Source · Select Committees · Public Accounts Committee
Recommendation 33
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We have previously reported on the limited sanctions at the Department’s disposal to sanction trust...
Conclusion
We have previously reported on the limited sanctions at the Department’s disposal to sanction trust leaders who may be responsible for malpractice, including misuse of funds, across the sector. In our 2019 report on academy accounts and performance, we were concerned that the Department did not have an effective regime to sanction the academy trustees and leaders who were responsible for serious failings at trusts.85 The Department has since set out the powers available, including through other regulators, notably the Charity Commission and Insolvency Service.86 However, as the Charity Commission highlighted to us previously, the Department is the principal regulator for the academy sector, which is in practice managed and undertaken by the ESFA.87 The Department has its own powers under section 128 of the Education and Skills Act 2008, to sanction individuals engaged in misconduct by barring them from involvement in the management of education institutions.88 The Department told us that it took very seriously any instances of individuals acting inappropriately as a trustee of an academy trusts and that it had used its section 128 powers against 10 individuals. The use of these powers therefore appears to require quite a high bar and we asked the Department what other levers it had available to it to prevent an individual from moving from one trust to another where there had been concerns about their performance as a trustee. The Department and ESFA confirmed that the main mechanism for this was its section 128 powers, but that it could also work with the Charity Commission. They told us that they considered trusts were required to be very transparent in terms of who was on their board, and a high level of diligence in appointing trustees.89 83 Letter from Susan Acland-Hood, Permanent Secretary, Department for Education, to Dame Meg Hillier Chair of Committee of Public Accounts, PAC: 2019–20 Academies Sector Annual Report and Accounts, 1 February 2022; referencing t
Government Response
Not Addressed
HM Government
Not Addressed
6.1 The government agrees with the Committee’s recommendation. Target implementation date: September 2022 6.2 There is already a robust regime in place for prohibiting unsuitable individuals from participating in the management of independent schools, including academies. The government will also be making regulations under section 19(7)(c) of the Skills and Post-16 Education Act 2022 to prevent trust leaders judged to be unfit from moving to elsewhere in the education system. Where an individual is currently subject to a direction prohibiting them from participating in the management of an independent school they are also excluded from accessing a range of ESFA funding in accordance with the published Funding higher risk organisations and subcontractors policy. 6.3 In that document, the department has continued to improve its mechanisms for assessing the risk of trust failure. Furthermore, the Schools White Paper sets out plans for the better regulation of trusts, including a set of statutory standards underpinned by new intervention powers. The White Paper announced the launch of a regulatory review in May 2022 looking at all aspects of trust accountability and regulation. In conducting the review, the department will have regard to the issues raised by the Committee. The department will write to the Committee by September 2022 with a full response. 30