How cutting up credit cards saved a scandal-hit chain

29th July 2016 at 00:00
E-Act takes on a new school three years after damaging revelations of a ‘culture of extravagance’

A scandal three years ago left the multi-academy trust E-Act symbolising all that was wrong with the academies movement.

The academy chain became synonymous with images of champagne, first-class travel and general extravagance – all paid for by the public purse.

Even more worryingly, a damning Ofsted report in January 2014 put five of its academies in special measures and led to the chain handing back control of 10 of its 34 academies. And further criticism came in a letter from Ofsted earlier this year.

Now though, the academy chain says that it has turned a corner and, for the first time in three years, it is about to take over the running of a new school, Hareclive Academy in Bristol.

“E-Act today is unrecognisable from what it was three years ago,” David Moran, the chain’s chief executive (pictured, inset), proudly tells TES.

And, he says, the first step on its path to redemption came when he held a “session” to cut up all of the trust’s credit cards.

“I left one credit card with my finance director,” Moran remembers. “People had become used to the culture…the point is, we didn’t have control. The way money was spent was wrong.”

That “culture” was exposed by the Education Funding Agency in its damning 2013 report of E-Act’s operations, which revealed “a use of corporate credit cards [that] indicate a culture involving prestige venues, large drinks bills, business lunches and first-class travel all funded by public money”.

Under the stewardship of Sir Bruce Liddington – who, as E-Act’s then director-general, received almost £300,000 in wages and pension contributions in a single year – the chain’s senior managers were criticised for their “extravagant” expense claims.

Moran spoke this week as the Channel 4 documentary series Dispatches highlighted excesses in other MATs’ spending.

The chief executive, who joined just as E-Act was unravelling, said that the chain had “systemic problems” and “lacked any kind of strategy”. “It was run on the premise of, ‘We want to be big, we want to be the biggest and will attract schools on the premise of complete autonomy,’ ” he says.

The major sell used to attract schools was to tell them that the trust and its board would “not interfere” with the school. The problem with that approach, Moran says, was that the schools attracted to E-Act tended to be “some of the most challenging schools out there. So they got worse”.

Sam Beecham, operations director at the trust, says it was clear from the day she arrived in 2013 that the trust was not running effectively. “The fundamentals just weren’t there in terms of systems and processes. I came from the charity sector, where if you are given one ‘high-risk’ audit you are on alert. E-Act had 19.”

Like the ‘Wild West’

This week, ministers said that they were exploring “health checks” for MATs. But E-Act’s rise and fall highlights the Wild West-style approach during the early days of the rapid expansion of the academies programme that was ignited by the coalition government.

Moran says that the Department for Education was still turning to E-Act to take on more schools, even after its failings had become obvious. “We are talking about a previous administration that didn’t have a focus on inputs and outcomes, but merely had a focus on converting a certain amount of schools,” he adds.

It became clear that a strategy of growth, combined with a laissez-faire approach to the management of schools in difficulties, was a recipe for disaster.

A third of the schools were in special measures and the trust was consistently at the bottom end of performance tables.

That was when the long road to recovery started. A month after the news of E-Act’s excesses became public, Liddington was gone. Soon after, the swanky office space in London’s expensive Fitzrovia was gone too.

Moran moved E-Act’s headquarters to a shared office space in the far more prosaic backstreets of London Bridge, dramatically reducing property costs.

He and his board then focused on what it really means to be a MAT; something, he says, that is still not fully understood by trusts across the country. And that led to some unexpected resistance from his own headteachers.

“We said, ‘Let’s be clear about what we are. We don’t sell services to schools. We’re one organisation.’ And for a lot of our principals and governing bodies, they felt I was changing the rules of the game.”

The road to redemption

The schools that had been sold the dream of autonomy felt it was being taken away, Moran explains. “Suddenly I came along and said, ‘We now have a school improvement strategy, we’re a school improvement organisation. We don’t sell services to you – we are you and you are us.’ A lot of principals didn’t like that.”

Many of the schools forced their trust chief executive to make appointments if he wanted to visit them. According to Moran, some principals even began to use their governing bodies to block efforts to implement the trust’s school improvement plans.

Despite opposition, Moran and his team continued to ring the changes. He sacked “pretty much all of the education team”, which he says was made up almost entirely of consultants.

“Bruce employed external consultants to do the principals’ performance management. One of the first things I did was to get rid of them all and do it myself,” he says.

Another major change, and perhaps the most controversial, was that the trust removed local governing bodies. Such action was taken when a local governing body made a decision for the school that didn’t fit with the strategic direction of the trust.

“I just don’t buy it that you lose local accountability if you remove the governing body. I don’t believe the governing body is representative of the local area just because you have two parents on there,” Moran says.

While the changes were met with some opposition, they have nevertheless produced significant results. Approval for E-Act to take over its first school in three years is a culmination of those changes.

Moran points to recent data published by the Sutton Trust and the DfE, showing that the chain is now hitting the national average on the key measures for improvement and is in the top 15 per cent of all primary schools for both progress and attainment. “Up until now, it was: ‘E-Act? Oh, they’re the champagne glasses’,” says Moran. “I will not celebrate being average and we have to keep on improving. And I will be absolutely held to account by the impact E-Act has on schools.”


E-Act’s past excesses

A total of £393,000 was spent on “procedural irregularities” including consultancy fees, breaking E-Act’s own financial rules, the Education Funding Agency reported in 2013.

Expenses suggested that there was a culture of “prestige” venues, large drinks bills, business lunches and first-class travel, all funded with taxpayers’ money.

“Extravagant” use was made of public funds for an annual strategy conference, at a cost of almost £16,000.

Monthly lunches took place at the Reform Club, a private members’ club in London.

In addition, the trust had a total of 17 payroll providers for 34 academies.

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