‘Shocking abuse of trust’, former PAC chair on high salaries and lavish perks for academy bosses
It is a ‘shocking abuse of the trust,' fumed Margaret Hodge, former chair of the Public Accounts Committee, when told of generous salaries and perks awarded to senior figures in some multi academy trusts (MATs).
Hodge was speaking on Channel 4’s Dispatches (25 July 2016) which used Freedom of Information to discover expenses claimed by some MAT trustees. These payouts, detailed in the Guardian, included first class travel, dining at top restaurants and relaxing at luxury golf clubs.
Such expenses are an ‘irresponsible use of public money’, declared Hodge.
Channel 4 also highlighted ‘related party transactions’: contracts awarded to firms associated with trustees or their families. These transactions should be ‘at cost’, follow proper procurement and declared in MAT accounts. But Hodge wasn’t convinced the ‘at cost’ rule prevents trustees from profiting – such transactions are wrong and should be stopped, she repeated.
The National Audit Office agreed: the ‘at cost’ rule was difficult to evidence, it said. This was especially true for services where costs were ‘subjective’. Trustees could pay a high fee for, say, consultation from a fellow trustee claiming s/he was a highly-respected figure in demand internationally. This was the reason given by Aspirations Academy Trust for paying a minimum ‘total day rate cost’ of $120,000 to US-based trustee Dr Russel Quaglia.
Dispatches found high salaries paid to MAT senior executives. Daniel Moynihan, CEO of Harris Federation, earns £395k per annum. Husband and wife team Stewart and Paula Kenning together earn £400k pa at Aspirations Academy Trust.
Hodge said high wages and expenses were ‘beyond belief’ and not a ‘proper use of taxpayers’ money’. The Department for Education, however, condones them by saying they can ‘save money’. It’s unclear how dining at expensive restaurants or servicing the CEO’s car is saving money. The DfE says it takes swift action when abuse is discovered. It appears, however, that eye-watering salaries to MAT chiefs, fully declared in MAT accounts, don’t amount to abuse. And the expenses discovered by Dispatches had to be dug out via FoI – they weren’t obvious in the MAT’s accounts.
The Education Funding Agency, the department which oversees academy finances, has lost 20% of its staff. But as every year passes, the number of academy trusts increases. This Government is committed to all English schools becoming academies. If taxpayers’ money is to be used for the purpose intended – education – and not used extravagantly, then rules governing how MATs use public money need overhauling. Relying on independent auditing isn’t sufficient: auditors don’t assess value for money.
Teachers faced with redundancy as MATs attempt to save money will understandably be angered if they discover their MAT’s executive principal has been awarded a high salary. And parents forced to buy costly uniform from a sole supplier will be infuriated if they find out the sole supplier is an academy trustee.
The Government is responsible for ensuring taxpayers’ money is used properly. Analysis by Dispatches and the Guardian shows it is failing in its duty to ensure money allocated to education is paid for education. If MATs are not to be viewed as cash cows for individual trustees, then the EFA could begin by capping the salaries of MAT senior staff and banning related-party transactions.