Free school and academy bureaucracy is costing taxpayers millions in private consultancy fees

date: 12 March 2014

embargo: 00:01hrs Friday 14 March 2014

Free school and academy bureaucracy is costing taxpayers millions in private consultancy fees

The government’s free school and academy programme has cost taxpayers nearly £80m in private consultants’ fees, according to a new TUC report published today (Friday).

The research – which analyses official Department for Education (DfE) figures –shows how since 2010 ministers have signed off £77m of public funds to lawyers, head-hunters, accountants, estate agents and management consultants.

The report says the additional bureaucratic cost of starting up free schools and academies is diverting money away from children’s education.

The findings come as the TUC and its education unions prepare to launch a new campaign against privatisation and profit-making in schools, colleges and universities.

The report raises a series of concerns about the government’s education reforms including:

The use of private consultants – £76.7m of taxpayer funds (which might otherwise have been available for children’s education) has been paid to 14 private firms to provide additional services to free schools and academies since the government took office.

These include PKF UK Ltd, an accountancy group whose parent firm BDO UK claims on its website to offer “offshore tax planning” to “high net-worth individuals”.  PKF UK Ltd was paid more than £8m in public funds between December 2010 and June 2013.

Another company to receive millions in public money is Veredus, which is part-owned by outsourcing giant Capita. Veredus, which specialises in head-hunting, has received over 4.7m from the government.

Value for money – the government has expanded its free school-building programme despite the fact that many remain under-subscribed.

Between October 2012 and December 2013 it spent over £200m of taxpayers’ money to purchase land and property for free schools, bringing the total spent on free school-building projects to over £500m since 2010.

These purchases went through even though free school students make up a tiny proportion of school learners in England.DfE figures show that last autumn the 154 English free schools for which official data was available were teaching 21,973 pupils – the equivalent of 11 large secondary schools. This equates to just 0.3 per cent of the 7.5m pupils currently attending state-funded schools in England.

Conflicts of interest – the TUC research also reveals that at least three of the twelve largest chains of academies (schools funded and overseen directly by the government and managed independently of local authorities) have links to the Conservative Party.

Lord Harris of the Harris Federation has been a Conservative donor, Lord Fink, a director of Ark Schools, who – like Lord Harris – is a Conservative Peer and is a former Conservative Party treasurer and major donor, and the David Ross Foundation, which was set up by the co-founder of Carphone Warehouse, who has also donated to the Party.

The report also highlights how the academy sponsor and Conservative donor Theodore Agnew chairs the DfE’s academies board, an internal group aiming to boost the number of sponsored academies.

Value extraction – the report highlights how taxpayer-funded academy chains have paid millions of pounds into the private businesses of directors, trustees and their relatives.

These include Grace Academy, which runs three schools in the Midlands and was set up by Conservative donor Lord Edmiston. Grace Academy has paid more than £1m either directly to or through companies owned or controlled by Lord Edmiston, to trustees’ relatives and to members of the board of trustees.

Corporate ownership – the number of private companies applying to run free schools has tripled since 2011.

Between 2011 and 2013 applications from corporate sponsors shot up from 8 to 25 per cent. Over the same period applications from teacher-led groups plummeted from 24 to 6 per cent and applications from parent and community groups fell by a third.

TUC General Secretary Frances O’Grady said: “The government’s education reforms are being driven by free-market dogma rather than what is best for learners.

“Money that should be spent on children’s education is instead being swallowed up by private firms and in expensive property deals.

“This report highlights how companies have been allowed to cream-off millions in profits from running schools and support services.

“Let us be under no doubt, our world-class public education system is under threat from corporate interests and our schools, colleges and universities are now less accountable to taxpayers and local communities.”

Next Tuesday (18 March) the TUC and the education unions are launching Education Not For Sale – a campaign against privatisation and profit-making in schools, colleges and universities.

Education Not For Sale calls for:

•  A commitment from all political parties that no school should be run for profit, either directly or indirectly, and for this to be enshrined in legislation.
• All publically-funded education institutions must be democratically accountable to their local communities, which includes a key strategic role for local authorities.
• All pupils at state-funded schools must be taught by fully qualified teachers and all schools must be governed by the national curriculum.
• The funding and governance of all state-funded schools should be fully transparent to enable local communities to determine how state funding is being used, and potentially misused, in all local schools. This should include requiring all schools to establish a register of interests to prevent indirect profit-making by private companies
• In further and higher education, the government should introduce a new requirement that public support must only go to educational and training organisations that are not-for-profit, and should put in place a tougher regulation for those organisations owned by for-profit companies.

NOTES TO EDITORS:

- Additional money given to private firms to provide services for free schools and academies, April 2010-December 2013

Firm	Type of business	Amount received (£)
Appleyards Ltd	Management consultants	8,431,966
Bates Wells Braithwaite	Solicitors	1,395,688
Cambridge Education	Education consultants, owned by Mott MacDonald	2,161,535
DTZ Shared Services	Property services consultancy	2,901,522
EC Harris	Built asset consultancy	6,647,464
Jacobs	On government list of approved free school firms	9,721,870
Jones Lang Lasalle	Global real estate services firm, specialising in commercial property management	2,933,874
Mace Ltd	Project management, construction	8,086,885
Mott MacDonald	Building project management	5,495,424
PKF UK Ltd	Accountants, now part of BDO UK	8,311,197
Place Group Ltd	Free school and academy consultants	5,189,553
Turner & Townsend	Management and construction consultancy	10,063,199
Veredus	Headhunters providing interim management teams to schools and some management consultancy	4,704,525
Capita Symonds	Management consultancy	686,813
	Total	76,731,520

Source: DfE

- A copy of the report can be found at: https://www.tuc.org.uk/sites/default/files/Education_Not_For_Sale_Repor_Report.pdf

- A copy of the Education Not For Sale campaign document can be found at: https://www.tuc.org.uk/sites/default/files/Education_Not_For_Sale.pdf

- All TUC press releases can be found at www.tuc.org.uk

- Follow the TUC on Twitter: @tucnews

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