given the BBC’s current credibility crisis, an ideal outcome may be for ONA to become a major part of BBC Education (as owned by the public, not the commercial BBC Studios).
Sadly, just as the UK looks set to do a trade deal with Australia, we have begun to ape one of their least desirable characteristics, the Tall Poppy Syndrome. I have watched with dismay the tsunami of ill-founded, illogical, incorrect and hypocritical criticism of ONA from major players in education. These include MATS, edtech companies, industry bodies and ‘social media influencers’. I’ve heard little criticism from schools, teachers and students, the actual users and beneficiaries of the huge amount of hard work ONA and its supporters have invested since its inception. Yes, I know of a few critics who have sound and reasonable criticisms of ONA, but from what I can see these are weaknesses ONA has already recognised and has or would like to have on its development roadmap and technical debt plans.
The worst outcome of the current situation would be for Reach to abandon ONA and leave it to die slowly on an unsupported website. It would be another example to explain why there was only one UK K12 company in the HolonIQ/GSV top 150 edtech companies vs sixteen from Europe. Had it been a business from the start, funded by private investors, it would likely have been on the list. The UK education sector needs to be a lot less parochial and sectarian or the idea that Britain is an educational leader will become just another myth.
My best bets for ONA beyond August (without government funding) are:
- BBC – after the Bashir crisis they need a win and ONA would make up for the weak performance of BBC Bitesize (my score, 7/10)
- TWINKL – depending on the structure and impact on their existing business, but conceptually a good fit. 7.5/10
- SPARX – probably the best corporate fit with a patient capital investor (Oxygen House has invested £50m since 2010). Strong in research, evidence and edu connections, including their Chair, Interim OFQUAL Chair Simon Lebus (ex-Cambridge Assessment). Downside – currently maths only. 8.5/10
- SandBox & Co – strong international networks but primarily D2C and it would have to be a wholesale buyout. 5/10
- Francisco Partners – owners of Discovery Learning, Renaissance Learning and Civitas Learning. Two of their SMT invested in CenturyTech recent £1.3m funding round and if this translates into something larger then they will probably be too preocupied trying to workout how to translate the potential of AI into an educational reality. 3/10