Academies and trust: Tighten rules to prevent sponsors receiving unfair payouts

It is still early days but so far the results of the Government’s policy of giving schools new freedoms through academy status have been notably impressive. Standards have risen in sponsored academies at a record rate – and more than five times as quickly as in local authority-controlled schools. But that does not mean we should dismiss today’s report from the Education Select Committee which raises concerns about their governance.

It found some academies are paying large sums of public money for “services” provided by their sponsors or individual trust board members. Some of these payments appear questionable and the report highlights potential conflicts of interest where individuals on trust boards could benefit personally or through their companies from their position – without proper checks. It points out that under current rules sponsors can provide “services” for schools – such as improvement work or back office support and can charge for it as long as they are doing the work “at cost” price. But what does “at cost” really mean and who is checking?

It would be wrong though to suggest that such problems are unique to the academy system. A headteacher in a grant-maintained school also has considerable freedom over school finances. Just last year Sir Alan Davies, the former head at Copland School in Wembley who was knighted for his services to education, admitted paying himself, three staff members and two governors a total of £2.7m through bonuses and salaries and then creating a false paper trail to cover up his crime.

Copland was a local authority-controlled school and in the past year alone there were nearly 200 cases of fraud reported in the grant-maintained sector. That said the rules governing conflicts of interest in academies may not, as the committee says, be sufficiently robust and they need to be. This report should be a wake-up call to improve the academy system – not an excuse to dismantle it.