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Academy chain hit with accounts warning

news | Published in TES magazine on 19 April, 2013 | By: Richard Vaughan

Concerns grow over rapid expansion of larger sponsors

One of the country's largest academy chains has been hit with an official warning by the government over serious concerns about the financial management of its schools, TES can reveal.

E-Act, which runs 31 schools, has become the first sponsor to be issued with a "financial notice to improve" by the Education Funding Agency (EFA) after the government body found a string of "weaknesses" in the reporting of its schools' accounts.

Academy accounts warningThe decision to issue the warning raises further concerns over the rapid expansion of academy chains and their capacity to manage the performance and standards of their schools.

The news comes just weeks after it was revealed that the country's largest academy sponsor, Academies Enterprise Trust, which runs 65 schools, had been barred by the Department for Education from taking on any new schools because of fears around its continued growth.

The notice to improve is not the first time concerns have been raised over E-Act's financial arrangements. In 2008, a government inquiry found that the sponsor had failed to comply with financial management requirements, leading to the resignation of the then chairman Lord Bhatia.

The chain courted more controversy over the pay and expenses of its director general, Sir Bruce Liddington. The former schools commissioner received almost £300,000 in 2010-11 in pay and pension contributions, making him one of the highest paid people in education. He was also forced to pay back expenses after it emerged that he claimed for a stay in a luxury hotel.

Sir Bruce stated in 2011 that he wanted to create a "super-chain" of 250 academies within five years, but he was forced to scale back his plan after it led to unrest in the chain's boardroom.

Among the concerns listed by the EFA's warning was that E-Act did not have enough data coming from each of its academies to properly hold its schools' finances to account.

TES understands that the chain has spoken to schools minister Lord Nash, telling him that it will not attempt to take on any more schools until the EFA is satisfied with its response. The chain has three months to respond to the warning.

Mary Bousted, general secretary of the Association of Teachers and Lecturers, said the development called into question the DfE's policy of allowing rapid expansion of academy chains.

"There are very big questions to be answered here," Dr Bousted said. "No chain should be allowed to expand unless it can demonstrate that it has effective systems in place. How did the DfE allow the chain to acquire more and more schools when it had question marks over its financial governance?

"And why isn't this information out in the public domain? The money given to academies does not come from the fairy godmother - it is taxpayers' money so it should be totally transparent when there are issues about a chain's finances."

A high-profile report published by the independent Academies Commission earlier this year raised concerns about academy chains expanding too quickly. Becky Francis, one of the commission's directors and professor of education at King's College London, said warnings such as the one issued to E-Act would become more commonplace.

"The report made it clear that we were concerned about the speed and scale at which some of the academy chains were expanding," Professor Francis said. "The commission had noted how late this kind of regulation was being exercised, so it is encouraging that these notices are now being issued by the DfE."

The DfE has stepped up its monitoring of academies, revealing last month that it had been forced to issue a raft of warning letters to academies over the past two years relating to concerns over standards and performance.

And earlier this year TES revealed that ministers were requesting detailed performance scorecards every six weeks from about 100 secondary academies that they deemed to be in danger of falling below the GCSE floor target.

In a statement, E-Act said it was "confident" that it would be able to meet the concerns raised by the EFA in its financial notice to improve. "Many of the required changes have already been implemented and we are confident we can address and resolve these issues by July," a spokeswoman for E-Act said. "Our focus remains on our mission to provide excellence in education."

An EFA spokesman said: "We have issued a financial notice to improve to the E-Act academy trust. This requires the trust to set out the actions needed to address the weaknesses we have identified. We will consider the response before deciding whether any further action is necessary."

CHAIN GANG

Number of schools run by the big academy players:

65 - Academies Enterprise Trust

34 - Kemnal Academies Trust

31 - E-Act

30 - Oasis Community Learning

23 - United Learning

21 - Ormiston Trust

19 - Harris Federation

18 - Ark Schools.

 

Photo credit: Alamy

Original headline: Academy chain hit with official warning over accounts


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Comment (6)

  • "There is no money tree" (Cameron) - well, except for academies. Disgraceful. And local authorities were supposed to be bad.

    Unsuitable or offensive? Report this comment

    18:07
    19 April, 2013

    johnfconnor

  • Having worked at one of these E-ACT academies from 2008 when they consumed the conversion of an already successful school, I can only say:
    'I told you so and that a leopard does not change it spots.'

