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Multi-academy Trusts: Financial Accountability

Volume 633: debated on Monday 11 December 2017

Academies and multi-academy trusts are subject to a much stronger financial accountability regime than local authority-maintained schools. Academies are required to publish audited financial accounts annually, and the Education and Skills Funding Agency oversees compliance with the funding agreement. We take swift and robust action at the first sign of failure, either financial failure or academic underperformance. The auditors gave 98% of academy trust 2015-16 accounts a clean bill of health.

In my constituency, we have suffered significant cuts in central budgets that support the most vulnerable people in our communities. Hartlepool Council has suffered cuts of almost 50% over the last five years, at a time when demands on services continue to rise rapidly. The council has tried very hard to protect frontline children’s services, but there has nevertheless been a 14% reduction in funding for them, Can the Secretary of State explain how our most vulnerable children and young people will have increased social mobility, given the significant and growing pressures on social care, funding for those—

Order. First, the question is far too long, and secondly, I am afraid that it does not relate to the matter that we are discussing. We are supposed to be talking about the financial accountability of multi-academy trusts.

We are spending record amounts on school funding. We are spending £41 billion this year, and that will rise to £43.5 billion by 2019-20. In the new national funding formula, a fair system that previous Governments have shied away from introducing, we give huge priority to funding for the disadvantaged.

During education questions last month, I raised the case of High Crags primary school in my constituency, which had £276,000 snaffled from its funds by Wakefield City Academies Trust shortly before the trust’s collapse. The school is in a very deprived part of the constituency, and, quite understandably, it wants its money back. Will the Minister tell us what he is doing to ensure that that happens?

My hon. Friend should know that no academy trust can profit from its schools, and the Wakefield trust will not be able to retain any reserves that it has at the point of dissolution. We are working with all the academies and the preferred new trust to determine what is appropriate support and proper funding.

I hope that the standard of the question is up to that of the jumper, Mr Speaker, but I fear that it may not be.

Notwithstanding what the Minister has said, the acting chief executive of Wakefield City Academies Trust managed to pay himself £1,000 a day in a company owned by his daughter and to pay £60,000 a year for clerking services. Despite those excessive sums, however, it appears that the audit committee did not meet for a full calendar year to sign off the probity of those payments. How many more academy trusts across the country are in special measures? Into how many more trusts has the Minister sent his special auditors so that they can have a look? He sent them into Wakefield, but he did not tell anyone else about what was going on, leaving the trust to fail in September during the first week of the new term.

All related-party transactions must be disclosed, and they are. We are working with the trust to transfer all 21 academies to new sponsors with a track record of improving schools and delivering high academic standards. Those transfers will take place in a way that secures the financial future of each school.

The excellent Priory multi-academy trust has been working with King Alfred school in Highbridge, in my constituency, since the school was placed in special measures last year. They have made some very good progress, but the trust’s board of directors is nervous about formalising the sponsorship until urgently needed repairs have been completed at the school. Will the Minister meet me, along with representatives of the trust and the school, so that we can resolve the impasse at the earliest opportunity?

Yes, of course; I will be delighted to meet my hon. Friend to try to resolve that impasse. We are spending record amounts of capital on our school system: £23 billion in this period.

I am confused. In 2015 the Education Funding Agency conducted a financial management and governance review of the failed Wakefield City Academies Trust, but the Department refused to publish it, placing the trust’s commercial interests above the interests of the 8,500 pupils. So can the Minister answer the question of my hon. Friend the Member for Wakefield (Mary Creagh): how many more MATs are in peril on his watch?

As I said earlier, 98% of academy trust accounts for 2015-16 got a clean bill of health. We take the financial probity of the academy system very seriously. All academies have to publish audited financial accounts, which maintained local authority schools do not. The fact that far fewer schools today are rated as inadequate than in 2010 is a tribute to the structural reforms and the academies programme. Currently, 450,000 pupils are in sponsored academies rated as good or outstanding. Under the watch of the hon. Gentleman’s party these schools were typically underperforming, before we turned them into sponsored academies.