Fears have been raised that the Department for Education is continuing to pay “excessive” rent to a former Conservative Party chief for a free school site in a run-down area of inner-city Bradford.

The land deal for the Kings Science Academy site, in which the DfE agreed to pay nearly £300,000 a year to the business of a former vice-chairman of the Conservative Party, was set up as a 20-year lease in 2012.

After the deal first emerged in 2013, Bradford Council’s then cabinet member for education, Ralph Berry, revealed that the annual rent was close to the £362,094 the authority had paid to purchase a site outright for a much larger secondary in the city, built in the same year as the Kings Science Academy. 

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Now the DfE is refusing to to say whether its rental deal remains in place for the site of the free school, which has since been rebrokered and is now run by Dixons Academies Trust and known as the Dixons Kings Academy. A DfE spokesperson would only say that it was “commercially sensitive information”.

£6m free-school rent deal

The money was being paid to the Hartley Property Group, where Alan Lewis is chairman and director. At the time the deal was agreed, Mr Lewis was a vice-chair of the Tory party, and the DfE had thought he was the chair of governors at the Kings Science Academy.

Today the DfE is facing fresh questions about how the deal was reached and what happens when the lease expires in 2032.

Meg Hillier MP, the chair of the Commons Public Accounts Committee said: “This is another example of the Education and Skills Funding Agency spending large sums of money on free-school sites.

“It has become one of the largest purchasers of land in the country. Owners of land can see them coming with their chequebook open.

“The agreement to have a 20-year lease is very interesting. This might be appropriate for a business but not for a school. Where does this leave a school after this?”

Mr Berry said last night: “This was a highly politicised drive to open a certain sort of school. This deal will ultimately cost taxpayers £6m and more for use of a school site in Bradford.

“There is no way a local authority would have been able to put together such a deal. A finance director just would not sign off on it. It wasn’t just excessive. It was an outrage.”

Under the terms of the deal revealed in 2013, the site in the deprived Lidget Green area of the city will have already cost the DfE at least £1,479,000 by the end of 2018-19.

The figures for the land deal first emerged when a leaked DfE investigation report into the Kings Science Academy revealed that the department was paying £295,960 a year over a 20-year lease to the Hartley Property Group, which the report said was owned by Mr Lewis. 

An initial rent-free period of 19 months was agreed but the deal is still worth almost £6 million over 20 years.

When the deal was agreed, the DfE had believed that Mr Lewis was the chair of the governors at the Kings Science Academy. However Mr Lewis denied ever being chairman and the DfE subsequently said it had been misinformed by the school and that it appeared that no chair of governors had been in place during the free school’s first year.

The value of the deal was questioned at a Public Accounts Committee hearing in January 2014, when the former chair, Margaret Hodge, said she had been given a local valuation which suggested that the DfE was paying three times over the odds for the Kings Science Academy site.

She also questioned how the DfE could have agreed the deal when it thought the landowner, Mr Lewis, was the school’s chair of governors.

Peter Lauener, who was then the chief executive of the Education Funding Agency, confirmed at the time that the deal was worth around £6 million and that the department had thought Mr Lewis was the chair of governors when the deal was agreed.

He said: “As a result, we took extra steps in the process, because there is clearly a conflict of interest there. In accountancy jargon, it is a related-party transaction - although it was clear afterwards that it was not the chair of the body - but we got a market valuation which confirmed that the valuation was in line with the market rent. It was independent property consultants who procured that valuation.”

When asked this week by Tes whether the land deal remained in place or whether it had been renegotiated, a DfE spokesperson said that it was “commercially sensitive information”.

The Kings Science Academy became embroiled in a fraud scandal - separate to the land deal - which saw the school’s founding principal, Sajid Hussain Raza, and two other former members of staff jailed. 

Dixons Academies Trust and the Hartley Property Group have been approached for comment.