The free market in education is a disaster, and children are paying the price, writes Judy Cox

My son is a pupil at Green Spring Academy Shoreditch. Last week the Chief Executive Officer and other senior leaders were suspended after allegations of cheating in GCSEs. I looked up academy schools online and was horrified by the sheer scale of the transfer of funds from children to corporations and individuals. Labour established the academy system but it really got going after 2010. We were promised private sponsorship, rising standards, freedom to flourish. The reality is very different. The government wants all schools to become academies. This is a truly terrifying prospect. Academies are a mechanism for syphoning off millions of pounds of public money into private bank accounts with little or no scrutiny, no investment and no risk – except to the children. 

How it works: Pay

Your local authority has a budget for schools. When a school converts to an academy (they no longer have to consult staff or parents) they get their share of that money. Academies are run by not-for-profit trusts, but trusts can generate huge revenues for private individuals.

Head teachers in local authority schools earn around £60,000 a year depending on size and location of school. Compare that to the highest paid academy bosses:

• Sir Danial Moynihan, Harris Academy Trust, £395,000 a year.
• Stephen Kenning, Aspiration Academies Trust, £225,000 a year plus Paula Kenning, £175,000 a year.
• Mark Keary, Green Spring Academy, Shoreditch, £220,000 a year.
• Professor Toby Salt, Ormiston Academies Trust, £180,000 a year including a £30,000 pay rise last year. 

Last year Woodlands Academy Trust handed a £500,000 pay out to two executives who left after ‘underperforming’. Two of the trust’s five schools were in special measures. In November 2016 it was revealed that Wakefield City Academies Trust paid their CEO Mike Ramsay £82,000 for 15 hours a week. The trust also paid £440,000 to private companies owned by Ramsay and his daughter. A Department for Education investigation found 16 breaches of official guidelines relating to governance and financial management at the trust.

How it works: Private contracts

Academy trusts can buy in services from profit making companies. The services should be provided ‘at cost’ but in practice lucrative contracts, are awarded to CEOs and their friends – ‘related party transactions’. Back in 2013 the National Audit Office found that £71 million had been paid by academies to private businesses owned by academy directors, trustees and relatives, a figure that would be much higher now. 

Such ‘transactions’ are central to the relationships between academies, business and government. Leigh Academies Trust paid £111,000 to Shoreline, a consultancy firm run by Frank Green, who also runs Leigh Academies Trust. He was appointed as Michael Gove’s first Schools Commissioner in 2014. Christian car salesman and Tory donor Sir Bob Edmiston, set up Grace Academy in 2008 and was made a peer in 2010. In 2014 it was found that the trust paid more than one million pounds directly to Edmiston or to companies owned by him and other trustees. Grace Academy also employs Edmiston’s brother in law and has paid his company some £367,000 over six years for consultancy work. 

Last year Perry Beeches Academy Trust was stripped of its five schools. The trust paid CEO Liam Nolan £120,000 a year and paid £1.3 million to a company, Nexus, of which Nolan was the sole director. Nexus paid Nolan £160,000 over two years. The company also donated £5,000 each to three Labour MPs Jack Dromey, Gisela Stuart and Shabana Mahmood, which they later repaid.Both David Cameron and Michael Gove visited the Birmingham schools. Nolan was one of three executive headteachers at the trust, and also the Accounting Officer and the Chief Executive. He was forced to resign as chair of the Trust, but continued as a head teacher for months until finally forced to resign in May 2016. 

The flow of funds from public to private also means a flow from supporting children to buying services. A report by the London School of Economics in November 2016 found that generous funding awarded to new academy schools was, ‘largely diverted to administration rather than the classroom or front line services’. ‘Administration’ includes some surprising items. Amanda Phillips, CEO of Paradigm Trust, is paid £195,000 a year but still claimed for the broad band connection at her French holiday home. Ian Cleland of the Academy Transformation Trust demanded that staff reapply for their own jobs while claiming thousands in expenses for items including the lease on a luxury jaguar and meals at Marco Pierre White restaurants. Hundreds of thousands of pounds have been diverted from the classroom, from support for children with special needs, from breakfast clubs, from swimming and music lessons, into the bank accounts of this new breed of CEOs. 

