Former Barnsley lecturer pocketed pound;184,000 but the case against the former principal was dropped on health grounds

LECTURER TURNED businessman Stuart Spacey was jailed for 18 months this week for his part in a fraud that cost Barnsley College hundreds of thousands of pounds.

But David Eade, the former principal of the college and allegedly chief perpetrator of the corrupt business venture, escaped prosecution because of ill health.

The judge sentencing Spacey at Sheffield crown court said that while he was a secondary figure in the fraud, he had been left to “face the music alone”. The case against Eade was discontinued at an earlier hearing.

Between pound;500,000 and pound;940,000 was siphoned from government funds through a labyrinth of companies, some of which were fictitious, the court heard. Eade and Spacey even invented individuals over a period between 1995 and 2002.

Spacey made around pound;184,000 for himself and admitted being criminally involved in appropriating a total of pound;328,000.

The scam was made possible under franchising agreements, which allowed colleges to farm out courses to industry or create their own companies following liberation from local authority control and the creation of a corporate FE sector in 1993.

Spacey had been an engineering lecturer at Barnsley College until 1992, when he became the company secretary of Barnsley College Holdings, a registered charity and subsidiary of Progress Training.

Progress Training, which went into liquidation in 2001, specialised in providing training courses. This firm, which employed Spacey first as company secretary then as a consultant, was owned by Eade, who was therefore in a powerful position as both the issuer of contracts and the contractor.

A serious fraud office inquiry had been launched in 2001 following allegations that Spacey was “conspiring with another to defraud Progress Training”.

Sentencing Spacey, Judge Patrick Robertshaw said: “The breach of trust involved in this fraud is serious, flagrant, calculated and protracted.

“Never were you the principle player or main beneficiary,” he said.

However, “because of the serious ill health of your former co-accused and the discontinuance of the proceedings against him, you are now in the dock alone shouldering the inevitable penal consequences of this fraud.”

The case represents one of the worst in a series of high-profile scams around franchising and the ill-fated Individual Learning Accounts over the decade from 1993. Halton College registered Tesco shelf-stackers, Bilston had partnerships with operatic societies and brass bands. South Devon ventured into scuba diving. All made perfect sense, until inspectors blew the whistle.

A series of revelations and investigations by the Further Education Funding Council (forerunner of the Learning and Skills Council) did considerable damage to the FE sector as a whole.

The court heard how Eade had led a highly successful drive to revitalise the college, which included using subcontracted services. Eade turned a weak college around to make it one of the top three in England.

Judge Robertshaw told Spacey his and Eade’s otherwise notable achievements were corrupted by the temptations. “The culture of ethos of enterprise pervading further and higher education in the 1990s called for special skills and aptitudes. You and David Eade proved equal to the challenge.

Much of what you achieved does you and he credit but that same culture also called for the highest standards of probity and integrity.”

Judge Robertshaw told Spacey his jail term would have been much longer but for the extensive personal mitigation entered on his behalf. This included an unblemished career until the scam began, first as an engineer in the mining industry and then as a teacher at the college he later defrauded.