Durand Academy in south London will face limits on its spending powers if a “clear conflict of interest” is not managed within the next two months, school funding boss Peter Lauener has said.
Mr Lauener’s comments came after MPs grilled Durand headteacher Sir Greg Martin over the school’s relationship with GMG Educational Support (UK) Ltd, the management arm of private company Horizons London Ltd, which runs leisure centre facilities on the school’s site.
Mr Lauener, chief executive of the Education Funding Agency (EFA), has said he “wouldn’t wait” to issue Durand with a financial notice to improve if a “satisfactory resolution” to a disagreement over the running of the site is not reached.
The Commons public accounts committee also heard that as the sole director of GMG, Sir Greg was paid a £175,000 management fee in 2013/14, on top of his £229,000 salary and pension package as head of the academy.
When pressed on these arrangements, Mr Lauener said an agreement between the EFA and Durand made last May that the contract would be re-tendered without a bid from GMG had not been honoured.
Mr Lauener said: “We looked in great detail at the GMG contract, and our conclusion from that review, which we thought we had got agreement to, was that the GMG contract should be terminated and re-tendered, and we didn’t think it was appropriate that GMG re-bid for the contract.
“We thought there had been a clear conflict of interest and we didn’t feel the conflict had been managed properly.”
Mr Lauener said his agency and the Department for Education had been under the impression the “conflict” would be resolved by October 31, and they had been negotiating with the school since then.
“If we can’t reach a satisfactory resolution we will move quickly to issue a financial notice to improve. I would hope to get the whole matter resolved within two months. We wouldn’t wait that long to issue a financial notice to improve.”
Under such a notice, the school must get EFA approval for activities it can currently authorise, such as credit card borrowing, disposal of assets and staff payouts.
Sir Greg also faced questions over links between the school and other private companies, including The Coterie London Ltd, a dating agency for which he is listed as a director, and PLMR Ltd, a PR agency run by Durand vice-chair, Kevin Craig, which has been paid as much as £20,000 a month to work for the school since 2009.
Describing the dating agency as his “private business, run in private time”, Sir Greg said the only connection to the school was that mail related to the company was sent to his business address. He added that the school had re-tendered for the PR contract, with 20 bidders so far.
He also defended his pay, claiming the success of the school and its ability to subsidise boarding places and pupil lunches, and offer free swimming, was a result of his business ventures.
He said: “Those assets were built by the company that I formed. There were no assets belonging to the school.
“You don’t pay me, you don’t get the business. To have a contract which says ‘when you’re successful, we’ll keep the assets, you can go, your bit is over’, what message is that sending?”
Committee chair Margaret Hodge replied: “That’s called public service.”
Pic: Durand headteacher Sir Greg Martin