Exclusive: How a council broke the rules to give controversial school £½m

Internal auditors have found Doncaster Council ignored its own legal advice when agreeing a deal with Michael Wilkins’ Outwood Grange school in Wakefield, there was no signed contract, no evidence of value for money and no competition for the lucrative deal.

Doncaster brought in Mr Wilkins’ school to provide specialist support to North Doncaster Technology College (NDTC) in July 2008 after it slipped into special measures.

The council’s audit into the decision was launched following a Yorkshire Post investigation into how Outwood Grange had received around £3.2m from three councils for improving five struggling secondary schools and how Mr Wilkins’ services had cost the taxpayer more than £1m over four years.

A report detailing the audit findings indicates that Outwood made a profit of £1m from the public funding provided by Doncaster, North Yorkshire and Stockton councils. It said: “This would appear to be a generous figure and would indicate it may have been possible for Doncaster Council and NDTC to have obtained a more competitive price,” adding that if the council had overpaid “it is as a result of its own failings”.

Last night the council acknowledged there had been “severe flaws” surrounding the deal with Outwood Grange.

Mr Wilkins was parachuted into NDTC as a National Leader in Education (NLE), a Government-backed initiative to use leading headteachers to turnaround under-performing schools. But Doncaster auditors found the council “failed to comply with its own procurement procedures”, including finding “no evidence demonstrating why Outwood Grange was considered by the council to be the best option for NDTC”.

The council went ahead with agreeing to spend hundreds of thousands of pounds with little evidence of seeking any alternatives to Outwood Grange or a detailed breakdown of what the money would provide.

The legal services manager warned the council that it could only secure short-term assistance from Outwood Grange before going through a proper procurement process but this advice was ignored. Instead, the council agreed a year-long deal with Outwood which ultimately cost £537,861.

The council produced a procurement “waiver” in December 2008 in a move to authorise the spending but auditors said the financial implications included in the document were actually dated June 2009. A council officer appeared to have given approval for spending of between £400,000 and £450,000 but auditors said all contracts above £100,000 should have been referred to Cabinet.

Auditors found five different versions of an agreement with Outwood Grange, all dated September 1, 2008, but none of them were signed. It was not clear who the contract was actually with though payments were made to Outwood Grange Consultancy, a private company specifically set up for NLE work.

Two of the agreements had spreadsheets detailing monthly costs totalling £581,901 with auditors stating there was no explanation for the £44,000 difference between what was ultimately paid. It was also not clear who had created the spreadsheets, which may also have been drawn up after work began.

There was no evidence the council had checked Outwood Grange had carried out work before invoices were paid and it was not possible to reconcile the invoices to the spreadsheets. The report said: “There appears to have been poor contract management and inadequate scrutiny of payments before authorisation.”

The school was removed from special measures near the end of the intervention work and two months later NDTC became an academy run by Outwood.

The report, to be considered by the council’s audit committee next week, says the improvement represented a good outcome but it was impossible to conclude whether the deal delivered value for money because of the council’s failure to effectively seek competition for the work.

Doncaster’s children services director, Chris Pratt, said: “We fully recognise and accept there were severe flaws in relation to how these arrangements were set up and it is completely unacceptable that a number of statutory processes and procedures were not undertaken correctly.”