Calls from the Local Government Association (LGA) follow a series of abuses of the school finance system, including the Kings Science Academy fraud scandal in Bradford in which £150,000 was transferred to personal bank accounts.
The LGA has raised questions over the ability of the Education Funding Authority, the Department for Education (DfE) agency responsible for monitoring academy accounts, to guarantee value for money and spot abuses.
It wants Education Secretary Justine Greening to ensure councils can monitor academy finances, saying by handing over the necessary power and resources to councils, it would allow parents to be confident their children are not missing out.
The former headteacher of the flagship free school, Sajid Hussain Raza, 43, has been told he could face jail when he is sentenced alongside his sister Shabana Hussain, 40, who was a teacher, and finance director Daud Khan, 44, next month.
The three were convicted on August 1 of making payments into personal bank accounts from Department for Education grants intended to help set up the free school in Bradford in 2011 following a trial at Leeds Crown Court. They were said to have obtained around £150,000. The trial heard Raza used some of the money to make mortgage repayments on rental properties he owned to alleviate his financial problems.
The school, which has since become part of the Dixons Academies Trust and is now called Dixons Kings Academy, was one of the first free schools to open and was praised by Prime Minister David Cameron on his visit in March 2012.
Following the result of the six-week trial, ministers faced calls for a public inquiry into the Government’s handling of the case from the National Union of Teachers. General secretary Kevin Courtney said it was clear that “insufficient due diligence” was carried out on the individuals establishing the school, and he questioned why the DfE failed to ensure police investigated fraud allegations until after the matter leaked into the public domain.
The LGA, which represents more than 370 councils across England and Wales, opposed the plans of Mr Cameron’s administration to force all schools in England to become academies by 2022. A U-turn followed, with the DfE noting ministers still hoped a large number of schools would move to the academy system - in which they are taken out of local authority control - and the plan becoming an “aspiration” rather than compulsory.
Richard Watts, chairman of the LGA’s children and young people board, said: “We are told that academies and free schools are subject to more financial scrutiny than council-maintained schools, yet we keep hearing that millions of pounds of taxpayers’ money, which has been earmarked to make sure our children get a good education, is disappearing into the back pockets of those in charge.”
He added: “The National Audit Office has raised serious concerns about the ability of the DfE to effectively monitor academy trusts’ spending, even before the planned expansion of the academy programme, and we don’t believe it can possibly have effective oversight of spending in more than 20,000 schools. Centralising control of schools isn’t working; oversight needs to be devolved down to local councils.”