The Education and Skills Funding Agency has spent £1.6 million over two years on a travel company with close links to its chair.

In the last financial year, the ESFA spent £694,000 on Hays Travel Ltd, according to the agency’s 2019-20 annual report and accounts, published today.

The ESFA report says Hays Travel is chaired by Irene Lucas, who also chairs the ESFA. Ms Lucas’ family members are directors and joint owners of the travel company, the report states.

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During the previous financial year, the ESFA spent £948,000 with the firm.

The payments are both listed as “related party transactions” in the ESFA’s annual report and accounts for 2019-20, published today.

The report states: “Transactions are classified as related party transactions if they occurred during the period the board member named held office. Steps have been taken to avoid conflicts of interest arising.”

Another related-party transaction listed in the report was a payment to Voyage Care Ltd, a provider of specialist care and assisted living accommodation where another ESFA board member, Stuart McNinnies, is non-executive director.

Related-party transactions are not illegal, but they have been a hotly-debated issue for academy trusts in recent years and some education figures have called for them to be banned.

The ESFA also lists related-party transactions with Ofsted and the Institute of Chartered Accountants in England and Wales in 2019-20.

The DfE was contacted for comment.