Corruption and School Academies

[John Simkin]

Alarm over academy deals linked to sponsor

Rob Evans, Richard Cookson and Matthew Taylor

Monday March 5, 2007

The Guardian

A school in the government's city academy programme has given more than £300,000 to organisations linked to its multi-millionaire sponsor, with the approval of the Department for Education and Skills, which appeared to waive its normally strict rules on tendering out contracts.

The Grace academy in Solihull is sponsored by Bob Edmiston, a car dealer and property developer who has donated more than £2m to the Tory party. The school awarded three contracts to the IM Group, a company owned by Mr Edmiston, without asking for bids from other organisations. It has also paid £53,000 in the past two years to Christian Vision, a charity founded by Mr Edmiston, an evangelical Christian, to promote the religion around the world.

Last night Steve Sinnott, general secretary of the National Union of Teachers, said the findings raised "serious concerns" about the academy programme.

"The awarding of contracts to companies connected to the sponsor would seem questionable. With local authority schools, governors have to declare any interest."

Sarah Teather, the Liberal Democrat education spokeswoman, said: "That companies connected with academies' sponsors are winning contracts that haven't been put out to tender is worrying. Lack of proper regulation will leave loopholes for the unscrupulous."

Academies form a central plank of the government's school reforms, but have been criticised for allowing private organisations and individuals too much influence over state education. Under the scheme, business people, firms and other groups pay up to £2m in return for a large degree of control over the school. The prime minister wants to set up 400 academies; 46 are already open.

The Department for Education and Skills says there are "strict" rules governing the awarding of contracts by academies, which need to obtain at least three quotes to ensure public money is spent properly. But last night it refused to say why it had apparently waived the rules, allowing some academies to award contracts without getting alternative bids.

"Each academy's accounts are independently audited and auditors have not had problems with those accounts," a DfES spokesperson said. "All the accounts are in the public domain and must also be filed with the Charity Commission for added scrutiny."

Mr Edmiston, who pays £2m a time to sponsor two academies in the Midlands, had his nomination to the House of Lords blocked by its vetting body after the Inland Revenue said his company, IM Group, had been in a tax dispute.

Accounts for his 1,350-pupil Grace academy show that the school paid the IM Group £281,000 over two years to organise the payment of wages to school staff and for other "management services". Mr Edmiston said that before the academy opened in September last year, it had "no facilities to pay the payroll ... My company conducted these functions for them and charged the cost, without mark up".

The academy has also paid £53,000 in the past two years to Christian Vision. Mr Edmiston said: "Instead of contracting an outside management company, who would have charged many times the cost to us, I transferred a member of Christian Vision staff to manage the project and Christian Vision invoiced his salary to Grace. Christian Vision is also a charity and there is no personal benefit involved."

Mr Edmiston said "costs were valued in comparison to the existing formally tendered DfES Academies Project Management Consultancy framework".

It was disclosed in 2004 that the King's academy in Middlesborough paid £290,000 to groups and individuals connected to its sponsor, Sir Peter Vardy. It did not obtain tenders for those contracts, but later changed its policy to seek tenders "wherever possible".

The West London academy paid £240,000 over three years to businesses and a charity connected to Alec Reed, founder of the Reed employment and training firm. These contracts were reportedly given without tenders. The academy did not want to comment.

http://www.guardian.co.uk/frontpage/story/0,,2026732,00.html