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UNISON calls for new government inquiry into academy chain accused of misusing public funds

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The government must launch a fresh inquiry into Bright Tribe following new allegations that the troubled multi-academy trust has misused public money, says UNISON today (10 Sep).

Tonight, Monday 10 September, BBC Panorama will air its investigation examining the financial oversight of academies. The programme will look at the Bright Tribe Trust and Wakefield City Academy Trust in particular.

DfE said they are clear that the overwhelming majority of academy trusts are stable and financially compliant:

  • Fewer than 2% of academy trusts are subject to an active Financial Notice to Improve;
  • In 2015/16 auditors concluded that there were no regularity exceptions in trust accounts for over 95% of trusts; and
  • At the end of the academic year 2016/17, 91.6% of trusts had a cumulative surplus and 2.3% had a zero balance.

DfE will rebroker academy trusts where necessary to intervene where there are failures, but the numbers are low:

  • The total number of academies that have moved trust between financial years 2013-14 to 2017-18 was 628; and
  • The proportion of academies that have moved trust over this time has increased from 0.5 per cent to 3.3 per cent of all open academies in England.

Since 2010 DfE have converted almost 7,000 schools, many of which are in the most disadvantaged areas of the country. In addition, more than 480,000 children now study in sponsored academies rated Good or Outstanding that were typically previously underperforming schools.

Parliamentary Under-Secretary of State for the School System Lord Agnew said:

We take the use of public money very seriously and will not tolerate those who try to exploit the system for personal gain. Academies have to provide more information on their accounts than other schools and the most recent published financial audit found that more than 95% trusts had no issues.

Where funding is given to a trust for a specific reason, it must be used for that purpose and we have clear rules and systems in place to hold them to account if we are not satisfied – including terminating funding and recovering money that has not been spent in the agreed way, as we have done with Bright Tribe Trust. We will continue to clamp down on financial wrong-doing if it arises and are giving the Education and Skills Funding Agency more powers to tackle this, including making trusts declare all related party transactions and seek approval for any transaction over £20,000.

Whitehaven Academy is being re-brokered into a strong academy trust and we’ve provided substantial capital funding to rebuild much of this school. But I am clear that Bright Tribe Trust is not representative of all academies, and more than half a million children are now in good or outstanding academies that were typically previously underperforming schools thanks to innovative trusts across the country.

It follows revelations set to be broadcast tonight by BBC’s Panorama programme that Bright Tribe – which runs ten schools in England – received funding for work on schools that was either not finished or simply never carried out.

UNISON, whose findings contributed to Panorama’s investigation, says the government has failed to act properly.

Speaking today (Monday) in the public services debate at the 150th annual Trades Union Congress in Manchester, UNISON general secretary Dave Prentis UNISON demands that Labour in government ends privatisation from day one:

“We’re calling on a Labour government to act immediately and end privatisation from day one. There must be a commitment to abolish the divisive, destructive and damaging policy of privatisation. There must be no reviews, no endless reports, but an immediate end.

“Privatisation is all about taking from the needy and giving to the greedy. It’s the pinnacle of vulture capitalism that leaves chaos, waste and human tragedy in its wake.

“Companies like Capita, G4S and Carillion eat up taxpayers’ money, and in return, give vulnerable people the bare minimum service they think they can get away with.

“Thirty miles from here lies an unfinished hospital, the Royal Liverpool. A £300m building site abandoned by Carillion, as the company crumbled to dust.

“Carillion was a private company lauded by successive governments, deemed too big to fail. 

“But its collapse left workers unpaid and apprentices sacked. Thousands of workers left worried about whether they still had jobs, their security wiped out overnight as their future came crashing down. 

“The collapse of Carillion symbolises the failed dogma of privatisation. With the Royal Liverpool an epic monument to the trail of destruction wrought on our communities.

“Where Grenfell will forever be associated with neglect, so Carillion will forever be associated with greed. 

“For decades privatisation was heralded as the holy grail, a panacea. It was claimed that public services would be more efficient and cheaper.

“But PFI hospitals and schools are the equivalent of buying a house using Barclaycard.

“Efficiency shouldn’t mean elderly people shunted around privatised care homes, as hedge fund managers see where they live not as care homes but as real estate. The people in them just collateral damage. 

“Efficiency shouldn’t mean workers, caring for vulnerable citizens in our communities, being restricted to 15 minute visits to wash, feed and be a friend to those in need.

