Forty-Seventh Report - Academies Sector Annual Report and Accounts 2019/20

Select Committee
Public Accounts Committee HC 994 25 March 2022
Report Status Government responded
Conclusions & Recommendations 33 items (9 recs)
Source View on Parliament website
Government Response (AI assessment · 33 of 33 classified)
Accepted 20
Acknowledged 1
Not Addressed 4
Rejected 8
Government response
Treasury minutes: Government response to the Committee of Public Accounts on the Forty Seventh report from Session 2021-22 · published 27 May 2022
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Recommendations & Conclusions

20 results
5 Recommendation Accepted
We are concerned that the Education & Skills Funding Agency’s decision to use public money...
Recommendation
We are concerned that the Education & Skills Funding Agency’s decision to use public money to prop up academy trusts in difficulty fails to address poor financial management within academy trusts. Academy trusts have been set up as charitable companies, … Read more
Government Response Summary
The government agrees with the recommendation to set out the criteria it uses to determine whether it is appropriate to provide additional funding to academy trusts to support financial recovery, or to write-off an academy’s debt and states that this framework is already in place.
HM Treasury
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6 Recommendation Accepted
We are concerned that the Department’s approach to monitoring the skills and experience of academy...
Recommendation
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 … Read more
Government Response Summary
The government will make regulations under section 19(7)(c) of the Skills and Post-16 Education Act 2022 to prevent trust leaders judged to be unfit from moving to elsewhere in the education system and will write to the Committee by September 2022 with a full response.
HM Treasury
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8 Conclusion Accepted
There has been variable take up of academisation across different regions.
Conclusion
There has been variable take up of academisation across different regions. For example, 29% of state-funded schools in Lancashire & West Yorkshire were academies in 2019/20, compared to 56% in South-West England.16 We asked the Department about its understanding of … Read more
Government Response Summary
The government agrees with the recommendation (quoted in its response) for a clear plan for full academisation. It confirms the Schools White Paper provides the basis for this, committing to set out further detailed plans after sector engagement, piloting new approaches for harder-to-place schools, and investing £86 million to build trust capacity in Education Investment Areas.
HM Treasury
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9 Conclusion Accepted
MATs are not restricted to a geographical region.
Conclusion
MATs are not restricted to a geographical region. For example, the largest MAT, the United Learning Trust, is responsible for 76 academy schools spread across England.19 The Department informed us that there was a weighting towards geography when making decisions … Read more
Government Response Summary
The government agrees with the implicit recommendation on multi-academy trust (MAT) strategy, outlining plans from the Schools White Paper to achieve a fully trust-led system by 2030. This includes new regulatory approaches, defining strong trusts, and investing £86 million to build trust capacity in Education Investment Areas.
HM Treasury
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10 Conclusion Accepted
We asked the Department about the rise in primary schools converting to academies and whether...
Conclusion
We asked the Department about the rise in primary schools converting to academies and whether existing secondary trusts have sufficient experience and skills to take on primary schools. The Department responded that it did not have a set view on … Read more
Government Response Summary
The government agrees with the implicit recommendation on MAT structure and growth, detailing plans from the Schools White Paper to achieve a fully trust-led system by 2030. This involves growing strong trusts, a new regulatory review, and investment to develop a strong trust landscape.
HM Treasury
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15 Conclusion Accepted
COVID-19 has had a variable impact on the financial health of academy trusts, although the...
Conclusion
COVID-19 has had a variable impact on the financial health of academy trusts, although the full data is not yet available. The 2019/20 SARA reports that the financial stability of the sector has improved due to the work being done … Read more
Government Response Summary
The government states it agrees with and has implemented the explicit PAC recommendation 5 to set out criteria for providing additional funding to academy trusts in difficulty. A transparent framework detailing eligibility criteria and conditions for financial support was published in November 2019, with annual data published alongside reports.
HM Treasury
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16 Conclusion Accepted
When we examined academy schools’ finances in March 2018, we were concerned that some academy...
Conclusion
When we examined academy schools’ finances in March 2018, we were concerned that some academy trusts appeared to be using public money to pay excessive salaries. We recommended that the Department should challenge all academy trusts that were paying 32 … Read more
Government Response Summary
The government agrees with the implicit recommendation to address concerns about excessive salaries. It commits to new regulations under the Skills and Post-16 Education Act 2022 to prevent unsuitable trust leaders from moving, will launch a regulatory review in May 2022, and will provide a full response by September 2022.
HM Treasury
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17 Conclusion Accepted
The number of academy trusts paying at least one individual above £150,000 increased to 473...
Conclusion
The number of academy trusts paying at least one individual above £150,000 increased to 473 trusts (17% of trusts) in 2019/20, from 340 trusts (12%) in 2018/19. Almost two- thirds of trusts (1,772; 64%) in 2019/20 reported paying at least … Read more
Government Response Summary
The government agrees with the implicit recommendation to address increasing levels of higher pay. It commits to new regulations under the Skills and Post-16 Education Act 2022 to prevent unsuitable trust leaders from moving, will launch a regulatory review in May 2022, and will provide a full response by September 2022.
HM Treasury
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20 Conclusion Accepted
The Department launched the Asbestos Management Assurance Process (AMAP) in March 2018 to better understand...
Conclusion
The Department launched the Asbestos Management Assurance Process (AMAP) in March 2018 to better understand how well asbestos is managed across all schools.51 When we examined academy schools’ finances in March 2018, we were concerned that the Department did not … Read more
Government Response Summary
The government agrees with the explicit PAC recommendation 4 to urgently chase the remaining non-responders to the asbestos management survey. It has shared details with regional teams and the HSE, and will provide a progress update to the Committee by September 2022, with comprehensive data available from the CDC2 program.
