Blair's flagship schools and the money that never was

Private bodies, we are told, are putting millions into Labour's new city academies. In return, they

Ministers still seem convinced that big business in Britain wants to dig deep into its profits to pay for our children's schooling - and would do so if only the government came up with a sufficiently attractive scheme for letting business do it. Each time that ministers find a new way of attracting commercial sponsorship, they set a price, then reduce it, then reduce it again, and at last hold out their hands like mendicants and beg for a few coppers. By then, it doesn't even have to be cash - "gifts in kind" will do fine. Access to the school premises so you can tell the children what a wonderful company you are? Lovely, we'll put that down as a £10,000 gift.

But now I can reveal a new refinement. Such is their quixotic determination to convince us of the debt we owe to business moguls, that when ministers cannot get business to put in anything at all, they simply invent the money. By the use of smoke and mirrors, they pretend that it has been donated to the project.

The government has made city academies the engine of its policy on secondary education: it plans 200 by 2010. Each academy must have a sponsor. Sponsors can be "businesses, individuals, churches and other faith groups, or voluntary bodies". They own and control their own academies. For this, they were supposed to put up £2m towards the capital cost. The public purse would put up the rest - between £20m and £30m - and pay all running costs.

But £2m turned out to be far too much. Within weeks, the money expected from sponsors had quietly become "up to £2m". From being the minimum, £2m became the maximum. So what do sponsors contribute, if not money? A sponsor, according to the quango set up to run the city academy initiative, will "animate the academy's vision, ethos and management structures". Yes, it's in that much trouble. You don't fall back on entirely meaningless management jargon until things are really bad.

Most big household-name companies have refused to put their money into city academies. The second-hand car salesmen, electrical retailers, holiday entrepreneurs, advertising agencies, property speculators, evangelical Christians, and the rest of the ragbag of academy sponsors, want to put up as little money as possible, and for this to get as much control as they can. Some of them want a place where young people can be taught potty religious ideas; some want a training ground for their future staff - and some, it has to be said, are honestly sure they are doing good.

The government has helpfully suggested to sponsors that they should ensure their nominees have a majority on the governing body. The sponsor controls the school, the teachers, the curriculum, the admissions and exclusions policies, the design of the buildings, the appointment of the head, and pretty well everything else. The taxpayer pays the piper, but the sponsor calls the tune. One of the 17 academies already open is the Business Academy in Bexley, Kent, whose sponsor is the property speculator Sir David Garrard. It has a mock City trading floor in the centre of the building, to make sure its pupils recognise the things that really matter. Another is in Darwen, Lancashire, and is sponsored by Rod Aldridge, the executive chairman and founder of Capita. Aldridge made his fortune largely by taking on outsourced jobs from the public sector. One of his biggest clients is Blackburn With Darwen Borough Council. Another is the government.

But it is in the next tranche of city academies that the desperation really shows. The government has listed 38 schools "in development", giving the names of the sponsors in each case. Some of the sponsors have put up as little as £350,000 towards the total capital cost, and at least two have not put in a penny.

One project is another city academy for Middlesbrough, which already plays host to Sir Peter Vardy's King's Academy. According to the Department for Education website: "Macmillan College will convert to an academy and will be sponsored by the Macmillan Trust." This came as a surprise to its principal, Ken Fraser. The school would certainly like to become an academy, he told me, but it has no sponsor. The Macmillan Trust - the charitable arm of Macmillan the publishers - has helped the school in the past, but has not agreed to put up a penny to turn it into a city academy, and "we have to be careful about how we use their name". Not only that - Fraser still has to consult the parents.

His school was one of the city technology colleges founded by the Conservatives in the late 1980s. They, too, needed sponsors, and they, too, offered ever-increasing degrees of control in return for ever-decreasing quantities of cash. The sponsor for Macmillan College was British American Tobacco - a sign of just how desperate you can get in the search for sponsorship. Rather to Fraser's relief, the tobacco company severed its association with the school after a corporate merger.

Now, however, ministers want the old colleges to become the new academies. Fraser is happy to oblige, and seems quietly confident that ministers will find a way of making it possible, even though he cannot offer a sponsor.

His confidence is entirely justified, if the remarkable experience of the Haberdashers' Company, a City livery firm whose charter dates back to the 15th century, is anything to go by. It has done amazingly well out of the government's need to pretend that it has commercial sponsors.

The Haberdashers' schools are mostly fee-charging, but the company used to control two comprehensives in Lewisham, south London. In 1991, Haberdashers' and the then Tory education secretary, Kenneth Clarke, agreed that the schools should become one city technology college, for which sponsors were supposed to put up several million. There was no other sponsor, and Haberdashers' charitable instincts did not run to putting up any cash at all. The government would have to find the lot. It did, but the world was told that the Haberdashers' had put up £3.45m. This turned out to be a very generous estimate of the market value of a new 99-year lease on the existing school premises.

Now, the city technology college wishes to become a city academy, owned and controlled by the Haberdashers' and benefiting from another large dollop of taxpayers' mazuma. The company also wishes to take over another school, at the other end of the borough. It wants to be the sponsor, but it does not want to spend any money. Anything Kenneth Clarke can do, Charles Clarke can also do, and just before he left the Department for Education, the new academy went up on the department website. "The main sponsor," it said,"is the Haberdashers' Livery Company." So how much, I wondered, was the sponsor putting in this time, in return for control of two schools instead of one? The council says it does not know; the school says no one there can discuss it; the Haberdashers' Company says only the school can discuss it. Local rumour puts the figure somewhere in the region of nothing at all.

Back in Kenneth Clarke's days, another city technology college was started in Bradford, sponsored by Dixons, the electrical retailers, and called Dixons CTC. Now it is becoming an academy, but Dixons is no longer interested in sponsorship. There, too, the state has found an ingenious way of conjuring up money. A city technology college is an independent school - so what's to stop it sponsoring itself? The new academy, says the Department for Education website, "will be sponsored by Dixons CTC, which will be providing sponsorship of £395,000." There was probably an awkward moment until they thought of that one.

If all this gets desperately needed money into schools, who cares? But there is a reason to care about it, and it's not just the dreadful crisis of a Labour government that does not have the confidence to fund something unless it can pretend that big business also thinks it worth financing. If you pump all the money into certain schools, you leave others to rot. The government is choosing to pump its money only into those schools for which it can find, or pretend it has found, a sponsor. The result is that private sponsors are choosing which schools thrive, and which fail - and are not even expected to pay much for the privilege.

Academies for Jesus

The city academy programme is making Christian churches vastly more powerful in education - and cutting out all other faiths, as well as secular schools. Of the 55 approved or in the pipeline so far, 22 academies will be in the control of Christian organisations, which will have the power to decide what is taught and how it is taught. No city academy has been founded by any non-Christian faith. The Christian sponsors are:

- Sir Peter Vardy, creationist and evangelical, whose schools teach that evolution is only a theory, and that it is just as likely that God made the world in six days. Sir Peter intends to run six academies in the north-east.

- The United Learning Trust, a subsidiary of the United Church Schools Trust, will run another eight, in Manchester, Salford, Lambeth, Paddington, Northampton, Barnsley and Sheffield (where it will have two academies).

- Oasis, a Christian trust, will control an academy in Enfield.

- The Church of England will control four academies directly,

in Haringey, Bradford, Leeds and Leicester.

- The Catholic Church will have three, in Greenwich, Lewisham and Liverpool.