Academies: Finance:Written question - 150686

Q
Asked by Lucy Powell
(Manchester Central)
Asked on: 06 June 2018
Department for Education
Academies: Finance
Commons
To ask the Secretary of State for Education, pursuant to the Answer of 30 April 2018 to Question 138047 on Academies: Finance, what collated central information is held by (a) his Department and (b) it's agencies on related party transactions undertaken by multi academy trusts.
A
Answered by: Nadhim Zahawi
Answered on: 15 June 2018

Related party transactions involving academy trusts encompass both receipts by and payments by trusts and so there are separate totals for each. This information, including both payments made by and receipts received by academy trusts, was included for the first time in the Academies Sector Annual Report and Accounts for the academic year 2015 to 2016. The information is not collected by single-academy and multi-academy trusts and so reflects all academy trusts.

Payments made by academy trusts to related parties:

Number of Related Party Transactions

2015/16 payments to related parties (£000)

£1 to £50,000

2,636

24,627

£50,001 to £100,000

183

12,585

£100,001 to £200,000

119

16,006

£200,001 to £250,000

25

5,662

£250,001+

70

61,922

TOTAL

3,033

120,802

Income received by academy trusts from related parties:

Number of Related Party Transactions

2015/16 receipts from related parties (£000)

£1 to £50,000

857

9,574

£50,001 to £100,000

135

9,541

£100,001 to £200,000

88

11,471

£200,001 to £250,000

16

3,565

£250,001+

59

39,066

TOTAL

1,155

73,217

As the tables above show, £120,802,000 (62%) of the total value of all related party transactions is accounted for by academy trusts making payments to related parties, whilst £73,217,000 (38%) represents income received by academy trusts from related parties. Income received from related parties includes; transactions with subsidiary companies or shared services, diocesan education authorities, related charities as well as donations or services provided by trustees, or trustees’ family members.

This information was not previously collected in this format and we do not have comparable analysis for previous years.

Academy trusts, including multi-academy trusts, are required to disclose all related party transactions in their audited annual accounts, which are publicly available for all years the academy trust has been in operation. The department has recently introduced additional requirements through the 2018 edition of the Academies Financial Handbook, in relation to related party transactions, which will take effect from 1 April 2019. These will require trusts to notify the department of any such transaction in advance of them occurring and to seek approval for any where the value, individually or in aggregate, exceeds £20,000.

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