Funding of Academies - Children, Schools and Families Committee Contents

Examination of Witnesses (Question Numbers 40-48)


29 MARCH 2010

  Q40 Chair: Nick, what you are saying is that the sponsorship money is only a part of the thing. The real help you get is actually the management quality, the administrative help and all that an organisation like that brings.

  Nick Weller: Absolutely. Yes.

  Chair: You are asking us to put that in in advance.

  Nick Weller: Yes, and I think one has one's own opinions about the range of sponsorship models. Some of the larger chains, for example, can take—not all of them, but some of them—a top slice of 10% off the budget. That sounds to me like a national local authority without the local interest. Whereas the smaller, more typical model among the smaller independents sponsoring other academies would be something like contributing about 2% of budget to some sort of central foundation from each school, because if you take 10% away, you rather negate one of the main advantages of being an academy. So as I said at the beginning, I think in the next few years it will be very clear which models of sponsorship work best. We've already heard of one start-up that doesn't inspire one with confidence. It's often clear right from the start, and if an academy does go wrong, it's often been clear early on that perhaps that might happen. All I'm saying is that clear models of sponsorship will emerge over the next few years, and I think you'll get a very clear picture of which sponsors are highly successful and which are less so.

  Q41 Paul Holmes: You were very critical in your opening comments about local education authorities that retain 8% or 10% of their budget. The Government are moving heavily down the road of setting up lots of mini local authorities, such as ULT with 17 schools, or E-ACT with eight schools and five more in the pipeline. As you say, they cream off money for their central administration. Are you against that model?

  Nick Weller: I would say that when that model builds too big a centre, absolutely. Obviously, I may be proved wrong. It may well be that some of the larger shared academies that have a very large centre will be able in some way to provide their schools with better central services than we are able to do with our small federation of schools. However, I personally don't think that's the way to go. I think those patterns of success will emerge very quickly. Among the larger sponsors, I am sure, there will be some that emerge as highly effective and others that are less so.

  Q42 Paul Holmes: This is a question for whoever wants to respond. A mini local education authority, such as E-ACT, has eight brand new academies that have been open for less than a year, and five more in the pipeline—that is 13 schools maximum, but at the moment only eight. Sir Bruce Liddington, who of course piloted the whole Government scheme for 400 academies and was paid £200,000 a year when working with the civil service, is now paid £265,000 a year to oversee eight schools. He has got eight directors, I think, who earn between £85,000 and £195,000 a piece. They've all got company credit cards and expense accounts. They use chauffer-driven BMW and Merc limousines to go and visit academies around the country, in Sheffield and various other places. Sir Bruce, with one of his staff, spent £1,500 on two nights in a hotel in Birmingham while they were on business. All that is paid for entirely by the taxpayer, for what is effectively a small local education authority of eight schools. Is that the way forward?

  John Bangs: That is one of those balls that you can see coming towards you very, very slowly indeed. No, it is not the way forward.

  Chair: Sir Bruce, as schools commissioner, used to give evidence to this Committee and we liked him rather. I don't know where Paul is getting this information.

  Paul Holmes: The Evening Standard on Friday. I've got the paperwork.

  Chair: It's owned by a Russian these days, isn't it?

  John Bangs: It isn't the way forward. One of the reasons why, and this affects other aspects of the inquiry, is that it is down to Paul Holmes to spot that in the Evening Standard instead of discovering exactly how the institutions operate in public. That is what local authority community schools have to do in relation to the Audit Commission, the regular audit that takes place, and the accountability of their finances submitted every three months to the local authority. Everything is open and above board. It may or may not be the case that some of the claims made by some people about Sir Bruce and his minions driving BMWs are over-exaggerated, but how would you know? That is the key issue. People laugh about local democratic accountability being the antithesis of freedom for head teachers. I don't understand that. I've never seen it, but when you talk to the head teacher of a local primary school, they rely on their local authority and on the cluster of schools that surround them for mutual support that is fostered and sponsored in an open and accountable way. Nothing is perfect, and local authorities certainly aren't perfect, but at least you know what's going on.

  Q43 Chair: So, that's a plea for greater accountability.

  John Bangs: It is.

  Q44 Chair: You wouldn't disagree with that, Nick?

