DfE WILL publish details of bail-outs to struggling trusts

The government has promised to publish for the first time a full account of the bail-outs it hands to struggling academy trusts.

However, the department refused to provide details of the pay-outs it dished out over the past few years – stating it “does not hold the information in the format requested”.

When dealing with taxpayers’ money the department has an obligation to account for its spending and to be open and transparent

Schools Week had asked under the Freedom of Information Act for a spreadsheet with the costs broken down by the various strands of grant funding.

New guidance, published last month, showed there were five avenues of financial support available to cash-strapped trusts.

Kevin Courtney, joint general secretary of the NEU, said the government’s failure to provide historic figures was “neither credible nor acceptable” and “deeply worrying”.

“When dealing with taxpayers’ money the department has an obligation to account for its spending and to be open and transparent, so that the public can be assured that education spending is being administered wisely.”

The Department for Education, in its response to Schools Week, said as the guidance was new it would “require us to categorise all the historical funding, in scope, in line with the new guidance”.

The department said, under FoI laws, public authorities are not required to create new information.

But they did reveal the information regarding financial support to trusts in difficulty will be published in the sector annual report and accounts. They aim to publish the document in June 2020.

Courtney said the need for openness was “particularly important at a time when schools across England are strapped for cash due to the current government’s austerity policies”.

“Funding must not only be fair, it must be seen to be fair.”

Academies are responsible for managing their own finances but under “exceptional circumstances” the government will help out.

The new guidance in November revealed for the first time the five avenues available for struggling trusts.

Academies are eligible for up to £200,000 in a ‘short-term advance’ to ease cash flow. It’s expected to be paid back within 12 months.

The other four grants don’t have a cap on the funding that can be issued.

The ‘enabling financial recovery’ grant is to “secure a return to financial stability for a trust in cumulative deficit” with a repayment plan “ideally within three years”.

The option of ‘building capacity’ aims to help “prevent financial failure” at trusts with a projected cumulative deficit.

Finally, trusts can apply for cash when ‘facilitating transfer’ of academies.

If ‘financially triggered’, the aim is to secure rapid transfer of academies out of a closing trust into one which will stabilise the school.

While if “educationally triggered”, the cash will provide financial stability to the incoming trust so they can prioritise school improvement.

Schools Week previously revealed the government paid £27 million in deficit funding to struggling academies in 2017-18.

However, interventions are not always successful. Between 2017 and 2019, £4 million was dished out to schools which ultimately closed.

Academies minister Lord Agnew says academies are more transparent over their finances than council-maintained schools.

The DfE has consulted on proposals to “address the disparity” – including requiring council schools to get permission for any related-party transaction and publish their annual finances online.