Academies: Finance
(asked on 6th June 2018) - View Source
Question to the Department for Education:
To ask the Secretary of State for Education, pursuant to the Answer of 30 April 2018 to Question 138047 on Academies: Finance, what collated central information is held by (a) his Department and (b) it's agencies on related party transactions undertaken by multi academy trusts.
Related party transactions involving academy trusts encompass both receipts by and payments by trusts and so there are separate totals for each. This information, including both payments made by and receipts received by academy trusts, was included for the first time in the Academies Sector Annual Report and Accounts for the academic year 2015 to 2016. The information is not collected by single-academy and multi-academy trusts and so reflects all academy trusts.
Payments made by academy trusts to related parties:
| Number of Related Party Transactions | 2015/16 payments to related parties (£000) |
£1 to £50,000 | 2,636 | 24,627 |
£50,001 to £100,000 | 183 | 12,585 |
£100,001 to £200,000 | 119 | 16,006 |
£200,001 to £250,000 | 25 | 5,662 |
£250,001+ | 70 | 61,922 |
TOTAL | 3,033 | 120,802 |
Income received by academy trusts from related parties:
| Number of Related Party Transactions | 2015/16 receipts from related parties (£000) |
£1 to £50,000 | 857 | 9,574 |
£50,001 to £100,000 | 135 | 9,541 |
£100,001 to £200,000 | 88 | 11,471 |
£200,001 to £250,000 | 16 | 3,565 |
£250,001+ | 59 | 39,066 |
TOTAL | 1,155 | 73,217 |
As the tables above show, £120,802,000 (62%) of the total value of all related party transactions is accounted for by academy trusts making payments to related parties, whilst £73,217,000 (38%) represents income received by academy trusts from related parties. Income received from related parties includes; transactions with subsidiary companies or shared services, diocesan education authorities, related charities as well as donations or services provided by trustees, or trustees’ family members.
This information was not previously collected in this format and we do not have comparable analysis for previous years.
Academy trusts, including multi-academy trusts, are required to disclose all related party transactions in their audited annual accounts, which are publicly available for all years the academy trust has been in operation. The department has recently introduced additional requirements through the 2018 edition of the Academies Financial Handbook, in relation to related party transactions, which will take effect from 1 April 2019. These will require trusts to notify the department of any such transaction in advance of them occurring and to seek approval for any where the value, individually or in aggregate, exceeds £20,000.