A director at the troubled Bright Tribe Trust has resigned days after his UTC was criticised by the government for paying out hundreds of thousands of pounds to the trust.
Professor George Holmes, the vice-chancellor of the University of Bolton, resigned on February 28 after two years on Bright Tribe’s board. The trust said he stepped down “to focus on his various and extensive other commitments”.
On February 23 the government issued a financial notice to improve to UTC Bolton, which is run by the University of Bolton and counts Holmes as one of its three controlling members.
The intervention was prompted in part by an Education and Skills Funding Agency (ESFA) investigation that highlighted concerns about £900,000 in related-party transactions, including £209,862 paid by the UTC to Bright Tribe Education Services, a company run by the Bright Tribe Trust.
The founder of the Bright Tribe Trust, Michael Dwan, is also a member of UTC Bolton, while North Consulting Limited, a company owned by Dwan, acted as the UTC’s secretary from August 2014 to November 2016.
Both Holmes and Dwan were directors of UTC Bolton until they became members in 2016.
The joint general secretary of the National Education Union, Kevin Courtney, warned of a “lack of accountability inherent in the academy system as a whole” and criticised the “continued failures of the regional schools commissioners” to bring the financial affairs of academy trusts under control.
He said the government must take action to “outlaw related-party transactions and bring all state-funded schools and educational institutions back within the accountability structure and oversight mechanisms of the local authority.
“That is the only way we will restore a public service ethos to education that gives our children and young people the education they deserve.”
The government’s investigation into UTC Bolton was prompted by an anonymous whistleblower’s allegations of financial mismanagement and poor governance.
It found evidence of unchallenged financial decisions, and “inadequate” financial controls and management of conflicts of interest.
Three of the six suppliers reviewed during the investigation, the University of Bolton, Bright Tribe Education Services and Greater Manchester UTC, were classed as connected or “related parties”.
Since September 2015, the UTC has paid £658,922 to the University of Bolton, £209,862 to Bright Tribe and £51,368 to Greater Manchester UTC.
Greater Manchester UTC closed last year. Its former directors include Dwan and his brother Andrew. Dwan’s North Consulting firm also acted as secretary, as it did with Bolton.
There was “no evidence of any formal procurement exercise” for any of the six suppliers and five had no signed contract. The one contract was described as “brief” and without “adequate detail”, the ESFA found.
“The trust’s current operating model of directly using connected/related parties to provide key functions, without following a proper procurement and contracting process, is inherently irregular and breaches the academies financial handbook, the trust’s own current procurement policies and EU procurement regulations.
“Directors were unable to fully demonstrate they were solely acting in the interests of the trust. This was due to inadequate management of conflicts of interest between the trust and connected parties.”
Bright Tribe insisted all related-party transactions were “provided at cost in full accordance with statutory regulations” and that UTC Bolton had shared an executive principal with Greater Manchester UTC, “the costs of which we apportioned evenly between the two institutions.”
A spokesperson for the University of Bolton insisted there was “nothing remarkable” about transactions between the UTC and the trust, which had been carried out with the “full knowledge of the funding body and the department” and were declared in accounts and signed off by auditors.
She added that Holmes had never received any payment or expenses “in cash or kind” from Bright Tribe or UTC Bolton, and his decision to step down from the board “had nothing to do with ESFA reports and is simply a matter of workload, nothing more or less”.