A leading academy trust feted by politicians for its academic results was ordered to re-advertise key contracts because of potential conflicts of interest, an official report has revealed.
The National Audit Office document, published today, criticises Durand Academy Trust in south London for its “complex” structure that left it open to “perception of wrongdoing”.
The report showed that earlier this year, the Education Funding Agency (EFA) ordered the trust to re-tender contracts, including one between the trust and a PR company which is run by one of its directors.
They were also asked to look at another deal - between two companies linked to the trust for the management of leisure facilities – because the executive head of the academy, Sir Greg Martin, was also the director of one of the companies.
“No company related to Sir Greg Martin or his family members would be allowed to bid,” the NAO report said.
Durand, which this term launched its own boarding school in West Sussex, was also asked to strengthen its governance structure and bring in new governors “with experience of the boarding sector” the report said.
The EFA is currently taking action against 17 academy trusts because of irregular and/or improper dealings between them and companies with links to them.
Margaret Hodge MP (pictured), chair of the public accounts committee, said of the report: “It feels just wrong that individuals sitting on the board of the Durand Academy Trust could set up such a complex web of organisations and companies some of which are selling goods and services to the academy.
“It’s not at all clear if individuals within the trust were improperly benefiting from these companies.”
She added: “I am very concerned that the agency’s reliance on whistleblowers and ad hoc reports means that many more questionable business relationships could exist and have gone unchallenged, putting public money at risk.”
A spokesman for the Durand Academy Trust responded to the report claiming that its complex structure had been necessary to achieve what it had with young people.
“The EFA has been absolutely clear that the arrangements the NAO looked into have delivered ‘significant benefits for the pupils of Durand’ and were established in good faith," he said.
“Without these arrangements, we would not have been able to invest £8 million of our own funds over the last decade to develop new school sites to give many more children exceptional educational opportunities under the brilliant leadership of Sir Greg Martin.
“However, we agreed with the EFA to review our structures and governance six months ago, so that we remain in line with the very latest edition of the Academies Financial Handbook."