Academy finances: Important lessons to learn

Written by: Jon Richards | Published:
Jon Richards, national secretary for education, UNISON

Jon Richards asks whether the proper systems are in place to ensure financial transparency across the ever-increasing number of multi-academy trusts

I recently worked with the BBC Panorama programme on an investigation into procurement practices and related party transactions at the Bright Tribe multi-academy trust (MAT). The programme was aired earlier this month.

I was filmed for the broadcast answering questions for around two hours. I was one of a number of talking heads in the show. However, it wasn’t possible to pack huge amounts of detail into a 30-minute programme and it meant that a lot of facts didn’t make it into the final cut.

UNISON first became aware of Bright Tribe in the summer of 2015 when our Essex branch noted that the MAT was proposing to outsource staff at their Colchester Academy to different private companies.

One of our branch representatives noticed that the private companies were all registered at the same address, so our forensic researcher took a deep dive into their accounts and other financial records.

He discovered a host of third party transactions (the private companies had board members who also sat as Bright Tribe trustees), a failure to declare financial requirements, and some financial governance processes that didn’t seem to meet the required standards.

We contacted the relevant government watchdog, the Education Funding Agency (EFA). After some initial encouraging responses from them they went silent and wouldn’t respond to our follow up questions.

We aren’t the sort of organisation that just gives up, so we went above the EFA to the National Audit Office (NAO). The NAO doesn’t mess about and within weeks wrote to us acknowledging our concerns and explaining that it had asked the EFA to act on them.

Bright Tribe was instructed to make changes and the EFA wrote a report outlining its investigation into Bright Tribe, its findings and recommendations – a report which was later made public (see further information).

Then, amazingly, Bright Tribe was awarded £1 million by the government to expand in the North East, although it has since pulled out of the project – you definitely need to see the Panorama for more details about that...

As a result of the programme, the shadow education secretary Angela Rayner has now joined us in calling for a detailed inquiry into Bright Tribe.

Meanwhile, the founder of Bright Tribe, Michael Dwan, who featured in the Panorama programme, has denied all the allegations raised in the broadcast.

Mr Dwan left Bright Tribe MAT earlier this year and the trust is now under new leadership after new trustees were appointed in July. They have commissioned independent investigations to “ensure value for money, transparency, good governance and oversight”.

The new leadership also says that it is looking “urgently” into “a number of issues of serious concern” raised by Panorama.

It says that the independent investigations will “cover every area of the trust’s operational work over the past few years”.

While we wait for the outcome of these investigations, there are lessons to be learned across the academy system and many questions to be answered covering the system of financial governance and accountability for MATs.

Does the EFA – now the Education and Skills Funding Agency – have the resources or indeed the will and political backing to ensure that MAT finances are rigorously checked to ensure that public money is being used properly?

In several cases, we have seen that the ESFA seems too ready to accept assurances about finances. How can the ESFA ensure that MATs embarking on third party/related transactions are open and transparent? How do you measure whether such transactions are “at cost” and ensure that a provider isn’t unduly benefiting from the relationship?

How do we ensure that non-disclosure agreements aren’t being used to protect commercial interests at the expense of the public interest?

Since the programme, UNISON and Panorama have been inundated by people telling us similar stories. Clearly this doesn’t mean that every MAT has questionable financial operations, nor does it mean that maintained schools are all innocent. However, with the amount of public money at stake and with resources so tight for schools, we can’t afford to let large sums of public money be diverted away from funding our children’s education.

And as I sign off this article the ESFA has just published a letter it has sent to academies reminding them of their financial duties, suggesting the ESFA is tightening some of its processes.

We will see if this makes a difference.

  • Jon Richards is national secretary for education at UNISON.

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