Two academy trusts founded by multi-millionaire businessman Michael Dwan may have to repay £1.8 million in government funding they received for building work that was allegedly not carried out.
Newly-published accounts for Bright Tribe and its sister-trust Adventure Learning Academies Trust, seen by Schools Week and due to be published shortly on Companies House, reveal the government is looking to take action for “potential improper use of historic grants”. They also reveal a series of other allegations, including:
- A “lack of clarity” over how Bright Tribe spent its £1 million northern hub funding, which the government may now claw back
- A “blurring of lines” in the use of funding by the trusts and two linked private firms, with a lack of evidence payments to a Dwan firm were “at cost”
- “Insufficient evidence” to support the rationale between staff severance pay offs
- Serious concerns over “unsafe” school buildings
Government-appointed trustees now running the two chains have put aside £1.5 million at Bright Tribe at £330,000 at ALAT following “a number of external investigations into capital spend in previous years”.
An investigation by Panorama in September alleged Bright Tribe had received hundreds of thousands of pounds in grants to carry out improvement works at its school that were never completed.
Both sets of its accounts say there is “insufficient evidence in the completed evidence for some of the capital grants and salix loans”.
The accounts state that following investigations “works that had been capitalised in previous accounting periods had not been carried out, despite invoices and certificates confirming that works had been completed being provided to the trust”.
A series of financial issues have also been raised with the ESFA relating to material irregularity, impropriety or funding non-compliance.
In 2015, Bright Tribe was given £1 million northern powerhouse funding to set up an academy hub in Northumberland. The hub was never set up.
But the new accounts state there was a “lack of clarity as to where the northern hub funding was allocated and spent and any positive impact from that funding”.
The accounts also raise a “blurring of the lines” in the use of funding between both trusts and two private companies. Only one is named, Bright Tribe Facilities Management, which was a wholly owned subsidiary of the trust.
The accounts also reported a “lack of rigour” in declaring conflicts of interests or related parties.
Accountants, under their assurance report in the accounts, stated there was also “insufficient evidence” to support that money paid to North Consulting Limited was “at cost”. The firm includes Dwan and his brother Andrew among its directors. Last year, Bright Tribe spent £127,000 with the company, and £339,000 the year before.
Accountants also found “insufficient evidence” to support the rationale behind settlement agreements to departing staff, as well as a lack of evidence confirming that value for money was obtained for the pay offs.
Last year Bright Tribe paid out £299,000 in staff severance payments, and ALAT paid £30,000.
The Whitehaven Academy was described in the accounts as being in an “inadequate, and unsafe, condition”. Local MP Trudy Harrison was physically escorted out of the school under the previous leadership when she attempted to check on flood damage in November 2017, and the school was forced to temporarily close after an asbestos disturbance in April last year.
Schools Week reported in November that Dwan’s brother Andrew made an agreement with ALAT in 2016 to run a nursery on the site of one of the schools, rent free until 2027, at which point rent will be £5,000 a year. The accounts show this arrangement is still in place.
The accounts also state there was “insufficient evidence” an accounting officer had been in place at either trust during 2017-18.
Both trusts have had all of their schools rebrokered, and will be closed down in the next 12 months.
A spokesperson for Dwan’s office said: “We have not been party to the preparation of these accounts. In terms of Mr Dwan’s previous support for the Trusts a full copy of all documentation relating to all work carried out for both trusts are held by Mr Dwan’s office for the period of his involvement as well as the reference points for his £1.4m cash donation.
“This information has previously been provided to the EFSA in 2015/2016. If the trusts have any gaps in their record keeping Mr Dwan’s office would be happy to supply information to them for the relevant period. He has not been contacted to date.”
Correction: This article was amended at 18.50pm on June 28 to correct that Bright Tribe Facilities Management was a subsidiary company of Bright Tribe.
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