Schools: Academies

Baroness Jones of Whitchurch Excerpts

Monday 27th October 2014 Lords Chamber

Asked by

[Baroness Jones of Whitchurch]

To ask Her Majesty’s Government what steps they are taking to improve the financial regulation of academy schools.

[The Parliamentary Under-Secretary of State for Schools (Lord Nash) (Con)]

My Lords, academies are subject to considerably more rigorous financial regulation than local authority maintained schools. For example, they have to publish annual, independently audited accounts; local authority maintained schools do not. They are subject to the rigorous oversight of the Education Funding Agency and anyone in a governing relationship with an academy, or an organisation closely linked to it, can provide services to a local authority maintained school at a profit; they cannot to an academy. However, we are continually looking at ways to refresh the financial regulation of academies.

[Baroness Jones of Whitchurch (Lab)]

I thank the Minister for his reply, but is he concerned about the increasing number of stories of academy chiefs being paid inflated salaries, heads employing family members and friends to provide school services, lavish expenditure on hotels and travel and, recently, a head paying £26,000 for furniture for her office? This is not their money, it is taxpayers’ money, but it seems that a small minority are using the academy funding system as a cash cow. Does the Minister accept that the Government’s centralised oversight of these schools makes it more difficult to supervise academy school expenditure effectively? Does he now accept that that was a mistake?

[Lord Nash]

The noble Baroness picks out some isolated examples. I point out to her, as I have before, that 36 of the 55 pre-warning notices that this Government have issued to academy sponsors have been to sponsors approved under the previous Government. This Government have considerably tightened up financial oversight and improved things such as control of grants. Of course, these figures are but nothing compared with the £10 billion overspend the National Audit Office tells us that the previous Government were heading for under the Building Schools for the Future programme.