Taxpayer-funded academy chains have paid millions of pounds into the private businesses of directors, trustees and their relatives, documents obtained from freedom of information requests show.
The payments have been made for a wide range of services including consultancy fees, curriculums, IT advice and equipment, travel, expenses and legal services by at least nine academy chains.
Critics fear that the Department for Education (DfE) is not closely monitoring the circulation of public money from academies to private firms.
While defending their use of public money, one trustee of an academy chain has called for increased scrutiny of their spending. Another said a director had resigned from the trust because of fears over a conflict of interest.
There is no implication that the chains or their directors and trustees have broken any rules, and all insisted that they had been properly audited.
But the findings have led to shadow schools minister, Kevin Brennan, calling for David Cameron and the education secretary, Michael Gove, to look into this practice urgently. «David Cameron has failed to put in place the appropriate checks over academy chain funding decisions, prioritising pace of expansion over the protection of public money and school standards,» Brennan said. «It is deeply concerning that so much taxpayer money is ending up in the pockets of academy chain directors and trustees.»
Grace Academy, which runs three schools in the Midlands and was set up by the Tory donor Lord Edmiston, has paid more than £1m either directly to or through companies owned or controlled by Edmiston, trustees’ relatives and to members of the board of trustees.
Payments include £533,789 to International Motors Limited, a company owned by Edmiston, and £4,253 to Subaru UK Ltd, where he is the ultimate controlling party. More than £173,000 was also paid to the charities Grace Foundation and Christian Vision, both of which were set up by Edmiston. In addition, £108,816 has been paid to a company controlled by the son-in-law of one trustee.
Grace Academy also employs Gary Spicer, the brother of Lady Edmiston, as its executive director, on a salary of £30,000 plus pension. Spicer’s own company received more than £367,732 from Grace Academy over the last six years for consultancy work.
Judi Wood, the academy’s director of corporate development, said the total net contribution to the academy from related parties amounted to more than £4.5m, while the amount paid by the academy’s sponsor, which was founded by Edmiston, was £5m. Christian Vision has provided offices worth £57,000 a year, she said, while International Motors financed the academy’s development, which were reimbursed at cost. «Grace Academy and those it serves in education, have benefited hugely from the substantial financial support offered by Grace Foundation and from the time and resources offered by trustees,» she said.
Since 2010 more than 3,444 schools – including more than half of secondary schools – have taken on academy or free school status. Payments to businesses in which academy’s trustees have a beneficial interest are allowed if the trust has fully complied with its procedures and conditions set out in the trust’s articles of association. Before July 2010, the Charities Commission oversaw the governance of academies, but this was switched to the DfE in August 2011.
Leigh Academies Trust, run by Michael Gove’s newly appointed schools commissioner, Frank Green, has paid £111,469 since 2010 to Shoreline, a private company founded by him, in consultancy fees.
Green was appointed as the DfE’s schools commissioner in December and is due to begin shortly. Green said the payments were approved by the board. «These payments were entirely pro rata for extra work beyond my contracted part-time employment over a two-year period and were included in the accounts as part of my employment earnings,» he said.
Aurora Academies Trust has paid £213,015 to Mosaica Education for educational services, reimbursement of travel expenses and for use of the Paragon curriculum resource. At least three Aurora directors currently have a direct or indirect interest in Mosaica Education.
An Aurora spokesperson said: «The licence is on an ‘at-cost’ basis in accordance with a Tripartite Agreement between the Trust, Mosaica and the DfE.»
School Partnership Trust Academies (SPTA), which has converted more than 30 schools to academies, revealed payments of £424,850 over two years for legal services to Wrigleys Solicitors, where the trust director Christopher Billington is a partner, and for education consultancy to Elmet Education, where another member of School Partnership Trust Academies is a director.
A spokesman for the SPTA said it was inevitable that transactions would take place with organisations in which someone may have an interest because of the nature of the trust and that all transactions were conducted at arm’s length. «Wrigleys Solicitors historically have carried out legal work for academy conversion work for a number of academy trusts,» he said.
Since September 2011, The Elliot Foundation (TEF), which runs primary academies in the West Midlands, East Anglia and London, has paid £452,373 to founding directors for their work as consultants and for travel and subsistence expenses.
The foundation has existed since being set up with donations and pro bono work, the academy said. Hugh Greenway, TEF’s managing director, took the unusual step of calling for greater scrutiny of academies’ finances to protect the public pound. «We believe there should be even greater scrutiny of education finance … We may have passed our audit with flying colours but we firmly believe that we should continue to improve financial management and control in our schools,» he said.
Academy Transformation Trust , which controls 16 academies in the south-east and Midlands, has paid in total £57,282 to a trustee and a company owned by the daughter-in-law of the trust’s chief executive, Ian Cleland. The payments were made for ICT hardware, software, associated support services, marketing and company stationery.
The Active Learning Trust, which oversees five schools, has paid £16,943 to a company owned by trustee, Marilyn Toft.
Cabot Learning Federation (CLF) has paid £9,000 for training courses to Transform Training and Consultancy, where a former trustee of the federation is also a director. Sir David Carter, CLF chief executive, said the trustee stood down as a director in October because her role as a trainer may have produced a conflict of interest. Navigate Academies Trust has paid its sponsor’s business, Navigate Resourcing Ltd (NRL), £5,400 for recruitment support service to three academies within the trust. The managing director of the sponsor is a trustee of Navigate Academies Trust.
Since the trust was formed in 2012, nine members of staff have been recruited through NRL for three of its academy schools. «This was achieved at cost, which means no profit has been made by NRL,» the spokesman said.
In July this year, the country’s largest taxpayer funded chain, the Academy Enterprise Trust, came under fire following revelations of almost £500,000 worth of payments made to private businesses owned by its trustees and executive.
In November, the Guardian disclosed that a new cadre of powerful school regulators called chancellors are to be appointed by Michael Gove.
A DfE spokesman said: «As charities, academies are required to adhere to accounting standards. These require the full disclosure of related-party transactions and auditors check those disclosures. This government has ensured that academies and trusts are subject to tighter financial controls than ever before and to much more scrutiny than local authority schools.»