HM Treasury
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21 Conclusion Accepted
The Department told us that when it first ran the process, 88% of schools responded.
Conclusion
The Department told us that when it first ran the process, 88% of schools responded. It explained that 93% of schools had now responded to the survey, and that it was pursuing the remaining schools and had built asbestos assurance … Read more
Government Response Summary
The government agrees with the recommendation (quoted in its response) to address asbestos concerns, stating it has shared details of non-responding schools with regional teams and the HSE. It is gathering updated asbestos compliance data through the Condition Data Collection 2 programme and commits to providing a progress update to the Committee by September 2022.
HM Treasury
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23 Conclusion Accepted
The Department told us that many trusts actively explain their use of budgets to parents.
Conclusion
The Department told us that many trusts actively explain their use of budgets to parents. We asked the Department whether the current arrangements should be more transparent, so that parents can see what academies are spending per-pupil. The Department told … Read more
Government Response Summary
The government states that the primary responsibility for financial management rests with the academy trust and accountability is rigorous via audited accounts.
HM Treasury
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25 Conclusion Accepted
The Department explained that the resolution of the qualified opinion on the WGA continues to...
Conclusion
The Department explained that the resolution of the qualified opinion on the WGA continues to be discussed between the Department and HM Treasury, albeit has been deprioritised while government focuses on its response to the COVID-19 pandemic. The Department told … Read more
Government Response Summary
The government states it has already addressed the historic qualified opinion on the Whole of Government Accounts regarding land and building valuations. It has introduced its own programme of revaluations using qualified surveyors to ensure accuracy.
HM Treasury
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26 Conclusion Accepted
ESFA’s responsibilities include funding education and training for children, young people and adults; providing assurance...
Conclusion
ESFA’s responsibilities include funding education and training for children, young people and adults; providing assurance that public funds are properly spent, achieve value for money for the taxpayer, and deliver the policies and priorities set by the Secretary of State; … Read more
Government Response Summary
The government states that the primary responsibility for financial management rests with the academy trust and accountability is rigorous via audited accounts.
HM Treasury
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27 Conclusion Accepted
An academy trust reporting a cumulative deficit must agree a recovery plan with ESFA to...
Conclusion
An academy trust reporting a cumulative deficit must agree a recovery plan with ESFA to put the trust back on a financially sustainable path. Where an academy trust is reporting a cumulative deficit, it may require financial support, as part … Read more
Government Response Summary
The government states that academy trusts are responsible for managing finances, and the ESFA provides support and challenge; additional funding is a last resort and is expected to be repaid with frameworks for financial support already in place.
HM Treasury
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28 Conclusion Accepted
The ESFA may also provide loans to academy trusts for new academies that had converted...
Conclusion
The ESFA may also provide loans to academy trusts for new academies that had converted from maintained schools to settle any local authority deficit, which should be repaid over an agreed period of time. These loans may be impaired and … Read more
Government Response Summary
The government states that academy trusts are responsible for managing finances, and the ESFA provides support and challenge; additional funding is a last resort and is expected to be repaid with frameworks for financial support already in place.
HM Treasury
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29 Conclusion Accepted
Each academy trust as a charitable company is required to produce annually its own audited...
Conclusion
Each academy trust as a charitable company is required to produce annually its own audited accounts.77 External auditors are appointed by the local academy trust in accordance with the Academy Trust Handbook. Auditors are required to provide an opinion on … Read more
Government Response Summary
The government states that the primary responsibility for financial management rests with the academy trust and accountability is rigorous via audited accounts.
HM Treasury
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30 Conclusion Accepted
In 2019/20, 9% of trusts received a modified regularity opinion i.e.
Conclusion
In 2019/20, 9% of trusts received a modified regularity opinion i.e. a regularity exception was identified, compared with 7% in 2018/19. A regularity exception means that the auditor found some element of income or expenditure that may have been outside … Read more
Government Response Summary
The government states that the primary responsibility for financial management rests with the academy trust and accountability is rigorous via audited accounts.
HM Treasury
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31 Recommendation Accepted
The Academy Trust Handbook requires relevant trust staff to hold appropriate financial qualifications and experience.81...
Recommendation
The Academy Trust Handbook requires relevant trust staff to hold appropriate financial qualifications and experience.81 However, this requirement does not extend to trustees, including for trustees sitting on audit or finance committees. We therefore asked how the Department and ESFA … Read more
Government Response Summary
The government will make regulations under section 19(7)(c) of the Skills and Post-16 Education Act 2022 to prevent trust leaders judged to be unfit from moving to elsewhere in the education system and will write to the Committee by September 2022 with a full response.
HM Treasury
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32 Recommendation Accepted
The Department told us that it collected information about academy trust governance arrangements.
Recommendation
The Department told us that it collected information about academy trust governance arrangements. However, the Department told us that it is more likely to use the information collected from ESFA’s monitoring and assessments over financial performance and other data collected … Read more
Government Response Summary
The government will make regulations under section 19(7)(c) of the Skills and Post-16 Education Act 2022 to prevent trust leaders judged to be unfit from moving to elsewhere in the education system and will write to the Committee by September 2022 with a full response.
HM Treasury
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33 Recommendation Accepted
We have previously reported on the limited sanctions at the Department’s disposal to sanction trust...
Recommendation
We have previously reported on the limited sanctions at the Department’s disposal to sanction trust leaders who may be responsible for malpractice, including misuse of funds, across the sector. In our 2019 report on academy accounts and performance, we were … Read more
Government Response Summary
The government will make regulations under section 19(7)(c) of the Skills and Post-16 Education Act 2022 to prevent trust leaders judged to be unfit from moving to elsewhere in the education system and will write to the Committee by September 2022 with a full response.
HM Treasury
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