EXCLUSIVE: School Minister’s academy chain has paid pledge in full

Janet Downs's picture
 4

Future Academies, the academy trust set up by John Nash before he became Lord Nash and schools Minister in the Lords, pledged £2m in endowment funds to Pimlico Academy in 2008.

In 2011, the Public Accounts Committee (PAC) was concerned that money promised by academy sponsors for capital expenditure or endowment sponsorship would not be forthcoming:

We were also concerned that some existing sponsors had failed to fulfil the financial contributions they originally pledged to their academies. The status of some of these debts is unclear and, especially as sponsors of new academies are no longer required to make a financial contribution, there is a risk they will never be paid.

The Department for Education (DfE) told the PAC at the time that it had been unable to discover any information about money pledged to four academies.  One of these was Pimlico Academy.

It was strange for the DfE to claim it couldn’t find these figures when an internet search found the data in seconds.   A Parliamentary Written Answer written in 2008 showed the level of Future’s endowment commitment to Pimlico. 

It wasn’t known, however, how much of the pledge had been paid by the time PAC asked for the data.  When I asked last year, the DfE was unable to give details of how much total endowment money had been received to date because ministers had removed the obligation for academy trusts to continue raising money for existing endowments in 2012.  The DfE said:

‘This meant that the Department would no longer enforce existing Deeds of Gift. Given this change the Department no longer maintains up to date information on such contributions.’

I sent a Freedom of Information request to Future Academies asking how much of their £2m pledge had been paid.  The Trust told me today, ‘The £2,000,000.00 was paid in full over the period 2010-2014 into a fund established for the benefit of Future Academies.’

Future Academies may have paid its endowment sponsorship in full but we do not know how much endowment sponsorship from other academy trusts is still outstanding.  And if the DfE isn’t checking, then it’s likely that money promised to academies pre-2010 may, as PAC said, not be recoverable.

NOTE:  We do know how much is still outstanding for capital pledges.  The amount outstanding in October 2016 was £13m including nearly £6m owed by Harris and £4.4m by Oasis.

 

 

 

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agov's picture
Wed, 01/02/2017 - 13:34

Is it me or it that a typo? Future Academies paid £2m to itself?


Janet Downs's picture
Thu, 02/02/2017 - 08:14

agov - before 2008, academy sponsors had to promise to pay up to £2m for capital expenditure at each of their academies.  This was changed in 2008.  Sponsors had to pledge to set up endowments and the interest would be used to support their academies.  Future pledged £2m and has paid this into their endowment fund as promised according to the FoI response I received this week.

The problem is that the Coalition said sponsors who'd pledged endowment funds needn't continue paying money into their funds.  Then the DfE said it wouldn't be checking the amount of funding provided to academies via endowment interest.  It absolves itself of responsibility by saying the info would be in annual accounts.  But it would be difficult, if not impossible, to check accounts for those academy trusts which pledged endowments.  First, there's a large number.  Second, academy trust accounts cover all their academies so it would be difficult to discover how much promised support from endowments was being paid to each individual academy (if any).  Third, the payments might be bunged under another heading such as 'charitable donations'.

All we can say in the case of Future is that it has paid the promised £2m into an endowment fund to be used on behalf of Pimlico Academy.  What we don't know is how much money from the fund is used to support Pimlico.  But that's the case with all promised endowment funding.  Perhaps PAC, or the NAO, needs to look at this again.


agov's picture
Thu, 02/02/2017 - 10:28

Thanks Janet. So does that mean there is no information on where the money came from i.e. is it just taxpayer money that the school would have received anyway or something else?


Janet Downs's picture
Thu, 02/02/2017 - 17:25

agov - in theory, sponsorship of an academy was supposed to be altruistic.  The sponsor was supposed to stump up cash to help each academy sponsored.  At first this was for capital building.  As I've noted elsewhere, not all of this promised capital funding was received by the DfE (hence PAC's concerns, also NAO earlier).  But the new academies were built.  This must mean the taxpayer paid the promised money in the hope (?) the DfE would eventually be paid.  But in the case of some capital sponsorship, especially Harris (nearly £6m ) and Oasis (c £4.4m), the taxpayer hasn't received the money.

The position re endowments is more fuzzy.  Again, the sponsor was supposed to set up an endowment and the interest from it was supposed to help each academy.  But we don't know how much of the pledged endowment was ever paid into each endowment because the DfE isn't checking and has said sponsors needn't keep putting money into endowments.  

I expect the DfE early in the Coalition years thought that if it was to attract enough sponsors and academy trusts for wholescale academy conversion, the requirement to stump up money needed to be removed.  This is exactly what happened.  Sponsorship is no longer the altruistic action it was supposed to be (a cynic could say some sponsors were actually working in their own interests by, say, leaning on their academies to buy services from them, or in the hope of getting a gong.  Wasn't there some scandal about cash for honours in the Labour years?)


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