All interesting stuff: http://www.teachers.org.uk/resources/pdf/CompleteAcademiesBriefing07.pdf Creating Academies in place of community or foundation schools involves the transfer of publicly funded assets to an unaccountable sponsoring body. For a contribution of around 8 per cent (maximum ?2m) of the cost of building a new, or refurbishing an old school building to form an Academy, the sponsors are given control of a modern independent school set up as a company limited by guarantee. Sponsors receive the entire school budget directly from the Government. In July 2006 the Government announced measures to make it easier for private backers to sponsor Academies. Sponsorship ? normally ?2m will no longer have to be pledged up front to help pay for new buildings, but instead can be paid over five years for ?educational innovations?. .... The Secretary of State, Ruth Kelly, is understood to be interested in establishing more ?creative? partnerships to back Academies, such as using more educational bodies such as universities. Another suggestion being discussed is whether the ?2m sponsorship, which is kept in a charitable trust could be used to fund the running costs of the school, rather than the building of them. A series of cheaper ?standard building designs? may be used for the remaining schools. Cash donations may also be paid over a longer period, possibly up to two years... In October 2005 the Times reported that the Academies programme was at risk of failing to fulfill one of its core aims because of a ?tax trap? that would cost individual schools millions of pounds in VAT. If an Academy was to make its amenities such as swimming pool or hall available to local people it would face a VAT bill of millions. The newspaper stated that the Business Academy in Bexley could not be a community could not be a community school as it would cost about ?7m in VAT. Tax is waived if 90 per cent of the usage of the new buildings is for ?relevant charitable purposes?, a regulation intended to stop commercial enterprises posing as charities. For the Academies this means opening for less than one hour a day after school hours, and not at all during holidays, or else face a bill for 17.5 per cent of the original cost of the new buildings. The Treasury has said that it is unable to change the rule, which is enforced by the EU VAT Sixth Directive