Children's Wellbeing and Schools Bill

Written evidence submitted by Chris Llewellyn to The Children’s Wellbeing and Schools Bill Committee (CWSB231). 

1. Introduction

2. I am Chris Llewellyn , a parent at Hove Junior School, part of the Hove Learning Federation which has recently undergone a Consultation on converting to become part of the Aurora Academies Trust.

3. I am a charity director and previously was an LA Governor of Loughborough Primary School in London for 8 years.

4. I am submitting evidence because taking part in the recent consultation alerted me to a variety of issues related to the conversion process and the regulation of academies in general which need to be addressed. I am concerned that the Bill as it currently stands will not resolve some of the more fundamental problems.

5. Executive Summary

6. My primary points are

1) The Department of Education is the Principal Regulator for Academy Trusts but is not consistently ensuring that Trusts comply with their obligations under charity law.

2) Currently an off-shore group can act as sponsor to a MAT and have a level of control over Uk government funded schools without paying corporation tax in the UK.

7. DfE Regulation

8. I am concerned that currently the Department of Education is not adequately fulfilling its role as Principal Regulator for Academy Trusts.

9. As part of Due Diligence around the recent academisation proposal, I researched Aurora Academies Trust. Currently Pansophic Learning Uk (PLUK ) has its registered HQ at Glenleigh Park Primary Academy, one of the Aurora Schools. The contact is Martha Burnige, the company secretary for PLUK and also the Chair of AAT.

10. PLUK is a for profit company which is part of the Pansophic Group. In normal business between two unconnected parties, you would expect one to pay the other for the use of their premises for this purpose. Companies House provides a useful list of agents who will perform this service for a fee- https://www.gov.uk/government/publications/formation-and-company-secretarial-agents/company-formation-agents-and-secretarial-agents

11. As is obvious from the A AT published accounts and has been confirmed by the AAT Chair no payment has been made for this service so currently the AAT is allowing its property to be used in a way which would normally involve payment by the for profit company. On the face of it this is a clear breach of charity law, as charity property should only be used for its charitable objects, unless it is recompensed at a market rate.

12. As Academy Trusts are "Exempt Charities" the Department for Education acts as their Principal Regulator- the  MoU  between the Charity Commission and the Department for Education on their regulatory operations is useful here. At 19 the Secretary of State for Education is identified as the Principal Regulator for Academy Trusts of which one is the Aurora Academies Trust.

13. 21 reads 

14. "Principal Regulators have a ‘compliance objective’, which is to do all they reasonably can to promote compliance by the trustees of the charities for which they are responsible with their legal obligations in exercising control and management of the administration of their charity (section 26 of the Act). If they identify a concern about a charity, they may invite the Commission to use its powers of investigation and intervention under the Act. This does not affect the use by the Principal Regulator of its own regulatory powers." 

15. A complaint was made to the DfE about the apparent breach on the 4th December. An initial reply from the SE Regions Group on the 19th December stated "The issues you have raised are outside the DfE’s remit – our regulatory oversight is restricted to the Academy Trust Handbook and associated documents (e.g. Funding Agreements)."

As the issue of the Trustees breaching Charity Law is clearly within the DfE's remit as principal regulator, I replied with an email of 23rd Dec went into detail on the parts of the ATH and associated docs that are of concern.

The next reply I had from SE Regions Group, confirmed that the DfE is responsible for investigating any breach of charity law by Academy Trusts, but also stated " It is not within the department’s remit to carry out the regulatory functions of other government entities, including Companies House and/or the Charities Commission. If you are concerned that a breach of any regulation or principle of either of the aforementioned bodies has occurred, you should contact the relevant entity, and they will be able to investigate further.".

It is not clear why the alternative bodies were brought up at this stage as the point of this complaint was to alert the relevant Principal Regulator for AAT of a potential breach of charity law. My email of Jan 9th explained why the DfE is the body for this potential breach to be reported to.

The next reply was on 30th Jan, stating in part "We are satisfied in the governance arrangements at Aurora Academies Trust and do not consider a shared registered address to be adequate grounds for an investigation into any potential costs of a mail forwarding service or any breach of charity law. "

This reply was concerning because of the use of the term "Shared Registered Address". the issue is not that the address is shared, ie if the two parties had a shared registered address at a property unconnected to either party, then that would be a very a different situation. The issue here is that AAT charity property is being used for a purpose solely for the benefit of PLUK and which is unconnected to AAT’s charitable objects and there is no compensatory payment.

It was also ambiguous whether an investigation had taken place into the potential breach of charity law. This was clarified by the email of the 31st, confirming that no investigation had taken place, so at this stage the SE Regions Group had not taken a view on the legal issue at stake.

So at this stage it is still not clear whether the DfE is comfortable with the for profit UK arm of AAT's using charity property pro bono as its registered address. In the view of every charity professional I have spoken to this is a clear breach of charity law, and it is frustrating that this has not been dealt with appropriately by the DfE and raises questions on their capacity to effectively ensure that Academy Trusts are complying with their legal obligations.

16. A separate clear example of the ineffectiveness of the DfE’s oversight of Academy Trusts is provided by the Financial Statements of the Wandle Learning Trust- https://wandlelearningtrust.org.uk/about-us/key-documents/financial-information

17. For years 22/23 and 23/24 no Reserves Policy has been included in the Trustees Report. This is a crucial part of a Trust’s transparency around its financial management and the Academies Accounts Direction 23/34 at 2.16 goes into detail about what is needed. In the case of the Wandle Learning Trust this has not been included, for the last two years. This is particularly relevant for this Trust as they operate a successful commercial operation which is currently reviewing its VAT position and so it is extremely important to know how the schools reserves relate to those of the wider operation. Unfortunately at this stage the DfE have allowed them to not comply with their basic issues of transparency. In a standard charity there would be potential repercussions for this kind of failure of governance, for example they would be less likely to receive grants from trusts, however in this case, and without any effective Regulator, there is no consequence for governance failure. This cannot be right.

18. Tax Position

19. The recent consultation has also highlighted the anomalous tax position of Pansophic Learning, which is publicly described as the Sponsor of AAT.

20. Pansophic Learning, the overall holding company is registered in the Cayman Islands. The Aurora Chair in a public meeting at the beginning of the recent consultation admitted that this was done for tax purposes. The only Uk operation of Pansophic Learning is via Pansophic Learning UK the limited company based at the school. This is the organisation which is the sole member of Aurora Education Trust , the direct sponsor of AAT. From AAT’s recent accounts the Aurora Education Trust as Principal Sponsor has the ability to appoint up to 8 Trustees to the AAT Board.

21. From its published accounts it’s clear that PLUK’s net liabilities have grown in every year from 2017 and that over that time it has had employees in this country, including Martha Burnige, who has been fulfilling a role as General Manager of International Schools. Because PLUK’s net assets have decreased in every year since 2017 and because it records no corporation tax creditors or any potential tax disallowable items, it is safe to assume that it has not paid corporation tax in the UK over the period. The Aurora CEO was not able to provide any clarity on this matter. This is despite PLUK directly employing MB to play a management role for the Pansophic Group in international schools based in Switzerland and elsewhere.

22. So currently an organisation which has not contributed to the UK Corporation Tax take since 2017 is able to have a level of control over 7 state schools. It does not seem right that a multinational company which has no natural links to this country is able to have the level of responsibility that it currently exercises over Uk children. There must be a mechanism for ensuring that bodies which exercise a level of control over schools are genuinely situated and active in the UK.

February 2025.