Latest Public Sector News

17.09.14

Academy schools open to conflicts of interest – MPs

Arrangements between Academy schools and sponsors could be open to conflicts of interest, new research published by the Education Select Committee has revealed.

The research, carried out by the Institute of Education at the University of London, examined the potential for conflicts of interest to arise in the relationship between academies and sponsors under the current sponsorship model.

It found that the framework that guides how academies manage conflicts of interests had improved significantly over the past two years. However it went on to say: “The general sense from the literature and the evidence collected for this study is that the checks and balances on academy trusts in relation to conflicts of interest are still too weak. In the course of the research we came across a significant number of real or potential conflicts of interest that we found concerning”.

It identifies four broad areas where real or perceived conflicts of interest may occur under the 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.

Graham Stuart MP, who chairs the education committee, said: “Academy sponsors can bring much-needed skills to schools and help raise standards. This important research has identified, however, a number of loopholes in the current arrangements that could work against the best interests of academies and their students.

“We will question the new secretary of state when she gives evidence to the inquiry next month and ask what will be done to tackle these concerns. The public need to be sure that academy sponsors act only in the interest of their schools and never for other purposes.”

A DfE spokesperson told PSE: “As the report recognises, the vast majority of academy trusts are focused on raising standards of education – often in our most challenging areas.

“All academies are subject to a strict oversight and regulatory regime which has been further tightened since 2010. We are clear that no individual or organisation with a governing relationship to an academy can make a profit from providing it with services. We have also made clear to all academies the consequences of breaching those rules and will not hesitate to take action where we think that has happened.

“We will consider the report’s findings carefully.”

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