Multi-academy Trusts

Lord Blunkett Excerpts

Wednesday 10th July 2019 Lords Chamber

[Lord Agnew of Oulton]

My Lords, I am not familiar with the love-nest situation, but I assure the noble Lord that scrutiny of the sector is robust. From 1 April this year, we brought in a requirement that any related-party transaction in excess of £20,000 had to have pre-clearance with the ESFA, and all other RPTs needed to be disclosed. It is frustrating that I am often attacked about governance in the academies sector while there are also a lot of transgressions in the local authority sector. While researching this Question today, I discovered the 2009 case of a so-called super-head in a local authority school, who was knighted by the Labour Government, was then charged with false accounting and has recently lost his knighthood, been convicted and must repay some £1.5 million.

[Lord Blunkett (Lab)]

My Lords, I am sure that the Minister will agree that mistakes have been made in allocating knighthoods by Governments of all persuasions. But would he not acknowledge that the greater transparency and probity in academies and schools today builds confidence and trust in the system as a whole, and that when he and I gave evidence to a House of Commons Select Committee a year or two ago we both agreed that there was insufficient capacity in the system to oversee the present structure? Will he not go back to the Secretary of State—while he is there—to insist that another look is taken at how we hold to account our academies and schools?

[Lord Agnew of Oulton]

The noble Lord is right in saying that we appeared together several years ago at an Education Select Committee. A great deal of work has been done since then. Under my tenure, we have rewritten the academies handbook twice—the latest version was released in the past few weeks and includes the change relating to related-party transactions that I mentioned. We updated the academies account direction —the directions for auditors—in March. We have asked for additional scrutiny of new academy trusts to ensure that they have the correct governance structure. We have ensured that there is a scheme of financial delegation that maintains robust controls, that management accounts are shared with the board of trustees and issued regularly and that there is board oversight of capital expenditure and funding to ensure that it is used appropriately for capital purposes. I have written to all auditors in the sector on three occasions during my tenure to stress the importance of many of these issues. The conversation that the noble Lord and I had with the Select Committee a couple of years ago was absolutely right, but a huge amount has been done since then.