A brief look at some of the issues covered in Daniel Boffey and Warwick Mansell piece in the Observer: 'Are England's academies becoming a cash cow for business?'
The paper reports on complex 'related party transactions' by Bright Tribe MAT, founded by Mike Dwan. It looks at Bright Tribe's latest financial statement and its extensive section on related party transactions.
The main arguments of the piece are:
1. That academies in the chain were not aware that services were being outsourced to companies with links to Dwan.
2. Whether services contracts awarded by academies to Blue Support, facilities management (and others) were financially beneficial to them.
The piece notes the attempts made by Unison to get access to the procurement process.
However the sheer volume of related party transactions does appear to create potential conflicts of interest.
Financial gain?
It is hard to pinpoint financial gain.
In 2013/14 - £1m of payments were paid by Bright Tribe academies to his private businesses.
In 2014/15 - £1.9m.
However the piece points out that the: 'The majority of the costs to academies were incurred when staff were transferred over to Dwan companies.' And these costs were not discretionary.
As such only £192,000 of these combined £2.9m costs (2013-2015) were for services fees paid to Dwan companies. This is set against £3.5m donations Dwan has made to his academy chain.
DfE validated claims that companies working with academies charged cost. ('difficult to audit and prone to failure because “at cost” (in other words, non-profit) is highly subjective')
The paper reports claims that central service charges or 'top slice' of 8% of EFA funding is being charged by Bright Tribe to its academies. The actual charges are published in notes in the accounts but as there is no requirement to publish income per academy so a percentage is not calculable.
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