Academy chain spends £440,000 on deals with firms run by CEO and his daughter

The TES is reporting that another academy chain has come under the spotlight after paying almost £440,000 to IT and clerking companies owned by its chief executive and his daughter.

The Wakefield City Academies Trust (WCAT), which sponsors 21 primary and secondary schools across Yorkshire, has paid £316,489 to an IT firm belonging to its chief executive Mike Ramsay, its annual accounts reveal. A two-year contract worth £123,012 was also awarded to HDR services, a company owned by the chief executive’s daughter, for clerking work, the academy chain’s accounts reveal. 

But the WCAT insists that the spending was done through a competitive tendering process. 

In 2013/14 and 2014/15, the trust paid Hi-Tech Group Ltd, Mr Ramsay’s company, to deliver a management information system. The trust says the business won a competitive tender. The next nearest tender was more than £1 million more expensive than Hi-Tech, WCAT said. 

A statement from WCAT said: “Internal vetting procedures established the contract represented best value in terms of quality of service compared to other ICT support services at other schools. It also represented a financial saving of £38,150 per annum to the Trust.

“The other two contracts with HDR and Hi-Tech Group were put out to tender. Both were the subject of internal and external audits and scrutiny from an Education Funding Agency’s Governance and Financial Compliance focussed inspection.

“Any inference that proper processes were not followed would be wholly inaccurate.”

More at: Academy chain spends £440,000 on deals with firms run by CEO and his daughter

Do you agree that using the companies in question was a good business decision to save money, or should they not have used a company with such close ties to the CEO? Let us know your thoughts in the comments below or on Twitter. ~ Sophie

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Categories: Academies and Leadership.

Comments

  1. Nairb1

    These financial arrangements are now becoming commonplace. The government knows all it needs to do is weather a temporary storm and then its plan to divert public funds into private pockets can continue apace.

  2. Simon Foster

    I can not see the problem with this. As long as it was a completely transparent process and the contracts were won on merit then I have no issues. The EFA have audited the process and found no discrepancies. 

    The academy chain is saving money which can then be spent on teaching and learning.

    It seems to be that anyone that is involved as a Trustee/Board Member/Local Governing Body is vilified by teaching practitioners.

  3. Nairb1 One third of academy trusts have related party transactions, evidence to Ed Select Committee revealed.  http://schoolsweek.co.uk/a-third-of-academy-trusts-paid-businesses-linked-to-staff-and-7-other-findings-from-todays-education-committee/

  4. Simon Foster Peter Lauener, EFA boss, told Ed Select Committee 74 academy trust accounts (7 per cent) ‘warranted further scrutiny by the government, with 24 trusts found to have broken rules when dishing out cash to related parties.’
    Not quite true, then, that ‘no discrepancies’ were found.
    24 is, of course, a tiny number of academy trusts, but auditing of academy accounts is not done by EFA but by independent auditors paid for by the academy trust.  They’re supposed to check whether proper procurement has taken place but some signed-off academy accounts have only been found to be faulty after whistleblowers have alerted the EFA.
    The best system would be the one Margaret Hodge, former chair of the Public Accounts Committee recommended: all related party transactions between trusts and firms associated with trustees or their relatives should be banned.
    http://schoolsweek.co.uk/a-third-of-academy-trusts-paid-businesses-linked-to-staff-and-7-other-findings-from-todays-education-committee/

  5. Simon Foster

    Janet2 

    Janet, I own and run and outstanding Alternative Curriculum company which works very closely with pupils who are either disaffected or are in danger of becoming disaffected from main stream education. Our program has been recently inspected by a lead HMI and was included in the SSAT as an outstanding provision. Her comments were that OFSTED had never seen a provision like ours and provides ‘lost young pupils’ opportunities that they would not get whilst they are at school.

    I was also invited to become a Co opted Governor for two local secondary schools as I am considered an expert in my field and my input is seen as essential for the Governing Body. 

    My company provides this outstanding provision to these schools and both are going to be converting to Academy status later this year.

    Are you suggesting that I should step down as a Governor? or should I let down the children we support and withdraw my services and make three staff members redundant?

  6. Nairb1

    You can’t see anything wrong with it? You don’t think that a tender from a company owned by the CEO came in at over a million pounds cheaper than the next lowest? Do you really think that the other companies bidding for the contract were so incompetent that their bidding was out by a factor of at least 200%?

Let us know what you think...