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The government has failed to get a handle on excessive salaries paid to academy trust leaders, according to parliament’s spending watchdog, which also criticised the use of tens of millions of pounds in public money to “prop up” poorly managed trusts.
According to a report by the Commons public accounts committee, the number of academy trusts paying at least one senior staff member more than £100,000 went up from 1,875 in 2019-20 to 2,245 the following year. Meanwhile, a promised review of high pay by the Department for Education has still not been published.
The committee highlighted a lack of transparency surrounding academy finances in its report on the sector, which was published on Friday just days before the DfE is expected to unveil plans to extend its academies programme to eventually include all schools in England.
More than half of England’s pupils are educated in academies across 2,700 trusts and about 43% of all state-run schools are academies, which are independent of local authority control. While the majority of secondaries have become academies, primary schools have been more reluctant and there continues to be strong resistance in many communities.
MPs on the committee said the sector’s lack of financial transparency undermined parents’ capacity to hold school leaders and the DfE to account, both for their use of public funds and the education they provide.
They also accused the DfE of not yet having a sufficient handle on excessive pay within the sector, which meant the department could not assess whether public funds were being well spent. The committee said using public money to prop up academy trusts in difficulty failed to address poor financial management within trusts.
An additional £31m in financial support was paid to 81 academy trusts in 2019-20, the majority of which was non-repayable. The following year, the government wrote off £10m of academy debts, including £5m accrued by a single trust.
“We are 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 report said. At the other end of the scale, there were fears that small schools in rural areas – which may be less attractive to trusts – could become “orphaned”.
The report also raised concerns about uneven finances in the academies sector. In the north of England, a far higher proportion of trusts report deficits – 8% compared with 2% in the south-east. Meanwhile some trusts are building up large cash reserves, which may be for specific capital projects, but the DfE does not know so cannot challenge them.
The DfE is expected to publish its long-awaited schools white paper early next week, which is expected to focus on the government’s long-held ambition to make all schools academies.
Meg Hillier, the committee chair, said: “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.
“This unacceptable lack of transparency and accountability to parents and taxpayers must be resolved before the DfE presses ahead with plans to consolidate all of our schools into academy trust groups.”
A DfE spokesperson responded: “Schools across the country continue to have high standards of financial management and governance, with the latest published data showing that 95.9% of academy trusts have balanced accounts. 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.”
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