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Exclusive: Ban related party transactions, says ex schools tsar

Former DfE national schools commissioner Sir David Carter calls for complete ban on related party transactions, as he unveils new role training MAT leaders

Sir David Carter, national schools commissioner

Academy trusts should be banned from engaging in related party transactions where contracts are handed to people with close connections to the organisation, the DfE's former national schools commissioner has said.

Sir David Carter made the comments as he revealed his new role training academy leaders at the newly merged Ambition School Leadership and the Institute for Teaching.

In August, Sir David stood down after two and a half years as national schools commissioner, during which he was responsible for overseeing more than 7,000 academies.

During his tenure, the related party transactions conducted by some academies was a source of controversy. 

While the Department for Education is taking action to ensure academies obtain advance authorisation of related-party transactions above £20,000, Sir David said there should be a complete ban on such deals. 

“The related party transactions [issue] is fairly straightforward to me, you just say there shouldn’t be any," he told Tes. 

"You have to make a decision between are you providing a service for a trust and therefore receiving pay for it, or do you want to be a board member? You can’t be both.

“For me, that’s such an easy one to clear up. Whether you're providing a huge service with a huge contract, or you're providing coaching and mentoring for a couple of grand, you can’t do both.

"You’re either taking an income from the trust for you personally or for your business, or you’re a board member, but you can’t be both.”

Sir David spoke to Tes on the day he announced he would be joining the newly merged Ambition School Leadership and IfT this month as executive director of system leadership.

In this role, he will be responsible for heading up the organisation's governance and executive leaders programmes.

“I thought hard about where I could make the biggest difference," Sir David told Tes.

"What I wanted to do was have the opportunity to work differently with trusts but at the same time try to help them improve their performance... I thought this was probably the right time to think about doing that outside of government rather than inside it."

While most of his work will be with MAT leaders, Sir David said his new role would also involve working with diocesan schools and local authorities. 

He said his training would focus on a number of different areas, including how to articulate and implement a vision within an organisation, inspiring employees and leading change.

The development programmes will have a particular focus on governance, which he said was a "big challenge, and when it goes wrong it goes badly".

Sir David said that poor governance was a "common denominator" of recent failed academy trusts such as Wakefield City Academies Trust and Bright Tribe Trust - which also gained media attention for their related party transactions. 

“The common denominator of the projects and the trusts that went wrong was the governance," he said. "The governance wasn’t strong enough to anticipate failure and to hold people to account for it, and when they realised there was a problem to move fast to do something about it.”

Sir David said he would be undertaking his new role three or four days a week, balancing it with his appointments as a trustee at the youth homelessness charity, Centrepoint, and of the Teaching Awards.

He is due to host a breakfast event at the Global Teacher Development Forum on 22 October, where he will talk more about his plans and vision for his work with the newly merged organisation. 

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