Academy trusts must ensure they do not have too many local authority associated persons (LAAPs) among their trustees and members.
The limit on LAAPs is set at 19.9% of trustees and 19.9% of members. There are also additional limits on voting rights which I will explain later.
This page explains who qualifies as an LA-associated person, how many LAAPs each academy trust is allowed to have among its members and trustees and what happens if that limit is exceeded.
This article only applies to academies because LAAPs do not exist in maintained schools.
Rules From Articles Of Association
The rules on LA-associated persons are found in the final section of the current model articles of association.
The section is called Avoiding Influenced Company Status. An “influenced company” is one where the LA holds significant power or control and academy trusts are not-for-profit companies.
Check the last few pages of your own articles to find the relevant part. There are three basic rules:
- no more than 19.9% of trustees can be LAAPs
- no more than 19.9% of members can be LAAPs
- LAAPs cannot hold more than 19.9% of voting rights at any meeting of trustees or members.
So LA-associated persons must never make up one-fifth or more of your trustees or one-fifth or more of your members.
The articles also say that LAAPs who are trustees or members must hold less than 20% of the voting rights at any meeting. In practice, as long as you limit the number of trustees/members to less than 20% of the total people in post you should not have to worry about the voting rights limit.
Technically it would be possible to hold a members’ meeting where, for example, only five out of seven members attend and one of the attendees is a LAAP, giving them voting rights of 20%, but that seems fairly unlikely.
It would be even less likely in a meeting of trustees because you will usually have significantly more trustees than members in place.
Who qualifies as an LA-associated person?
A trustee or member is an LA-associated person if any of the following apply:
- they are currently a councillor
- they have been a councillor in the last four years
- they are currently employed by the LA
- they are both an employee and either a director, manager, secretary or similar officer of a company controlled by the LA.
To see where that definition comes from we first need to check the model articles of association. At the start of the articles is a section called “Interpretation” which contains definitions for terms used in the articles. Below is the definition given for a LAAP.
“‘Local Authority Associated Person’ means any person associated (within the meaning given in section 69(5) of the Local Government and Housing Act 1989) with any local authority by which the academy trust is influenced.”
Model Articles of Association (June 2021)
So next we need to check section 69(5) of the Local Government and Housing Act 1989 which tell us when someone qualifies as a LAAP.
Section 69(5) explains that someone is a LAAP if they:
- are a member of the local authority (a “member” means a councillor)
- have been a member within the last four years
- are an officer of the authority (an “officer” means an employee)
- are both an employee and either a director, manager, secretary or other similar employee of a company which is under the control of the authority.
“For the purposes of this section, a person is at any time associated with a local authority if—
(a) he is at that time a member of the authority;
(b) he is at that time an officer of the authority;
(c) he is at that time both an employee and either a director, manager, secretary or other similar officer of a company which is under the control of the authority; or
(d) at any time within the preceding four years he has been associated with the authority by virtue of paragraph (a) above.”
Local Government and Housing Act 1989 (Section 69)
Can local governors be LA-associated?
No. Only members and trustees can be LAAPs. If someone is a local governor in a multi-academy trust they cannot qualify as a LAAP. They also cannot qualify as a LAAP if they sit on any other academy committee but are not a trustee.
It may seem odd that the DfE places no limits on local governor LAAPs in their model articles, as you could in theory have a local governing body stuffed to the brim with LAAPs but a 19.9% limit at trustee and member level.
However, I assume the reasoning is that the trustees and members hold the real power in each trust. The local governors only hold powers that have been delegated down to them.
What counts as a local authority?
The definition of a local authority is found in section 67 of the Local Government and Housing Act 1989. It is a very wide definition so check the Act to see the full list, but it includes:
- county councils
- county borough councils
- district councils
- London borough councils
- parish councils
- community councils
- fire and rescue authorities
- policy authorities.
What if someone is associated with an LA that is not close to the academy?
They still qualify as an LA-associated person, whether or not the LA they are associated with is geographically close to the academy trust. The definition of a LAAP in the model articles refers to any person associated with any local authority by which the trust is influenced.
For example, if a trustee at an academy in London is also employed by Devon county council they are still considered a LAAP.
Do LA-associated persons need permission from the LA to join the board?
The current model articles say that any trustee joining the board needs permission from the LA they are linked to. They do not say that someone who is joining your trust as a member needs permission from the LA. (Check your own articles to confirm this.)
