MPs want more transparency over academy trust bailouts

Ministers should lift the veil of secrecy around how they award million-pound bailouts to struggling academy trusts, say MPs.

The public accounts committee has also told the Department for Education to explain how it will crack down on the leaders of “failing” trusts moving around the education system.

Dame Meg Hillier, the committee chair, said there was an “unacceptable lack of transparency and accountability” for parents and taxpayers.

In a report today, she said this must be sorted before the government ploughed on with a revitalised push towards academisation, due to be announced in the White Paper next week.

The DfE dished out £31 million in financial lifelines to 81 trusts in 2019-20. More than two thirds (£21 million) will not have to be repaid.

Accounts from the Education and Skills Funding Agency (ESFA) also show funding for losses in large trusts.

About £10 million of debts were written off in 2020-21, including £5 million for the Shrewsbury Academy Trust.

Academy trusts could become ‘too big to fail’

The committee said it was “concerned that there is a risk that a trust becomes too big to fail and could therefore see large sums of public funds being pumped into it to keep it afloat”.

The 2019-20 bailouts included more than £2 million to “enable financial recovery” at Academies Enterprise Trust, the country’s third largest chain.

MPs want the ESFA to “set out the criteria” it uses for providing such cash or writing off debt.

“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,” Hillier said.

DfE approach ‘risks further failures’

The committee said it was also “concerned” the DfE’s approach to monitoring the skills and experience of academy leaders, and the lack of remedial action for leaders of failing academies, “risks further failures across the sector”.

Ministers can ban leaders becoming academy trust directors under section 128 of the Education and Skills Act 2008. But it has been used against just ten individuals.

The report added: “There is a risk that the powers available to the department do not go far enough to prevent leaders of failing academy trusts from moving elsewhere within the education system.”

The committee has asked the DfE to explain within six months “how it will better identify and address cases of failed leadership within academies”.

Geoff Barton, the general secretary of the school leaders’ union ASCL, said that the “vast majority” of trusts were “financially very well run”.

A DfE spokesperson said schools “continue to have high standards of financial management and governance”.

The government requires a “high level of accountability and transparency of academy trusts, who publish annual audited accounts, alongside how they are achieving value for money”.

“We have set out clear expectations to the sector that academy trust salaries must be justifiable, and we will continue to challenge high pay if it is not proportionate.”