MPs call for ban on academy trustee link deals

Margaret Hodge, the chairman of the Public Accounts Committee, told senior Whitehall officials that it felt wrong that the businesses of people involved in the running of academies could benefit financially from the schools’ spending.

MPs questioned the Department for Education’s capacity to monitor the way in which public money was being spent in academies and free schools.

Mrs Hodge highlighted examples of large academy trusts awarding business to firms linked to their own trustees.

She also pointed to the scandal-hit Kings Science Academy free school in Bradford and demanded to know why the Department for Education did not realise that relatives of principal Sajid Raza were being employed there. Earlier reports showed his wife, sister and father being given jobs.

Separately, the school has been the subject of fraud allegations after a DfE audit claimed that fabricated invoices were submitted by the school to claim public money. A police investigation is ongoing.

The Public Accounts Committee hearing yesterday was examining the Education Funding Agency (EFA), the DfE arm responsible for free schools and academies.

Mrs Hodge raised concerns about several examples of academy chain spending which she said “felt wrong”. This included former E-Act chief executive Sir Bruce Liddington being paid more than £280,000 and claims that the Academies Enterprise Trust had paid out almost £500,000 to private businesses owned by trustees.

She also criticised spending by the Yorkshire-based School Partnership Trust Academies (SPTA) which runs more than 30 schools, many of them in the region.

Mrs Hodge highlighted payments made over two years by SPTA for legal services to Wrigleys Solicitors, where academy trust director Christopher Billington was a partner.

SPTA told the Yorkshire Post yesterday that the figure was £150,575. A spokeswoman said: “During the last two years SPTA have converted over 30 academies. Chris Billington is a director of SPTA and Wrigleys Solicitors historically have carried out legal work for academy conversion work for a number of academy trusts, including SPTA. The appointment reflects the expertise of both Chris and Wrigleys in advising charities and in particular academies on this kind of work.

“This is not an exclusive relationship and other legal advisers are also used. SPTA followed the academies financial regulations and tendering arrangements which require three quotes to be obtained and which ensure that Chris did not have any part in the decision-making process.”

EFA chief executive Peter Lauener told the committee that the academies financial handbook stated that “related party transactions” had to be declared and could not be used to allow trustees to make a profit.

Mrs Hodge responded: “Why don’t you just say they can’t do it? It’s just wrong.”

MPs also raised concerns surrounding the Kings Science Academy land deal – which sees almost £6m rent paid to the company of Alan Lewis, the school’s executive patron and a vice chairman of the Conservative Party.

It follows claims by Bradford West MP George Galloway that Education Secretary Michael Gove had misled the Commons by claiming that Mr Lewis had taken a reduction in income for the site by renting it to the school.

Mr Gove has denied this and said that rent for the school equated to £2.27 per sq ft compared with rates paid by previous tenants of “£2.77 and £2.88 per sq ft”.

Mrs Hodge and Tory MP Richard Bacon both asked civil servants whether they could confirm that Mr Lewis had taken a reduction in income from the overall site as a result of the free school being based there.

Mrs Hodge added: “Is he a beneficiary or is he a benefactor?”

DfE Permanent Secretary Chris Wormald said officials would look into the matter.