We are concerned that the Department’s approach to monitoring the skills and experience of academy leaders, and the lack of remedial action for leaders of failing academies, risks further failures across the sector. The Education & Skills Funding Agency’s monitoring and intervention activities are designed to consider the effectiveness of governance arrangements within academy trusts. However, there is no requirement for trustees to hold financial qualifications, even where these individuals sit on a trust’s finance or audit committee. The number of instances where the independent auditor found some element of income or expenditure may have been incurred outside permitted use, or instances where the trust’s internal procedures have not been complied with, has risen to 9% of trusts in 2019/20, in part driven by the impact of the pandemic on the internal controls of academies and their spending. The Secretary of State has used its ?her powers under Section 128 of the Education and Skills Act 2008 against 10 individuals, suggesting quite a high threshold for debarring directors of academy trusts. There is a risk that the powers available to the Department do not go far enough to prevent leaders 8 Academies Sector Annual Report and Accounts 2019/20 of failing academy trusts from moving elsewhere within the education system. We remain concerned that the Department does not have a sufficiently joined up approach to dealing with misconduct, monitoring the potential re-deployment of leaders of failing academies within the education sector, or capturing insights from poor performance across the sector. Recommendation: The Department should write to the Committee within 6 months detailing how it will better identify and address cases of failed leadership within academies. This should include how it will ensure the necessary lessons are learned to avoid similar incidents from occurring in future elsewhere in the sector. Academies Sector Annual Report and Accounts 2019/20 9 1 D