Academies are using taxpayers’ money to pay for services provided by members of their own trusts in clear conflicts of interest, a report released today says.

Measures to stop abuse of the system are “too weak”, according to research produced on behalf of the Commons Education Select Committee, which calls for an overhaul of how academies and their umbrella trusts are held to account.

The report, by Professor Toby Greany and Jean Scott, of the London Centre for Leadership in Learning, based at the University of London’s Institute of Education, says while a great deal of work has been done to improve the system, there are still failings.

“Conflicts of interest are common in academy trusts” the report states. “This is not surprising given the design of academies as independent organisations spending public money.”

It adds: “Cases of deliberate fraud are rare and many of the instances where real or perceived conflicts have arisen are the result of people being asked to work too fast with too few controls.

“Nevertheless, the general sense from the literature and the evidence collected for this study is that the checks and balances on academy trusts in relation to conflicts of interest are still too weak.”

The report backed recommendations set out by the Public Accounts Committee, which called for fit-and-proper persons tests for all academy trust members. Larger trusts should be forced to hire part time company secretaries to ensure financial probity and strengthen financial regulation within trusts, the document says.

Graham Stuart, chair of the select committee, said education secretary Nicky Morgan would face questions over the apparent “loopholes” when she faced his committee next month.

“Academy sponsors can bring much needed skills to schools and help raise standards,” Mr Stuart said. “This important research has identified, however, a number of loopholes in the current arrangements that could work against the best interests of academies and their students.”

The report was welcomed by teachers’ leaders, with the NUT stating that the research shone a light on the “murky” arrangements in academy chains.

The Association of Teachers and Lecturers added that taxpayers’ money must not go into the pockets of academy trustees.

“Millions of pounds of public money is being spent on this government’s academy and free school schemes,” Nansi Ellis, assistant general secretary of policy at the ATL, said. “It is vital that the public can have confidence that this money is being spent to improve children’s education and not to line the pockets of shareholders and chief executives.”

Related stories:

Academy bosses must face ‘fit and proper persons’ test to stop abuse of funds - June 2014

‘Extravagant’ expenses and £393K ‘irregularities’ - May 2013

Academy chain hit with accounts warning - May 2013