The Department for Education does not have a “handle” on “excessive pay” for the leaders of multi-academy trusts, MPs have warned.
In a report published today, the Commons Public Accounts Committee says the DfE “does not yet have a sufficient handle on excessive pay within the sector” and can’t assess if public funds are being used well, despite the fact that 43 per cent of state schools in England are now academies.
The report says that the number of trusts paying at least one individual in excess of £100,000 rose from 1,875 in 2019-20 to 2,245 in 2019-20, and that the DfE review on pay was yet to be published.
And it adds that while some academy trusts are building up large reserves, the DfE does not have information on whether these are earmarked for specific projects and “therefore cannot effectively challenge academy trusts on the build-up or planned use of excessive reserves”.
The committee also says that it is concerned about a decision by the Education and Skills Funding Agency (ESFA) to use public funds to “prop up academy trusts in difficulty”, which “fails to address poor financial management within academy trusts”.
DfE under fire over academy bosses’ pay
The MPs say the ESFA should set out the criteria used in decisions to support trusts’ financial recovery or write off debts. They add that the DfE did not have a “sufficiently joined-up” approach to dealing with financial misconduct or monitoring the redeployment of leaders of failing academies within the sector.
The committee reports that the DfE aims for all schools to become part of a family of academy trusts but that it has “not set out a clear plan for how it will achieve this”.
It also says that it is particularly concerned that schools that could seem less attractive to academy trusts - for example, rural schools or small secular primary schools - will be left “orphaned” through the drive towards full academisation.
The DfE gave a further £31 million of financial support to 81 academy trusts in 2019-20, of which £21 million was provided as non-repayable funding, while £10 million of debts held by academy trusts was written off in 2020-21, including £5 million for a single trust.
The committee it is concerned about the “risk that a trust becomes too big to fail and could therefore see large sums of public funds pumped into it to keep it afloat”.
The report notes that the DfE has said that its schools White Paper, expected imminently, will set out more detail about plans for academisation but there is a risk this will “not provide enough detail of how academisation will look on a practical level for pupils and schools”.
It says the White Paper should clearly set out the DfE’s overall timetable for academisation, with a plan of how to support schools at risk of being orphaned.
The MPs highlight how there are regional disparities in trusts’ financial health, with trusts in the North of England reporting a much higher proportion of deficits compared with those in the South East (8 per cent compared with 2 per cent respectively). It says the DfE should investigate the underlying reasons for this.
The committee adds that it is concerned at how the DfE did not have a “complete picture” of the presence of asbestos in school buildings, and suggests the DfE should urgently chase the 7 per cent of schools yet to respond to its asbestos management survey.
Dame Meg Hillier, chair of the committee, said: “Parents deserve a lot more visibility and clarity over exactly what is being provided to their children, in what facilities, for the vast amounts of public money pumped into the school system.
“Parents and pupils have legitimate questions over the levels of pay at their schools, the conditions and facilities they’re learning in, and while mysterious millions disappear into the coffers of favoured trusts, the department has committed only a fraction of what is required to address potential dangers to our young people from schools in poor condition, including those where there is risk from asbestos.
“This unacceptable lack of transparency and accountability to parents and taxpayers must be resolved before the DfE presses ahead with plans to consolidate all of our schools into academy trust groups. The school system at least must give our children a strong start, on a level playing field that may be lacking in so many other parts of their lives.”
Geoff Barton, general secretary of the Association of School and College Leaders, said that his union agreed with the committee’s recommendations that the DfE should provide better information about variations in academies’ financial health, as well as about the criteria used to support trusts in difficultly and the instances of failed leadership.
“We also agree that the DfE should be clear about its plans for full academisation in its forthcoming schools White Paper,” he said.
“However, we would emphasise that the vast majority of academy trusts are financially very well run and fully comply with the vast number of requirements which already exist in terms of reporting financial information.
“Furthermore, trustees think very carefully about the appropriate level of pay for trust leaders and recognise the importance of being able to demonstrate value for money against rigorous performance targets.”
Mr Barton added that the ASCL understood concerns raised by the committee over the need for greater transparency about the information multi-academy trusts have to publish for their schools, but he said it was also important that any further requirements were not “unduly excessive in terms of time and bureaucracy”.
“The PAC is right to voice concerns about the condition of the school estate and the continuing threat posed by asbestos in school buildings,” Mr Barton said.
“Much of the school estate is relatively old and is in urgent need of significant remedial work, which includes the phased removal of asbestos. The funding made available by the government for capital spending is nowhere near enough, and the longer this is not addressed, the greater the problems will become.”
