The government’s favourite academies ‘success story’ just collapsed

Perry Beeches head Liam Nolan with Michael Gove
Bex Sumner

The government’s academisation programme is already in chaos. Now its flagship academy trust has collapsed. The executive head of Perry Beeches – held up by the Conservative government as a poster child for academisation – has resigned amid allegations of financial mismanagement, leaving five schools and hundreds of children facing an uncertain future.

The departure of the head and the governing board came in the wake of an explosive investigation into financial mismanagement at the trust. The five schools it runs in Birmingham, four of them free schools, will now be managed by the Department for Education until new sponsors can be found.

The trust has racked up an estimated £1.8m in debt under the stewardship of Liam Nolan, who became head of the struggling Perry Beeches school in 2007 before turning it around and going on to open four further Perry Beeches schools.

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If there has been a poster child for the Conservatives’ education agenda, it is Nolan. Although a committed Labour supporter, Nolan has spoken at Conservative party conferences, and his schools have been hailed as “a real success story” (David Cameron), “the best schools in Birmingham” (former Education Secretary Michael Gove) and used as an example of academies that deliver “truly extraordinary outcomes for young people” (current Education Secretary Nicky Morgan).

But, all the while, Nolan – who once complained that his £120,000 a year salary was “much less than other industry bosses” – appears to have been milking public money for personal gain. A damning report by the Education Funding Agency found that:

  • Nearly £1.3m was paid to a private firm called Nexus – with “no evidence of a formal procurement exercise”.
  • Nexus, in turn, paid £160,000 to Liam Nolan’s company, Liam Nolan Ltd, over two years as “an additional salary”.
  • Records were erased, in breach of academies rules, meaning that £2.5m in free school meal funding could not be confirmed.
  • The schools are still under investigation over their hiring, admissions and exclusions practices – and over allegations that the trust inappropriately used funds to pay three local Labour MPs £5000 each (they have since repaid the money).

Now the schools find themselves facing an uncertain future. They have no sponsor and no board, which probably wasn’t what the Conservatives meant when they said schools should be autonomous. The Regional Schools Commissioner, tasked with finding both, faces a serious challenge; along with the trust’s debts, some of the schools are running large deficits, and the Department for Education has so far struggled to find new sponsors.

It’s a mess. But remarkably, a Whitehall source claims that the Perry Beeches affair proves that the academy system works:

This shows the academy system is working, with the EFA identifying issues and regional schools commissioners intervening and rebrokering effectively, as part of a robust system of oversight.

However, Another Angry Voice points out that the corruption was only investigated after a tip-off from a whistleblower.

 

Perry Beeches is not the first academy chain to run into trouble over allegations that its executives have used public funds for their own enrichment. As The Canary has previously reported:

The academies also get more power over their own budgets – and many of them are using that power to spend taxpayers’ money on outsourcing school services to private companies owned by the academy chains’ directors or trustees or their relatives. According to the National Audit Office, nearly half of academy trusts have engaged in such ‘related party transactions’ – handing themselves £71m of taxpayer money in 2013 alone.

It certainly will not be the last. The result of taking schools out of council control and handing them over to people like Liam Nolan is, well, that they end up in the hands of people like Liam Nolan.

On resigning, Liam Nolan wanted it known that he had “thoroughly enjoyed his time at Perry Beeches”. His pupils, however, may not feel the same. They now face a period of uncertainty while they wait for new private interests to take over the management of their education – so long as it’s deemed profitable enough to take on.

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Featured image via YouTube screengrab.

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