“No person who is a local authority associated person is eligible to be appointed or elected to the office of trustee unless their appointment or election to such office is authorised by the local authority to which they are associated.”
Model Articles of Association (June 2021)
Can elected trustees count as LAAPs?
Yes. The rules on LAAPs apply equally to both appointed and elected trustees, so a parent trustee elected by the parent body could be a LAAP, as could a staff trustee elected by members of staff.
Do school employees count as LAAPS?
If they are employed by a maintained school then yes, they count as a LAAP. If they are employed by an academy trust then no, they are not a LAAP.
Example Calculations
Remember that 19.9% is the maximum number of LA-associated persons allowed among your members and the same limit is placed on your trustees. Here are the calculations of how many LA-associated persons an academy trust can have.
Member Calculations
A trust with five members or fewer cannot have any LAAP members, because you would immediately breach the 19.9% limit. Just one LAAP member would make up 20% (or more) of members by themselves.
A trust with six to 10 members could have only one LAAP member, who would form between 16.6% to 10% of the total members.
Trustee Calculations
A trust with five trustees or fewer cannot have any LAAP trustees (but in reality all academy trusts will have more trustees than this).
A trust with six to 10 trustees could have only one LAAP trustee, who would form between 16.6% to 10% of the total trustees.
A trust with 11 to 15 trustees could have only two LAAP trustees (18% to 13%).
A trust with 16 to 20 trustees could have only three LAAP trustees (18.75% to 15%).
What happens if a member or trustee becomes a LAAP during their term of office?
The model articles say that if a member or trustee becomes a LAAP during their term of office, for example they get a job working for the council, they are “deemed to have immediately resigned”.
In other words, they immediately stop being a member or trustee and have no choice in the matter. Notice that in this clause it doesn’t matter whether your new LA-associated person takes you over the 19.9% limit or not; they are deemed to have resigned either way.
“If at the time of either their becoming a member of the academy trust or their first appointment or election to office as a trustee any member or trustee was not a local authority associated person but later becomes so during their membership or tenure as a trustee they shall be deemed to have immediately resigned their membership and/or resigned from their office as a trustee as the case may be.”
Model Articles of Association (June 2021)
If we have an LA trustee are they a LAAP?
Only if they meet the definition of a LAAP described above, for example they are employed by the LA. They are not an LA-associated person just because they are an LA trustee.
Current model articles of association don’t contain the role of LA trustee, but some academy trusts will have LA trustee vacancies in their articles, particularly if their articles have not been updated in many years.
These LA trustees may be either nominated or appointed by the LA but beyond that they do not have any links with the LA or vote on behalf of the LA. Once they are on the board they function in the same way as any other trustee.
What happens if we have too many LAAPs in post?
The articles of association have been written so that it is not possible to accidentally appoint or elect too many LAAPs. The wording says that the extra trustees or members who are LAAPs are “deemed to have resigned immediately before” their appointment or election.
In effect, therefore, the extra LAAPs never joined your academy trust at all, so it’s not possible to accidentally breach the limit.
“If at any time the number of trustees or members who are also local authority associated persons would (but for articles 139 to 142 inclusive) represent 20% or more of the total number of trustees or members (as the case may be) then a sufficient number of the trustees or members (as the case may be) who are local authority associated persons shall be deemed to have resigned as trustees or members immediately before the occurrence of such an event.”
Model Articles of Association (June 2021)
The model articles also explain what would happen in the unlikely event that two LAAPs have recently been elected or appointed but only one needs to resign to keep the academy trust under the 19.9% limit – the person who has joined the trust most recently must leave.
“Trustees or members (as the case may be) who are local authority associated persons shall be deemed to have resigned in order of their appointment or election date the most recently appointed or elected resigning first.”
Model Articles of Association (June 2021)
Why is it important to limit the numbers of LA-associated people?
If an academy trust has too many LA-associated people it becomes an influenced company. The law places a number of restrictions and burdens on influenced companies that influenced academy trusts would have to fulfil.
Part II of The Local Authorities (Companies) Order 1995 explains what influenced companies must do. I won’t list all the requirements here, but to give you a flavour an LA-influenced academy trust would have to:
- write that it is an LA-influenced company on documents like its letters
- remove a trustee if they were disqualified from being a member of an LA
- provide information requested by the Audit Commission
- provide information requested by local councillors.