“Now we have the creation of subsidiary companies, or subcos, where cleaners, catering and administrative staff are being shoved out of the NHS. 

“They’re being employed on worse terms and conditions and inferior pensions, doing the same crucial jobs but for far less. And all this so their NHS trust can have a VAT scam. 

“We’re opposing this privatisation of our NHS with industrial action. At the Wigan, Wrightington and Leigh NHS Trust, UNISON members took weeks of strike action and stopped the privatisation. 

“And let’s not forget the academies, like Bright Tribe – allegedly siphoning off hundreds of thousands of pounds from our children’s education.

“Watch Panorama tonight – a programme which UNISON contributed to – for the full shocking story.

“All of this is what privatisation, outsourcing and PFI looks like.”

Three years ago UNISON made a complaint to the then regulator, the Education Funding Agency (EFA) and subsequently to the National Audit Office (NAO), about the Bright Tribe academy chain, sponsored by Helping Hands Trust Ltd, a charity set up by multi-millionaire businessman Michael Dwan.

UNISON’s complaint in July 2015 was the original trigger for an investigation by the EFA into financial management, internal audit arrangements and the way contracts for goods and services were being awarded.

With no apparent bidding process, the contracts were awarded to companies linked to Michael Dwan or other key figures at Bright Tribe and the Adventure Learning Academies Trust (ALAT), Bright Tribe’s sister academy chain.

While the EFA was still investigating Bright Tribe, the government gave it more money – this time £1m to help turn around underperforming schools in the North.

UNISON, unhappy with this and the EFA’s response to its complaint, sent a report, “Conflicts of Interest? to the NAO about potential undeclared conflicts of interest at Bright Tribe and ALAT.

UNISON says the latest revelations highlighted by Panorama raise important questions about the use of public funds, the ability of the academies regulator to protect taxpayers’ money and the lack of funds the regulator has to do its work.  

The union believes there was a culture of fear across Bright Tribe’s academies, with pressure put on staff to sign non-disclosure agreements, which may have led to commercial interests being protected at the expense of pupils, parents and taxpayers.

UNISON is calling on the government to carry out a detailed inquiry into the allegations made by Panorama. This is so proper checks can be made on academy spending, and academy schools can become more accountable to local communities.

UNISON head of education Jon Richards said: “It’s unclear why the government decided to give Bright Tribe £1m while it was still under investigation. Ministers seem to have allowed a situation to develop where commercial interests overrode taxpayers’ interests and the public good. Pupils, parents and the public purse have all paid the price.  

“This raises serious questions about how not-for-profit organisations are audited and what happens to the squeezed public resources that are meant to be spent educating our children. An inquiry is needed urgently to ensure that all lessons have been learned.”

Michael Dwan’s lawyers have said “each and every allegation raised by the BBC” is completely denied. 

Panorama is due to be broadcast on BBC1 at 8.30pm this evening (Monday). UNISON’s head of education Jon Richards was interviewed as part of the programme.

UNISON made a complaint in July 2015 to the EFA (now the Education and Skills Funding Agency). It responded by saying it had taken the allegations raised seriously and that officials had been asked to investigate ‘as a matter of urgency.’

In January 2016 UNISON submitted Conflicts of Interest? to the NAO because it was concerned by what it felt was an inadequate response from the EFA.

UNISON told the NAO it was concerned that the arrangements created a perception that Bright Tribe and ALAT were developing as ‘undisclosed subsidiaries’ of ES Management Services Ltd (the parent company of companies connected to the academy sponsor’s representative Michael Dwan).Conflicts of Interest? identified at least four undeclared related party transactions where payments appeared to have been made to companies whose shareholders included trustees of the academy trusts or that were controlled by them.

The report also identified financial discrepancies between two sets of accounts, significant sums of money spent on secondments and core teams in both academy trusts that were virtually identical. It also identified that the business address of Bright Tribe was also the registered office for ES Management Services Ltd and a host of other companies ultimately controlled by Michael Dwan.

Alarm bells were initially raised by a UNISON organiser based in the East of England, Hazel Corby, who noticed that staff at the Colchester Academy were being transferred to companies that had the same Stockport address as the Bright Tribe headquarters. Michael Dwan’s charity Helping Hands Trust Ltd withdrew from Bright Tribe and ALAT in July 2018.

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