Sandwell's Shireland Collegiate academy is now deemed 'inadequate', casting doubt on government plans

A school that inspectors rated as "outstanding" has been downgraded to "inadequate" since becoming an academy, casting fresh doubt on coalition plans to develop hundreds more academies.

Shireland Collegiate academy in Sandwell, near Birmingham, received the judgment from Ofsted inspectors last Friday. Standards, leadership and results were judged inadequate and the governing body was said to be overstretched.

Four years ago, inspectors gave the school the highest possible grading. Soon afterwards, its executive headteacher, Mark Grundy, was knighted for services to education and the school became an academy in 2007.

It is thought to be the first school in the country to have been given an outstanding judgment, then to have failed an inspection after turning into an academy. Critics warned it was proof the education secretary Michael Gove's plans to turn all schools into academies could put the education system at risk. They said the academy model – under which a school is operates independently of a local authority – could, in fact, hinder its performance.

Mary Bousted, general secretary of the Association of Teachers and Lecturers, said: "This shows up the idea that changing a school's status to academy – simply changing its name, divorcing it from its local authority and separating it from its local community of schools – will automatically lead to improvements is a fallacy, and it will be shown to be one at great cost over the next few years.

"Academy status does not magic good performance out of the air, and in fact it can mask poor performance."

In an interview published today in the Times Educational Supplement, Gove said he would allow all schools rated outstanding to escape further Ofsted inspections. This would mean failures such as at Shireland may go undetected, Bousted said.

The judgment comes two weeks after it emerged that the United Learning Trust, the country's largest sponsor of academies, has had three of its schools branded inadequate by Ofsted in the past year. The new government was also dealt a blow this month when Kings International College, a comprehensive run under private management in Gove's Surrey constituency, failed an Ofsted inspection and went back under local authority control.

Shireland is run in a partnership with another academy five miles away – George Salter Collegiate Academy – where Grundy is also the executive head. In January, it was rated outstanding.

The latest Ofsted report gives few clues as to what could have brought about the dramatic changes at Shireland, although weaknesses in its middle management are documented. Grundy said: "We have appealed against the judgment and are in the process of a formal complaint to Ofsted. At this point, it is very difficult for me to say anything.

"I would say, however, that the levels of achievement at Shireland are higher than they have ever been.

"The value we add to learners' achievements at the age of 11 are also higher than they have ever been. Exclusions are at an all-time low, and attendance is at the highest ever level."

• This article was amended on 28 May 2010. The original stated that Shirelands and Sandwell are in Birmingham. This has been corrected.