The Education and Skills Funding Agency (ESFA) received 47 allegations of fraud against academy trusts this academic year, its annual report states.
The ESFA has published its 2023-24 annual report and accounts laying out its expenditure for the most recent academic year on the academies and further education sector.
Here are seven key facts from the annual report.
1. £32 million more fraud detected than last year
During 2023-24, £91 million of fraud was prevented and detected - this is £32.4 million more than in 2022-23.
Of this, £19 million relates to apprenticeships.
The ESFA brought forward 57 ongoing investigations and took action on 142 new allegations throughout the year.
Forty-seven of the new allegations this year concerned academy trusts; the majority were independent training providers. Only six cases concerning academy trusts are live or have been brought forward.
Tes reported in 2020 that changes in apprenticeship funding had driven a rise in fraud allegations and investigation activity.
2. ESFA chief received nearly 400K including pension
ESFA chief executive David Withey took home £145,000-£150,000 as a salary this year.
This is an increase from the £125,000-£130,000 he would have earned in 2022-23 if he had been in post for the full year. As he only joined the department in August 2022, his actual pay had been £85,000-£90,000.
In 2022-23, Mr Withey received £82,000 in pension benefits rounded to the nearest £1,000 - this jumped significantly in 2023-24 to £228,000.
This means that, in total this year, he received £390,000-£395,000 including salary and pension.
The annual report states the movement in his total pay “has been primarily driven by the current year benefit-in-kind gross-up rather than any significant uplift in salary levels”.
There have been some changes to the civil service pension in recent years after the Court of Appeal found in 2018 that arrangements discriminated against younger members of the scheme.
3. ESFA underspent by £100 million
Across the whole year, the ESFA was £0.1 billion (0.2 per cent) under budget, the report states. This was primarily driven by underspends on further education college loans and adult education budgets.
In total, the funding distributed to providers - including academy trusts - from the ESFA increased from £67 billion last year to £72 billion this year.
4. £4.5m of academy debt written off
Balances owed by academies and colleges “may in some circumstances be waived to facilitate the re-brokerage of the academy or college to a more sustainable academy trust of college corporation”, the report states.
In 2023-24, balances of more than £300,000 were waived for five organisations, including three academy trusts. One organisation in insolvency also had its balance owed written off.
UTC Leeds was also subject to debt forgiveness of £327,000.
The three academy trusts subject to re-brokerage debt forgiveness were the Schools Company Trust headquartered in London (£2,465,000), the single-academy Harefield Academy Trust in Uxbridge (£915,000) and Chapel Street Community Schools Trust in Liverpool (£804,000), which ran seven schools.
Schools Company Trust was issued with a financial notice to improve in July 2017. A termination warning was received in 2018 and the four academies it operated were transferred to other trusts in 2018.
A liquidator was appointed for Chapel Street Community Schools Trust in 2021 - it had been issued a financial notice to improve in 2016.
The academy formerly run by Harefield Academy Trust has been transferred to another trust.
In 2022-23, four organisations had been subject to re-brokerage debt forgiveness - including one MAT and one UTC.
Throughout the year, the ESFA, alongside the DfE Regions Group, issued five notices to improve - compared with eight last year.
5. Slight fall in academy sector loans
At the end of March 2024, the ESFA had £188 million of assets in loans, compared with £90 million at the end of March 2023.
However, this large overall increase in loans is mainly driven by the further education sector.
Of the £188 million in loans, £18 million was to the academy sector - slightly down from £20 million last year, with just £4 million in new lending.
Loans can be provided to trusts to “settle any local authority deficit” if schools join them after converting to become academies.
These are then repaid via deductions from a trust’s general annual grant (GAG) over an agreed period of time.
6. A £3.8 million RAAC spend
The ESFA’s reinforced autoclaved aerated concrete (RAAC) removal programme cost £3.8 million during 2023-24.
Some £3.7 million of this was included in the £61 million it provided to academies and local authorities for school improvements, and the other £0.1 million in the core funding it distributed to post-16 providers.
7. Most SRMA visits are ‘good’ or ‘very good’
Over the past year, the ESFA increased the number of visits to academies by school resource management advisers (SRMAs), which help schools develop financial management.
There were 448 visits in 2023-24, compared with 416 in 2022-23.
And 92 per cent of respondents reported their experience with SRMAs was “good” or “very good”, the annual report says.
Furthermore, 88 per cent said the recommendations from SRMAs were useful.
Earlier this year, Tes reported that the Department for Education was inviting organisations to bid for a contract to supply more SRMAs to schools.
Tes revealed back in 2022 that some schools had faced waits of up to five months to get the financial help from advisers they had asked for.
The Department for Education was contacted for comment.
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