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Education Committee Report Puts Spotlight On Academy Conflicts Of Interest

Paper Identifies Potential Areas Of Concern


New research published by the Education Committee has raised concerns of conflicts of interest which have arisen as a result of the relationship between academy schools and their sponsors.

Commissioned from the Institute of Education at the University of London, the study has identified four broad areas where potential conflicts may emerge under the current arrangements in place.

These include connected party transactions where an individual on a Trust’s board may benefit personally or via the companies, where the sponsor supplies a service to a Trust under a license which then prevents the latter from then changing supplier.

Others include conflicts which do not involve money, as well as those in the wider system such as where a Department for Education Academy Broker also works for a Trust which is invited to pitch for a new school.

Graham Stuart, chair of the Education Committee, said: “Academy sponsors can bring much needed skills to schools and help raise standards. This important research has identified, however, a number of loopholes in the current arrangements that could work against the best interests of academies and their students.”

He added that questions on the matter will be put to the Secretary of State when she gives evidence to an inquiry next month.

Expert Opinion
When a school becomes an academy its legal structure changes and the legal burden on its governors increases. At the same time, they become independent so do not enjoy the level support from their local authority which they had as a maintained school such as a comprehensive.

"Another challenge they face is finding competent and suitable trustees. In some areas, this is simple as there is a large population of people who are used to serving in management or trustee positions. However, in many places there are fewer people with the relevant experience, so academies may have boards who find it harder to manage issues like conflicts of interest.

"Nevertheless it should be remembered that the law is clear that, although there are some exceptions, charity trustees should not profit financially from their position. Academy trustees are charity trustees so they are bound by the law in this area.

"Ultimately, governance in general is something which academy boards should take seriously to avoid any potential failures or embarrassment. Most importantly of course, good governance is a key driver of success in the long term."
Laurence Gavin, Partner

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