    How did the DfE allow super-chains to take over so many schools without any scrutiny over their financial governance(?) is a scam! And Sir Bruce taking home £300K - the highest educational salary in the UK, is an absolute disgrace; not to mention his wife who also works for the company and no doubt, takes home a salary.

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  • Once they run a lot of schools they become "too big to fail" just like the banks! They will then be propped up by the government using taxpayer's cash. Naturally top executive salaries and bonuses will be retained, whilst teacher's wages are frozen.

    The future is obvious but dim witted politicians from all the main political parties don't have enough common sense to see what is coming.

    Unsuitable or offensive? Report this comment

    10:14
    21 April, 2013

    MrJob

  • Its all about the Money - The rich posh boys in the government setting their pals up (and themselves) with pots of tax payers money into the future.

    Disgraceful and sad really

    Unsuitable or offensive? Report this comment

    23:41
    21 April, 2013

    wattie54

  • I also worked at a very successful school that was taken over by E-ACT. It changed from a school with very low staff turn over, where the staff worked as a team to encourage and motivate students to be successful with high added value to one where the concern was how to lower staff wages. Everything that was seen as outstanding by Ofsted was systematically destroyed and nothing comparable was put in its place. Money was spent on inappropriate equipment and then staff in one school were got rid of because of money problems in another. Senior staff disappeared over night with a gagging order. Other staff were encouraged to take voluntary redundances NOW while the money is on the table. Meanwhile the new executive head has an inflated salary. Restructuring meant staff having to apply for the jobs they have held, but for a much lower pay scale. Experienced and caring staff have been replaced by cheap inexperienced staff, with no regard for the students needs . In fact the goal was to remove 95% of the staff by September, one that they may have achieved. Who are the directors who take such large salaries? Can they stand in front of a class, with few resources and get good results? What advice can Sir Bruce give to Gove? How not to do it? Perhaps a Blair favourite is not the right person for a Conservative/ Lib Dem goverment. Further investigation is needed by someone.

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    21:25
    10 May, 2013

    HelenTee

  • Having recently been made redundant from an E-ACT Academy, I feel more than well placed to raise some points.
    Before:- We had normal Governors, unpaid except for expenses Now:- overpaid, selected by the board, a Chair of Governors - A Solicitor - who is paid more for his few hours than the Teaching Assistants. Before:- All Vat was returned the school - Now:- EACT take the vat. Before:- We raised our own orders, Now:- Eact make us use their "Portal" and make us pay a price for the privilege. Before:- Our school had a successful, working IT strategy. Now:- Eact thrust a new IT strategy on us, gave us network switches which are slower than the ones we had. Thrust Northgate upon us to eventually manage the soon to be ruined IT department, between them they forced us to use Toshiba printers etc, they were the wrong equipment for the school - who on the EACT board was getting the backhander?
    Match these impositions with the incompetence of the stand -in -heads & the deputy head, all in the name of Sir Bruce and you successfully turn an Ofsted Successful School into one, which would fail Sats. Maybe someone there realised it and decided on a few changes! They installed a new executive Head - " the Slasher" - since his arrival, we've had Senior Management disappear overnight - banned from contacting anybody -all apparently well paid to keep quiet, the site teams were merged and have since been disposed of, replaced by temporary staff with no local knowledge. Now they are making everybody apply for their own jobs, but at reduced pay scales (obviously!) and now they haven't got enough money to pay for the redundancies!! Surprise, surprise!
    Unnecessary pressure put on all staff to be more successful with less resources, fewer faculties, fewer experienced heads of faculties, staff on the verge of breakdowns. All in the name of keeping Blair Babe - Sir Bruce and his merry men & women deep in the trough of greed!!!
    Staff used to do anything for the students and the school, stay late, do trips & lessons outside school hours. Now no-one does any more than they have to. What of the students? They are obviously a small cog in the mechanism of progress, but I honestly (stupidly?) thought that's what education was all about. Apparently I'm wrong - they are just a hindrance. If they could, I'm sure that Sir Bruce and co would try and find a way to dispense with them!
    I'd continue, but I guess you've got the gist of what I'm saying.
    Please stop operations like E-ACT and people like Sir Bruce. Is Mr Cameron hoping to bring himself down? We had enough problems caused by Blair, no more please. Thank you!

    Unsuitable or offensive? Report this comment

    21:30
    10 May, 2013

    disconcerted

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