The £850,000 payout to the former head of one of England’s most controversial academies has been branded “a shocking reward failure” by parliament’s spending watchdog.
A report by the Commons Public Accounts Committee (PAC), published today, says the DfE lacks an effective regime to sanction academy trustees and leaders who are responsible for serious failings.
The MPs had heard evidence about the £850,000 payment for Sir Greg Martin, the former executive head of Durand Academy in south London.
Last year, the DfE terminated the academy’s funding agreement, and it was re-named and transferred to a new sponsor.
Today’s report says: “Despite a catastrophic failure of governance, the previous executive headteacher at Durand Academy Trust is apparently entitled to a lump sum payment which, even after a statutory inquiry by the Charity Commission, totals £850,000.
“This is a shocking reward for failure.”
The committee heard that the payout “arose from a related party transaction whereby a company owned by the former headteacher was contracted to manage the accommodation and leisure facilities on the school site”.
The committee warns that the DfE has “few sanctions at its disposal to penalise those involved in malpractice”.
It says the department can ban individuals from teaching and stop people being schools governors.
However, it adds: “The ESFA [Education and Skills Funding Agency] admits that there is nothing to stop people involved in malpractice from acting as trustees or governors elsewhere, for example at a further education college, or from setting up businesses that could trade with the education and training providers that it oversees and regulates.”
However, the committee notes that the ESFA and the Charity Commission are investigating whether people involved in malpractice could be disqualified from coming company directors.
PAC chair Meg Hillier said: “When things go wrong in schools, pupils can be badly affected. We have seen the troubling consequences of poor governance and oversight of academy trusts.
“Government must raise its game to ensure the failures of the past are not repeated.”
The report calls on the DfE to “explain how it plans to strengthen the sanctions regime to deter, punish and prevent malpractice”.
It adds that the department should work with the Charity Commission, Companies House and the Insolvency Service on this.
The PAC’s recommendation was backed by Kevin Courtney, joint general secretary of the NEU teaching union, who said that “there should be sanctions with teeth to deter, punish and prevent malpractice among academy trustees”.
A DfE spokesperson: “Academies are subject to higher levels of accountability and transparency than local authority schools. Academies must publish their annual accounts and this year we added new requirements on related party transactions.
"We have also taken steps to increase accountability by publishing lists of trusts who do not return accounts on time; and by challenging trusts who pay high executive salaries.”