  Nick Weller: I wouldn't disagree with that. As a local authority head, my finances went to the local authority and I don't think they were published more widely than that. As an academy head, we have to report under the accounting rules of the Charity Commission, and we have published annual accounts. I would say there is probably more openness and accountability as an academy head than as a local authority head.

  Q45 Paul Holmes: Before I let Andrew come back, PricewaterhouseCoopers has said that there is a missing link between what academies are reporting in their own accounts and the reconciliation of these with the Department's resource accounts against their funding agreement. When I asked a parliamentary question a few weeks ago on whether academies are subject to Freedom of Information, because they are almost entirely publicly funded, the answer was no. Ed Balls, or whatever Minister it was, said, "But we're consulting with the academies to see if they would like to be subject to Freedom of Information." Have you been consulted and have you said, "Yes, please?"

  Nick Weller: I have responded to that consultation and said that, as a publicly funded organisation, I would expect to be held publicly accountable in that way. The one thing I would not want is to be pestered with lots of requests that could be answered much more easily from the Government—from the centre. The DCSF holds quite a bank of information, as will the new YPLA, about academies. As long as they are the first port of call, personally I have no objection.

  Q46 Paul Holmes: The DCSF does not hold the information on what the directors are paying themselves from these many education authorities, what their expense accounts are, what the limousines are, what their 5% bonus is—even though they only pay the staff 1%—for this new financial new year. I am talking about those sorts of things.

  Chair: Andrew?

  Andrew Baisley: I question why it is that academies are always seeking more secrecy and more opacity in their reporting. In the latest round, there was an attempt to get academies to have exempt charity status and therefore avoid further scrutiny. That was removed—the Government backed down from that—but I am always intrigued about why the suggestion is that there should be more shielding and cloaking until campaigners, such as myself or John, succeed in turning it over.

  Nick Weller: A point of information on that is that the DCSF wanted and suggested that we would have exempt status. That is something that academies resisted because it would have compromised charitable status. It is the exact reverse of what Andrew is suggesting. It was a DCSF initiative and it was something that academy heads were successful in overturning.

  Q47 Paul Holmes: The other question linked to the factors about pay, expenses, limousines and all the rest of it is on conflicts of interest. Long ago, when the first academies opened, the Vardy Emmanuel Schools Trust, for example, paid £111,000 to Reg Vardy plc for marketing and recruitment services. They paid £121,000 to Emmanuel College for educational advice and £14,000 to the Billy Graham Evangelistic Association to pay for the work of Sir Peter Vardy's brother, who worked for that association, and so on. Much more modern is the case of E-ACT, where Sir Bruce Liddington is an associate of Veritas, but uses Veritas to hire consultancy staff. He has just hired one at £900 a day, for example, from Veritas, with which he has links. Another director at E-ACT is on the board of Harvey Nash. It uses Harvey Nash to recruit the directors for E-ACT. If that happened in a local authority, those involved would be sacked straight away. Why are E-ACT or any of the other bodies that are running little chains of schools and academies allowed to do all that?

  Nick Weller: I wouldn't say it was typical. As I said to you, I think that successful models of running academies will quickly emerge soon. If you suck money out of schools—away from the education of students—obviously you are not going to be as successful. As I say, that will happen very quickly.

  Chair: Last one, John.

  John Bangs: There are an extraordinary number of odd sources of information. The Mail on Sunday came up with information about how much consultancy firms were charging academies for opening bank accounts, registering exam boards and so on. There is the interesting role of Graham McAvoy, who worked for the DCSF's academy programme. He was engaged, through his company Alligan, to oversee the building and establishment of new schools and so on. On Paul Holmes's comment, the total figure is that around 30 academies triggered the expenditure of £1 million in consultancy fees. You are right. This is a situation where individual schools that are outside the maintained sector can pay enormous fees relative to their own revenue budgets to pay for services that would have been "free" from local authorities. It is a waste of money.

  Q48 Paul Holmes: And they do it without tendering?

  John Bangs: Exactly.

  Chair: Okay. We will finish on that note. We have had The Evening Standard, we have had The Daily Mail. It is a fitting end to this session. Thank you very much, John Bangs, Andrew Baisley and Nick Weller. It has been a pleasure having you in front of the Committee for what looks like our final session. Now we will ask you to vacate those seats, so we can get our next witness in.

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