Questions over declaration of academy trust's £20k flat for CEO

An academy trust spent almost £20,000 renting a two-bedroom flat for its chief executive – and won’t say whether it got government approval for the deal.

Floreat Education Academies Trust spent £15,000 renting the flat, near to Floreat Montague Park primary school in Wokingham, for Janet Hilary. The rental, which incurred another £4,000 in utility, council tax and “other charges”, ran from August 2018 to August this year.

It should have been cleared

The trust, founded by Tory peer Lord James O’Shaughnessy (pictured), is being wound up after giving up its two schools in September. The other school is in Wandsworth, south London.

Floreat said it was the “best outcome and value for money” because Hilary had to operate as acting head at Floreat Montague after both the head and assistant head went on maternity leave. She lives around 35 miles away in London and, according to Google, the commute could take as little as an hour.

However, after Schools Week found that the school appointed an interim headteacher in January this year, Floreat said Charlotte Davis – the new head, who lived in Hertfordshire – had also stayed in the flat.

A spokesperson for Floreat said that neither Hilary nor Davis lived within commuting distance and the arrangement offered “best value for money” and “greater continuity” for the school.

According to Rightmove, the average rent for a two-bed flat in Wokingham is currently £1,063 per month. The £15,000 payment works out at £1,250 per month.

The trust spokesperson said: “The alternative would have been to hire additional leaders for the school on a temporary basis, incurring a significant cost that was considerably higher than the cost of renting the property for one year.”

There are questions, however, over whether the trust should have got government approval for the arrangement. An Education and Schools Funding Agency (ESFA) investigation into The Rodillian Multi-Academy Trust in June 2017 found trustees had broken rules after paying £875 per month to rent a flat for its accounting officer.

The report states that this was non-contractual and could be classed as an ex-gratia and novel and/or contentious payment.

The academies financial handbook states that transactions which are novel (where the trust has no experience or they are outside of the range of normal business) and contentious (which might cause criticism of the trust by Parliament, the public or media) must always be referred to the ESFA.

Floreat did not reveal whether it had sought government approval but a spokesperson said details of the accommodation will be included in its audited annual accounts to August 2019, which are due to be published early next year.

The rental property is not listed in Floreat’s 2017-18 accounts, despite the lease beginning a week before the end of its financial year.

The Department for Education said that “all academies must adhere to the terms set out in the Academies Financial Handbook and in their funding agreement”.

When asked whether the payment should have been declared, a spokesperson would only say that  “every transaction is judged on its individual circumstances”.

Matthew Clements-Wheeler, chair of the Institute of School Business Leadership, said the arrangement was “very unusual”. He added that the “kind of money” paid to senior staff was already “designed to compensate them for the disruption to their personal lives”.

Hilary was paid almost £130,000 in 2017-18. The trust had 316 pupils in that year, according to its annual accounts, which means she was paid the equivalent of £407.50 per pupil.

This would put her third in the list of highest-paid chief executives per pupil – according to a Schools Week investigation last year. It ranked the 213 trusts asked by the government to justify paying their staff over £150,000. Our analysis found that Dan Moynihan, the country’s best-paid academy boss on £440,000, got £13 per pupil.

Wheeler added: “It should have been cleared… That would be on my radar, thinking, ‘we’re a small trust, we’re actually housing not one but two of our senior staff when one lives just an hour and 15 minutes away’.”

Steve Edmonds, director of advice and guidance at the National Governance Association, said it was “wise in our view to refer to the ESFA any transaction that could be deemed as novel and contentious”.

Floreat transferred its two primary schools to GLF Schools in September and will soon close. Last year it closed Floreat Brentford Primary School. In January it was advertising for unpaid volunteers to fill key roles.

The trust had received £340,000 for two free school projects in London that never opened.