Academy trusts are educating increasing numbers of children and handling large amounts of public money. The cost to pupils and the taxpayer of failure are particularly high for multi-academy trusts.
It is therefore crucial that they show the highest standards of governance, accountability and financial management.
Too often academy trusts are falling short of these standards and the Department for Education is too slow to react.
The publication of the first Academies Sector Annual Report and Accounts is a welcome step forward in improving transparency and accountability in the sector. Yet the report was not published until nearly fourteen months after the end of academies’ financial year.
The Department now needs to make the Annual Report and Accounts more timely so that it can be used more effectively by stakeholders, including Parliament and parents, to hold the Department and academy trusts to account.
"More than two million pupils are taught by academies in England. The governance and financial management of these schools is fundamentally important to pupils’ educational outcomes and future life prospects.
If parents, Parliament and others are to hold them properly to account, it is vital they have timely access to transparent and detailed information. Academies and the trusts that run them must be judged against the standards expected of other schools funded by the taxpayer.
The cost of failure where an academy chain runs several schools is hugely damaging for pupils and Government needs a better grip of when chains are at risk of failure.
We also see too often a disregard for financial probity in related party transactions.
Publication of the sector’s annual report and accounts is a step in the right direction. But this information would have more practical value were it to be published quicker and with more comparative detail.
The Government has made a clear commitment to provide the 2016/17 account in October this year, and subsequent academy accounts prior to Parliament’s summer recess, and we expect it to honour that.
But the Department for Education must also address concerns arising from the accounts published to date.
Excessive trustee salaries deprive the frontline of vital funds and it is alarming that, in two-thirds of cases where Government has challenged individual trusts on pay exceeding £150,000, it has not been satisfied by the response.
The Department for Education must assert its authority in this area as part of a more proactive strategy to safeguard pupils’ education and public money across the sector.
That means identifying more quickly trusts at risk of financial difficulty, enabling it to intervene effectively.
It must also demonstrate it has a coherent plan to protect schools’ assets and pupils’ interests should a multi-academy trust fail."