Payments made by Collective Spirit Free School (CSFS), Oldham, and Manchester Creative Studio (MCS) to a related party, Collective Spirit Community Trust, left such a weak audit trail that the Education and Skills Funding Agency (ESFA) was unable ‘to assure the regularity of funds spent’ by the two schools.
ESFA’s recently-published report into MCS and CSFS said ESFA’s investigation ‘casts significant doubt on the legitimacy of funds’ given to Collective Spirit Community Trust (CSCT).
The investigation unearthed bank statements which showed nearly £500k was paid to CSCT in the academic year 2016/17. But ESFA ‘encountered significant difficulties’ in matching payments with invoices.
If this weren’t bad enough, probing by Warwick Mansell found the constitution of Collective Spirit Oldham Academy Trust, the trust which ran the free school, was changed before CSFS opened. This alteration appears to have removed influence which the government initially had.
The trust was founded by just two members, Raja Miah and Shamim Miah (not related). Trust members have the power to appoint trustees. Raja Miah appeared to have been the trust’s chief executive for a time. Company House records show he was also the trust’s accounting officer or ‘acting’ accounting officer for three years.
The unusual ‘control structure' at Collective Spirit Oldham ‘seems to raise serious questions as to how the government allowed it to be set up in the way that it was in the first place,’ Warwick writes.
Company House records show payments were also made to Collective Community Partnerships UK (CCPUK) CIC, a community interest company, now dissolved. Raja Miah was one of its two directors. ESFA does not mention this company despite the transactions appearing in the academy trust’s accounts. Payments to CCPUK totalled £137k in academic year 2013/14 and £200k+ in 2014/15.
When Collective Spirit Free School opened in September 2013, it was on land which Oldham council said had been taken from them by the then schools minister Lord Nash. Oldham council estimated that the loss to Oldham in land value and lost council tax from this land grab was £4m.
*The full amount given to CSFS may be less than the total of these two amounts because of the overlap between academic and financial years.