The boss of a secretive property company set up by the Department for Education to secure free-school sites received a five-figure bonus last year, even though the organisation missed one of its key targets.
The Department for Education declined to tell Tes why Lara Newman, the chief executive of LocatED, received the bonus – a decision which the chair of the House of Commons Public Accounts Committee has branded “unacceptable”.
LocatED calls itself “Britain’s biggest property start-up”, and was set up to operate at arm’s length from the DfE with a remit to find and buy hundreds of free-school sites.
Its accounts up to 31 March 2018 – published last month – reveal that Ms Newman received a salary of £185,000-£190,000 in 2017-18, plus bonus payments of £20,000-£35,000 and £11,000 in pension benefits, giving her a total remuneration of £225,000-£230,000.
Her base salary is higher than the prime minister, the Department for Education's top official, Jonathan Slater, and Amanda Spielman, the chief inspector of Ofsted.
Mystery over property boss' bonus
As Tes revealed in an investigation back in September 2017, “pay flexibility” – which allows an external body to pay staff more than standard civil service pay – was a key reason why LocatED was set up outside Whitehall.
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The accounts say that during 2017-18 LocatED bought 55 sites for free schools, providing 21,763 new school places, and that it “performed very well in relation to previous site acquisition costs”.
However, the accounts admit that LocatED “did not achieve the extremely ambitious historic cost-per-pupil target” – a measure which also includes construction costs.
LocatED directs all press enquiries about its work to the DfE. But when Tes asked the department why Ms Newman received her bonus, it did not provide an answer.
The department said LocatED had a performance-related pay scheme and that a bonus is paid if its terms are met.
Meg Hillier, the Labour MP who chairs the Public Accounts Committee, criticised the lack of transparency.
“The bit that does worry me is the bonus, not telling you why that bonus was paid,” she told Tes.
“We should be told what the bonus is for – it’s public, taxpayers’ money. That’s unacceptable that that information is not out there.”
Ms Hillier said her committee would be keeping a “close eye” on LocatED.
“It’s another quango that’s been set up, and we’ve got to be clear that we’re keeping them on their toes if they’re going to save money,” she added.
Her words were echoed by Emma Hardy, a Labour MP who sits on the Commons Education Committee. “If anyone’s receiving public money, then there should be transparency about who's receiving it and how much and why,” she said.
A DfE spokesman said: “Ensuring value for money is central to LocatED’s mission. Part of this is attracting and retaining qualified staff with specialist experience. The chief executive leads the specialist team to undertake a large volume of transactions in order to secure and develop new schools.
“In 2017-18 LocatED exceeded its target in acquiring commercial sites below market value, and will continue to work to build on these results in the future.”
While the DfE initially declined to say how much LocatED had saved – saying the information was “commercially sensitive” – it later told Tes that in 2017-18 the body had spent an estimated £23.7 million less, across all site purchases, when compared with historic average site acquisition costs.
Its accounts also say that in 2017-18 LocatED took over a portfolio of 90 properties held by the Education and Skills Funding Agency but not yet in use, making £2.9 million of efficiencies its first year.
However, the accounts reveal that auditors found room for improvement in its management.
Four audits were carried out looking into its “governance and risk”, “core financials”, “performance management and culture”, and “procurement and site acquisitions”.
The accounts state: “In each case, the opinion given was moderate, which indicates that some improvements are required to enhance the adequacy and effectiveness of the framework of governance, risk management and control.”