9 key findings from the DfE’s accounts: Bonuses, £200k pay-offs, and rising PFI debts

The Department for Education has published its annual accounts for 2016-17. Schools Week has the key findings:


1. Former edu sec Nicky Morgan got a £17k pay off

Nicky Morgan

Accounts show the former education secretary Nicky Morgan got a severance pay off totalling £16,877 last year.

This amounts to a quarter of the £67,505 salary she earned in the 16-17 year.

This is normal for departing ministers – who are entitled to three months of their ministerial pay when they leave office.

As reported by Schools Week, David Laws was given £7,920 after losing his seat in the 2015 general election.


2. Gove ally one of only directors to get a bonus – again

The accounts show Tom Shinner was one of the only directors to get a bonus again this year – receiving between £10,000 and £15,000. The only other director to get a bonus this year Juliet Chua, listed as acting director general for education standards (who got between £5,000 and £10,000).

Schools Week reported last year that Shinner was the only DfE director named in accounts to get a bonus in 2014-15, and also got a bonus last year.

Shinner, the strategy director, was appointed to one of the department’s most senior roles at the age of 28 while Michael Gove was education secretary in 2014. He’s since left the DfE to join the Department for Exiting the European Union.


3. Nine DfE staff got pay offs of over £200,000 EACH

The accounts stated the total cost of exit packages dropped from £18.4 million in 2015-16, to £12.9 million in 2016-17 (this could be down to academy staff not being included in the accounts this year, they will be part of a separate sector report to be published later this year).

But the figures show the DfE paid over £200,000 in exit packages to nine staff, and over £100,000 for another eight.

The rise in mega pay-offs was said to be because of a restructure of one of the group’s non-departmental public bodies, the Construction Industry Training Board.

Accounts stated the values of redundancy were high because of employees’ long terms of service and their pension entitlements.


4. The DfE has indemnities totalling millions of pounds on academy sites

The accounts state that the DfE has provided an indemnity of up to £2 million to protect the Inspiration Trust against potential closure of the Great Yarmouth High School in the event “the foundation withdrew consent for the academy to operate from the current site”.

Another indemnity of £5 million has been provided to the Church Commissioners of England in relation to the lease of an academy site.

A 35-year lease arrangement with the Tottenham Hotspur Property Company for an academy site also has an indemnity, listed as £12.5 million

The accounts stated the indemnities were provided by the secretary of state to “assist the conversion from the maintained sector to the academy sector”.

An auditor told Schools Week this pretty much means the DfE has promised to pick up the tab instead of trustees should any problems arise. But they pointed out not all trusts get such deals…


5. Cash losses are way down on last year

READ: Accounts reveal shocking financial mismanagement at defunct academy trust

The amount of money written off by the DfE is down to £5.8 million, from nearly £13 million on the previous year (however, again, this may be down to the losses of academy trusts no longer being accounted for in this document).

But one of the losses was over £500,000 the government is owed by the defunct Lilac Sky Schools Academy Trust (full story on that here).


6. DfE move to Old Admiralty Building back on, for 2018

Schools Week had reported the department’s move from Sanctuary Buildings to the new offices, which would save £19 million a year, had been “indefinitely postponed”.

But the annual accounts state the move to the Old Admiralty Building (which overlooks Buckingham Palace) is back on, with staff due to relocate in 2018.

The accounts state a total of £66 million has been set aside to reconfigure the new workplace – which has been empty since the departure of the Foreign and Commonwealth Office last year.

Work was supposed to start in November 2015, but contractors said in February they had not started yet.


7. PFI debts soar by £300 million

READ MORE:  The true scale of school PFI debts

The accounts show the total future minimum payments under the off-balance sheet private finance initiative contracts is now an eye-watering £1.8 billion.

That’s up from £1.5 billion in 2016.

Schools Week has reported extensively on the issues the contracts are causing in the sector – including causing sponsors to turn away from taking over challenging schools, and leaving councils with bills for empty buildings where schools close.

8. DfE’s governance on capital finance, grants and cyber security have “significant weaknesses”

A governance audit of the department found it had an overall moderate rating – meaning some improvements are required to enhance the effectiveness of the framework of governance, risk management and control.

However 14 out of 70 areas were rated as “limited”, with another “unsatisfactory”.

The one unsatisfactory area, which means there are fundamental governance weaknesses that it is inadequate and likely to fail, was for IT governance.

Limited areas, where there are “significant weaknesses”, included EFA capital financial management, Priority Schools Building Programme governance, grant and contract management, and cyber security, academies and free schools recurrent funding.

The DfE said it has accepted the findings and actions are either in progress or completed.


9. And now some good news … the DfE has a healthy workforce

The average number of working days lost through sickness across the DfE and its agencies was 4 per full-time employee. That marks a 0.7-day decrease from the previous year’s figures.

It’s also way down on the civil service average – which is at 7.2 days lost per full-time employee.

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