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Tens of millions of public money used to “prop up” poorly managed academy schools with potentially excessive levels of pay

25 March 2022

PAC reports concerns on emerging two-tier school system with some “orphaned” while others “too big to fail”

Around 43% of state-funded schools now operate as academies, educating over half of pupils in England across over 2,700 academy trusts, and the Department for Education (DfE) aims for all state-funded schools to become part of a family of academy trusts. 

But in a report today the Public Accounts Committee says a lack of transparency in local academy financial information is harming parents’ ability to hold their local academy leaders and the DfE to account, for the services they provide to pupils or for their use of public funds.

The PAC says DfE doesn’t have “a handle on excessive pay within the sector” - with the number of trusts paying at least one individual in excess of £100,000 rising from 1,875 in 2018/19 to 2,245 in 2019/20 – and that the “Education & Skills Funding Agency’s decision to use public money to prop up academy trusts in difficulty … fails to address poor financial management within academy trusts.”

DfE gave an additional £31 million of financial support to 81 academy trusts in 2019/20, of which £21 million was provided as non-repayable funding. £10 million of debts held by academy trusts was written off in 2020-21, including £5 million for a single trust. The Committee is concerned about the “risk that a trust becomes too big to fail and could therefore see large sums of public funds pumped into it to keep it afloat”, while other less ‘attractive’ schools - financially struggling schools, small secular primary schools, schools in a rural area - become “orphaned”.

There are also concerns over the condition of the school estate, particularly whether pupils have access to facilities that support learning, and the continuing threat to the health of pupils from asbestos in school buildings - a significant and potentially dangerous problem in many schools. £11.4 billion is required for essential remedial work across all schools but DfE made £5.6 billion of capital funding available for the education sector in 2021/22, with only £1.8 billion specifically for maintaining and improving the condition of school buildings. Ofsted has downgraded schools based on inadequate facilities, and “there is a risk that schools are not receiving sufficient capital funding to invest in facilities that enhance educational outcomes”.

Chair's comments

Dame Meg Hillier MP, Chair of the Public Accounts Committee, said:

“Parents deserve a lot more visibility and clarity over exactly what is being provided to their children, in what facilities, for the vast amounts of public money pumped into the school system. Parents and pupils have legitimate questions over the levels of pay at their schools, the conditions and facilities they’re learning in, and while mysterious millions disappear into the coffers of favoured trusts, the Department has committed only a fraction of what is required to address potential dangers to our young people from schools in poor condition including those where there is risk from asbestos. 

This unacceptable lack of transparency and accountability to parents and taxpayers must be resolved before the DfE presses ahead with plans to consolidate all of our schools into academy trust groups. The school system at least must give our children a strong start, on a level playing field that may be lacking in so many other parts of their lives.”

Further information

Image: CCO