How it does not work: Raising standards

Academies were supposed to raise standards, especially in deprived areas. In fact, a Local Government Authority report from April 2016 found that since 2012, 81% of local authority controlled schools had been rated as good or outstanding by Ofsted, but only 73% of academies were awarded the same grade. Schools judged to be inadequate are more likely to improve if they stay with the local authority. One report found that, ‘Academies do not automatically improve standards’while a recent Education Policy Institute report found that improvements in standards when schools became sponsored academies, ‘tapered off after three years’.

This failure to raise standards is more striking considering that academies can massage their statistics through control over the intake of pupils. The Education Policy Institute found that academies and free schools accept fewer children on free school meals than local authority schools. Canary Wharf College had one child eligible for free school meals in its first intake. The college is in Tower Hamlets, where 50% of the children are entitled to free school meals. Last year a report by Oxford and Kingston Universities found that academies, ‘have developed behaviours that may have a negative long-term impact on society’’ as they, ‘have become selective and do not teach the children of their local community.’

There is huge pressure on all schools to perform well in exams and this is intensified by the size of the financial rewards available to academies, especially those judged good enough to expand. Education Datalab found that secondary schools are pushing low achieving children out of school before they take their GCSE exams and so boosting their success rates. Academy chains are disproportionately represented among the schools with the highest number of early leavers. Government figures show that 65% of excluded pupils have Special Educational Needs.This suggests that schools are under so much pressure that they will ‘jeopardise pupils’ futures just so that they can artificially inflate their performance.

The Harvard Business Review found that heads who excluded up to 25% of final year students improved the school’s performance dramatically but the improvements in pass rates cannot be sustained year on year. However, the report found that 38% of such heads had been knighted and they are typically paid around 25% more than other ‘leaders’. No agency is responsible for investigating the ‘case of the disappearing children’.

How it does not work: Regulation

Academies are not regulated by the local authority. They are supposed to be overseen by the Department for Education. In 2015 a House of Commons Public Account Committee reported that the Department for Education, ‘presides over a complex and confused system of external oversight’, ‘allowing schools to fall through the gaps in the system’. In rare cases, such as the Kings Science Academy, Bradford, where executives paid government grants straight into their own bank accounts, there are prosecutions for fraud. Financial mismanagement at Kings and at Perry Beeches was exposed by whistleblowers rather than being picked up by official scrutiny. The vast majority of the known party transactions are not illegal. 

Since 2014, Regional Schools Commissioners oversee and approve new academies. Commissioners’ pay varies between £120,000 and £145,000 a year but they were still keen to work for the very trusts they are supposed to oversee. Vicky Beer, OBE, was the commissioner for the North West until she moved to the Greater Manchester Learning Trust. The trust’s offer was, ‘too tempting to turn down’, said Ms Beer. Multi academy trusts poach commissioners – as the Times Educational Supplement suggested, ‘all it takes is a MAT to come waving a £200,000 cheque, and there you go’. 

Michael Wilshire, head of Ofsted, said it was not clear what the commissioners did, beyond ‘re-broker failing academies’. There are now 60 ‘orphan’ schools – academies whose sponsors have been removed after failed inspections and have not found new sponsor six months later. Orphan schools are seen as a poor risk because of budget deficits, dilapidated buildings and debts but they cannot be taken back into local authority control. Baverstock School, Birmingham is now faced with closure, leaving pupils scrambling for places elsewhere.

Our children have become commodities. Their successes and failures have been monetised by a system that cuts school budgets while allowing millions to be diverted from classrooms to the bank accounts of the rich. Everything is sacrificed to short-term success and the financial rewards that brings. The most ruthless reap the greatest rewards – millions of pounds, knighthoods, power and influence. The free market in education is a disaster and children are paying the price.