My Lords, my Amendment 79 is part of a wider group dealing with funding of schools and provisions in the Bill for the nationally determined funding for schools in England. My amendment is rather narrow, but it introduces the subject of funding. My concern is the circumstance under which an academy or mainstream school comes under the control of a multi-academy trust, as there are questions about what happens to its reserves or income-generating activities. I want to see them essentially
used, with the agreement of the local governing body of the school, exclusively for the benefit of that school’s pupils. I am very honoured to have an Opposition Front Bench amendment to my amendment, Amendment 79ZA, and I very much accept the principle of what my noble friend is proposing there.
The Local Government Association briefing has a lot of wisdom on the matter:
“At present, MATs can reallocate an uncapped proportion of funding from schools’ budgets within their MAT, with no requirement for transparency as to how this money is spent or the outcomes it delivers. … While we support MATs having a degree of flexibility over budgets within their trust to best meet schools and pupils needs, the lack of public transparency over their expenditure should be addressed to ensure public funding is delivering the best outcomes for pupils.”
I am sure that the noble Lord, Lord Shipley, will speak in this group, but on the first day in Committee he said that there is a danger of a multi-academy trust removing a highly skilled governing body and the trust, to cover its own costs, would end up top-slicing the school’s budgets, making successful, smaller schools a little less viable.
6.15 pm
The recent LSE analysis, to which I have already referred, points out:
“MAT accounts, while having to be signed off by an external auditor, do not provide a detailed account of how public money is spent, and data published by MATs can mask the financial decisions made by individual academies. This is in contrast to the accounts of maintained schools. …This lack of transparency has led to concerns that MATs are using public money to pay excessive salaries – they are not bound by the School Teachers Pay and Conditions framework that governs maintained schools. It has also allowed MATs to pay out compensation costs without setting out how much public money was used to cover this, using opaque reporting practices to hide the payments. … The procurement practices of Academy Trusts are also of concern. ‘Related party transactions’ - business arrangements between a MAT and body with which those responsible for the governance of an academy have a personal connection - were worth £120m in 2015-16, over 3,000 transactions.”
This is the background to my amendment, which is designed to explore what financial safeguards are in place when an academy or maintained school becomes part of a multi-academy trust. My amendment seeks to ensure that, when this happens, first, the reserves need to be independently audited to arrive at an agreed level and, secondly, they should be ring-fenced for the exclusive use of the school for the benefit of its pupils, with any expenditure required to be agreed by the local governing body of the school. In earlier amendments, we have argued that every school should have a local governing board.
I think that this is quite a reasonable set of amendments. I also want to ensure that any income generated by the school, including the renting out of premises when under the control of a multi-academy trust, must be used exclusively for the benefit of that school’s pupils, with expenditures required to be agreed by that school’s local governing body. I accept the modification being moved by my noble friend in her amendment. At heart, this is about the individual school, the ownership of that school, the integrity of that school and ensuring that the resources coming to it will be a fair allocation and that its reserves and income-generating activities are protected. I beg to move.
Amendment 79ZA (to Amendment 79)