The Labour Government under Tony Blair established academies through the Learning and Skills Act 2000, which amended the section of the Education Act 1996 relating to City Technology Colleges. They were first announced in a speech by David Blunkett, then Secretary of State for Education and Skills, in 2000. He said that their aim was "to improve pupil performance and break the cycle of low expectations."
The chief architect of the policy was Andrew Adonis (now Lord Adonis, formerly Secretary of State at the Department for Transport) in his capacity as education advisor to the Prime Minister in the late 1990s.
Academies were known as City Academies for the first few years, but the term was changed to Academies by an amendment in the Education Act 2002. The term Sponsored Academies was applied retrospectively to this type of academy, to distinguish it from other types of academy that were enabled later.
Sponsored Academies originally needed a private sponsor who could be an individual (such as Sir David Garrard, who sponsors Business Academy Bexley) or an organisation (such as the United Learning Trust or Amey plc). These sponsors were expected to bring "the best of private-sector best practice and innovative management" to academies, "often in marked contrast to the lack of leadership experienced by the failing schools that academies have replaced" (known as predecessor schools). They were originally required to contribute 10% of the academy's capital costs (up to a maximum of £2m). The remainder of the capital and running costs were met by the state in the usual way for UK state schools through grants funded by the local authority.
The Government later removed the requirement for financial investment by a private sponsor in a move to encourage successful existing schools and charities to become sponsors.
Sponsored Academies typically replaced one or more existing schools, but some were newly established. They were intended to address the problem of entrenched failure within English schools with low academic achievement, or schools situated in communities with low academic aspirations. Often these schools had been placed in "special measures" after an Ofsted inspection. They were expected to be creative and innovative because of their financial and academic freedoms, in order to deal with the long-term issues they were intended to solve.
Originally all Sponsored Academies had to have a curriculum specialism within the English Specialist Schools Programme (SSP). However, this requirement was removed in 2010.
By May 2010 there were 203 Sponsored Academies in England.
The Academies Act 2010 sought to increase the number of academies. It enabled all maintained schools to convert to academy status, known as Converter Academies and enabled new academies to be created via the Free School Programme.
At the same time the new Conservative-led Coalition Government announced that they would redirect funding for school Specialisms i.e. Technology College Status into mainstream funding. This meant that Secondary Schools would no longer directly receive ring-fenced funds of c£130K from Government for each of their specialisms. One way to regain some direct control over their finances was to become a Converter Academy and receive all of their funding direct from Government, with the possibility of buying in services at a cheaper rate. This, along with some schools wanting more independence from local authority control, meant that many state secondary schools in England converted to academy status in subsequent years.
By April 2011, the number of academies had increased to 629, and by August 2011, reached 1070. By July 2012 this number reached 1957, double that of the previous year. and, at 1 November 2013, it stood at 3,444.
There are no academies in Wales or Scotland, where education policy is devolved.
The Education Funding Agency monitors financial management and governance of academies. In March 2016 the Perry Beeches The Academy Trust multi-academy trust was found to have deleted financial records for £2.5 million of free school meal funding, and that the chief executive was being paid by sub-contractors as well as by the trust. Its schools are likely to be taken over by a new trust. In August 2016 former principal and founder of Kings Science Academy, former finance director, and former teacher who was the founder's sister were found guilty of defrauding public funds of £150,000.