An academy trust was allowed to continue its expansion – planning the takeover of two existing schools and receiving initial DfE approval to open two new free schools – despite having significant financial problems.
The TBAP multi-academy trust (MAT) was established in 2013, with the aim of supporting challenging students who have been excluded from mainstream education.
However, the Trust, which runs 11 alternative provision academies, was served with a Financial Notice to Improve (FNtI) by the Education and Skills Funding Agency (ESFA) in August this year. The Trust’s financial statement for the year ending August 2017, published in February, revealed the trust was, by this point, already more than £1 million in deficit.
Despite being in financial difficulty, board minutes obtained by Schools Week, reveal that far from putting the brakes on the Trust’s ambitious expansion plans, the DfE had encouraged sponsorship of two more schools and had granted outline approval for two new free schools.
Board minutes dating back to December 2017 allegedly show that TBAP’s bid for new social, mental and emotional health free schools in Hounslow and Essex were initially accepted by the DfE – four months after the year-end financial statement had flagged a deficit. It was only in June 2018, that the minutes reveal the DfE had changed its mind and advised the Trust to step back from the bids due to its ongoing financial problems.
TBAP chief executive Seamus Oates and Paul Dix, chair of the trust’s board, have both stated that they “first became aware of cash flow issues and a likely significant deficit in December 2017” following an audit and that, since then the Trust has implemented “a recovery plan which involves restructuring at trust and academy level.”
It has been reported that, following the revelations, both free schools have been returned for the next round of bidding and it is likely that the two school sponsorships will be re-brokered.
Carla Jones, an Associate with Palmers, who specialises in debt advice and financial management issues for the education sector, said: “Where financial irregularities become an issue, it is crucial to get advice at an early stage in order to put in place measures which will help to secure the recovery of the educational establishment’s reputation and restore good governance.
“Seeking advice from a legal professional who has experience of financial compliance and governance issues relating to the education sector is particularly important.”
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