DfE pays £124k for failed free school’s pension shortfall

Contributions weren't made for 13 teachers from Collective Spirit free school in Oldham

Contributions weren't made for 13 teachers from Collective Spirit free school in Oldham

22 Nov 2021, 5:00

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The government had to stump up £124,000 to cover missed pension payments for a failed free school beset with financial woes.

Contributions to the Teachers’ Pension Scheme (TPS) were not made for 13 teachers from Collective Spirit Free School in Oldham after the trust allegedly failed to enrol them on the programme.

Collective Spirit closed in the summer of 2017 after it was placed in special measures. It got more than £250,000 from the Education and Skills Funding Agency (ESFA) to facilitate the closure.

Jim McMahon, the Labour MP for Oldham West and Royton, raised the pension issues with government.

The problem came to light when the school contacted the TPS to identify “pension arrears”, despite an ESFA investigation into Collective Spirit and its sister school, Manchester Creative Studio School.

Responding to McMahon, Baroness Barran, the academies minister, admitted that the arrears resulted from the “failure of the employer to identify teaching staff who, by default, should have been members of the TPS”.

In January last year, the school asked the agency to pay unpaid pension contributions to 13 teachers totalling £123,574.06 – including almost £14,000 in interest – as it had “insufficient remaining funds”. The trust that ran it was in the process of shutting.

Missing pension contributions ‘made good’

Barran confirmed that the “missing contributions has been made good” and paid by ESFA, which also stumped up £41,250 to settle arrears for three staff members left out of the Local Government Pension Scheme.

Employers have a “statutory obligation” to enrol eligible employees in the scheme. However, the TPS “would not be aware” if they failed to do so, the minister said.

It is “believed this is an isolated case”, relating to “the failure of the trust to meet its employer responsibilities, rather than a failure in the system”.

McMahon also asked why the issue was not raised during the government’s investigation into the sister schools – which were run as separate organisations, but governed by an overarching board of directors.

Manchester Creative Studio School closed in 2018.

In May 2019, an ESFA investigation found that the former chair of both schools, Alun Morgan, had broken the law over payments of more than £500,000 to his own company, the Collective Spirit Community Trust.

The investigation also cast “significant doubts” on the legitimacy of money paid to a company connected to Raja Miah, the former head of both schools.

Barran explained the scope of the investigation was “specifically” on concerns surrounding Collective Spirit Community Trust, so would not have included the pension arrears.

She added that “other work was already ongoing within the trust . . . to resolve outstanding matters, particularly in relations to financial management.”

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