EXCLUSIVE: Harris owes nearly £6m in unpaid pledges for academy capital funding, FoI reveals
The Harris Federation has not yet paid nearly £6m of the £6.5m it promised for academy capital funding, Freedom of Information (FoI) reveals.
Early academy sponsors were required to pay 10% of capital costs for each academy, capped at £2m. This was replaced by endowments whereby sponsors created an endowment fund. The fund’s interest was intended to provide income for each academy. This requirement was abandoned in 2010.
In 2011, the Public Accounts Committee (PAC) found the Department for Education (DfE) had ‘struggled to enforce payment of outstanding debts’ from academy sponsors. Only £121m of promised £147m of capital contributions had been received. There was a shortfall of £4m on endowment contributions due by end of December 2010.
PAC was unhappy about the ‘status and recoverability’ of outstanding money promised by academy sponsors. It recommended the DfE should agree settlement programmes and check payments were duly received.
In 2012, ministers stopped requiring academy trusts to continue raising funds for existing endowments. Contributions made via endowment, if any, should appear in academy trust accounts, the DfE told me. These contributions are not checked by the DfE.
But what of the pledged capital costs? £26m was outstanding by the end of December 2010: nearly £13m remains. 44% of this, £5,756,788, is owed by just one academy trust: Harris Federation. Harris originally pledged £6.5m for six academies – it has paid just £743,212. One repayment agreement is in place for just one of the six academies. The payment agreed in this arrangement is not yet due, FoI reveals.
Just over half (56%) of the outstanding £13m is owed by nine academies. Agreements or ongoing repayments are in place for five. The DfE is discussing with the London Diocesan Board for Schools (LDBS) about repayment of £1m. Oasis Community Learning owes just under £4.4m for three academies. The DfE is in dialogue with Oasis about a payment plan for nearly £400k at one. No agreement is in place with Oasis for recovering £4m in respect of two.
In 2010, the DfE admitted it had been unable to discover amounts pledged or balances outstanding at four academies* – two of them were Oasis Bristol Hengrove and Oasis Media City UK Salford. It’s not known, then, whether the £4.4m is the full amount promised and owed by Oasis.
Just over £10m of the outstanding £13m, then, is owed by just two trusts, Harris Federation and Oasis.
PAC urged the DfE to set up formal payment arrangements for money pledged by sponsors in January 2011, nearly six years ago. Yet the DfE has not done so for five Harris academies, three academies sponsored by Oasis and one LDBS academy. Six years is a long time to set up agreements for sponsors to pay money promised before 2010.
*The other two academies where the DfE couldn’t discover how much had been pledged or paid were Pimlico Academy (sponsored by Future, the academy chain set up by John Nash, now Lord Nash, schools minister) and Trent Valley Academy, initially sponsored by E-ACT, now Gainsborough Academy and sponsored by Lincoln College Academy Trust.