19 September 2014
Regulations for academy schools are ‘too weak’, according to a report commissioned for the Education Select Committee.
Graham Stuart, Chair of Education Committee, said that the research had identified ‘a number of loopholes in the current arrangements that could work against the best interests of academies and their students.’
The report states that the checks and balances on academy trusts in relation to conflicts of interest are still too weak; while cases of deliberate fraud are rare, many of the instances, where real or perceived conflicts have arisen, are the result of people being asked to work too fast with too few controls.
Four broad areas have been identified by the research, where real or perceived conflicts of interest may occur for Academy Trusts under current arrangements:
Connected (or related) party transactions. For example, where an individual on the board of a Trust benefits personally or via their companies.
The provision of paid for services. For example, where the sponsor supplies a school improvement curriculum or back office service to a trust under a license that prevents the Trust from changing supplier (a form of tie-in currently permitted for provision of such services only ‘at cost’ and not for profit.)
Less tangible conflicts that do not (directly) involve money: For example, inappropriate control exerted in the Trojan Horse schools and an FE College deciding (in its own interest) to close the 6th form at a local school where it is the sponsor.
Conflicts that arise in the wider system: For example where a contracted Department for Education (DfE) Academy Broker also works for an academy Trust that they invite to pitch for a new school.
Head of Policy Not-for-Profit at ICSA, Louise Thomson said: 'Public assets should be used in the manner intended and a thorough induction for board members is essential to ensuring those resources are used legally, effectively and efficiently ... that fosters and maintains the confidence of pupils, parents and the wider public.'
Thomson commented further that a governance professional, such as a company secretary, was best placed as an adviser to the board 'to ensure that it takes decisions in the best interests of the school and its pupils, identifying and managing conflicts of interests and ensuring that the highest levels of scrutiny and probity are in place'.
Company secretary for single and multi-academies, Katie Paxton-Doggett said: 'Conflicts of interest should be handled effectively by someone who understands the issues and can put proper internal processes in place so that not only is there no potential for conflict to affect decision-making but also that the system is transparent and allows confidence in the checks and balances.'
The research was commissioned from Professor Toby Greany and Jean Scott of the Institute of Education, University of London. It examines the potential for conflicts of interest to arise in the relationship between academies and sponsors under the current sponsorship model.
|How to Run an Academy School by Katie Paxton-Doggett|
'Conflicts of interest should be handled effectively by someone who understands the issues and can put proper internal processes in place so that not only is there no potential for conflict to affect decision-making but also that the system is transparent and allows confidence in the checks and balances.'