Councils should monitor academy budgets, LGA says

The Local Government Association (LGA) has called for powers to allow local authorities to oversee academy budgets, following previous financial scandals.

The LGA claimed that cash earmarked for education in England too often ‘disappears into the back pockets of those in charge’. It argued that the Education Funding Agency was not providing enough scrutiny to ensure value for money, leaving the media and whistleblowers to uncover cases of fraud.

The LGA has urged Education Secretary Justine Greening to restore local oversight of all school finances ‘providing democratic accountability so that parents and communities can be confident their children aren't missing out’.

The LGA cited two cases of financial abuses, including: Kings Science Academy in Bradford where two members were convicted of fraud for transferring £150,000 of government grants into their own bank accounts; and Perry Beeches Academy in Birmingham where the chief executive was paid a second salary through two separate companies.

Richard Watts, chairman of the LGA's children and young people board, said: "We are told that academies and free schools are subject to more financial scrutiny than council-maintained schools, yet we keep hearing that millions of pounds of taxpayers' money, which has been earmarked to make sure our children get a good education, is disappearing into the back pockets of those in charge.

"The National Audit Office has raised serious concerns about the ability of the DfE to effectively monitor academy trusts' spending, even before the planned expansion of the academy programme, and we don't believe it can possibly have effective oversight of spending in more than 20,000 schools.

Watts concluded: “Centralising control of schools isn't working, oversight needs to be devolved down to local councils.”

Meanwhile, a spokesperson for the Department of Education, commented: “Unlike other schools, their accounts are scrutinised by an independent auditor and we have considerably more financial information about academies than we ever had for council-run schools.

"The academy programme puts control of running schools in the hands of teachers and school leaders, the people who know best how to run their schools.

"They also allow us to tackle underperformance far more swiftly than in a council-run system where many schools have been allowed to fail for years."