In the same week that I asked a question of Oxfordshire’s Cabinet Member for Education about the number of employees with salaries over £150,000 in Multi-Academy Trusts operating in Oxfordshire, the Public Accounts Committee has commented on the same issue in a report published today. https://publications.parliament.uk/pa/cm201719/cmselect/cmpubacc/760/76002.htm
The Cabinet member was unable to answer my question as, not surprisingly, the county doesn’t collate the information. However, in my supplementary question, I identified five MATs, all with HQs outside the county, where there was on officer listed in their 2017 accounts as being paid in excess of £150,000. In due course, my list will appear on the county council website and I will publish the link here.
In the Public Accounts Committee Report, issued today, it is clear that the government wrote to all stand-alone academies where in their accounts up to August 2016 there was an officer paid more than £150,000 to ask for an explanation by the 15th December 2017. I haven’t seen an FOI request for the responses. The original letter from the ESFA of 4th December only went to 29 single academy trusts (i.e. academy trusts with only one school in the trust) where the ESFA could identify from the accounts that the trust was paying at least one person over £150,000 and was to ask why such large sums of money had been paid.
In February this year, the Minister wrote to all Chairs of academy trusts in England saying:
‘I believe that not all boards are being rigorous enough on this issue. CEO and senior pay should reflect the improvements they make to schools’ performance and how efficiently they run their trusts. I would not expect the pay of a CEO or other non-teaching staff to increase faster than the pay award for teachers. I intend to continue to challenge this area of governance. My view is that we should see a reduction in CEO pay where the educational performance of the schools in the trust declines over several years.’ DfE letter 21st February 2018 reference 35 in the PAC Report.
There has been a history of neglect over senior staff salaries dating back to the Labour government and the emergence of the Executive Head or Principal position soon after the start of the century. Such a grade was never formally recognised in the pay and conditions agreements, and once Mr Gove freed up pay for academies, with no government restraints in place, it was open season for those that wanted to see pay rise to closer to what could be earned in the commercial sector. Buying former DfE officials was also always going to be expensive, but was no doubt one of the justifications used. Using public money to pay related parties is often even less acceptable, as the PAC note in their Report.
We heard of related party transactions where the rules were not properly followed, or where there were doubts about the propriety of the transactions. For example, Wakefield City Academies Trust purchased IT services worth £316,000 from a company owned by the Chief Executive of the Trust, and paid a further £123,000 for clerking services provided by a company owned by the Chief Executive’s daughter. We similarly heard that the founder of Bradford Academy, who was a former teacher, was ordered to repay £35,000 after being sentenced to prison for defrauding the school. The founder and other former members of staff at Kings Science Academy paid £69,000 of Government grants into their own bank accounts. There have also been problems with related party transactions at the Bright Tribe Academy Trust, which resulted in schools being removed from the Trust.
Academy trusts are required to demonstrate to the satisfaction of their own auditors that related parties have not made a profit from the relationship (i.e. that transactions are at cost or below). We were concerned that determining whether a service has been delivered at cost is dependent on information from the supplier, who may have a vested interest in manipulating or inflating this information and is in a position to do so. We questioned whether there were incentives for trustees to take advantage of the system, due to the weaknesses in the system of oversight. The Department, noting our dissatisfaction with the current processes, committed to reflect on the adequacy of the current arrangements. Following our evidence session, the Parliamentary Under Secretary of State for the School System wrote to all Chairs of academy trusts to remind them of the need to scrutinise any related party transactions, and to ensure that a full and proper procurement process is following and the trust is able to demonstrate that the services have been provided at cost.
Paragraphs 10 and 11 of the PAC Report: https://publications.parliament.uk/pa/cm201719/cmselect/cmpubacc/760/76002.htm
Should local authorities be required either to provide audit services for all academies or at least to review the accounts of those academies with responsibility for schools within their locality? The LGA could apportion responsibility for MATs that cross boundaries in order to ensure that all are looked at by at least one authority that could then report to the appropriate local scrutiny committee.
Public money, especially in a time of austerity, should be spent in the most effective way. TeachVac has cost the government nothing, but demonstrate how a low cost recruitment site works for the benefit of all. The notion of ‘public service’ and not ‘profit from public funds’ must once again be to the fore.