Question to the Department for Education:

To ask the Secretary of State for Education, what assessment her Department has made of the effectiveness of financial transparency arrangements for academy trusts and local authority maintained schools.

The Department requires a high level of accountability and transparency of academy trusts. Academy trusts’ status as companies, charities, and public sector bodies means they have a rigorous tri-partite framework. Individual trusts must publish their annual audited accounts online, including details of their objectives, achievements and future plans, and also set out what they have done to promote value for money in support of those objectives, as part of their annual report and accounts.

The primary responsibility for the oversight of academy trusts rests with the trustees themselves, supported by clear financial management and governance requirements set by the Department in Academy Trusts’ Funding Agreements, the Academy Trust Handbook and Academies Accounts Direction. The Department expects academy trustees to deliver strong governance and monitor the financial health of their trust or school and ensure it remains a going concern. The transparency of finances in academy trusts enables the Department to identify problems quickly and intervene where required.

Local Authorities are the accountable body for maintained schools and, in line with national frameworks and guidance set by the Department, they monitor and intervene in these schools to reduce the risk of financial failure or misuse of funds. Each Local Authority has a scheme for financing schools which sets out the financial relationship between it and its maintained schools, and the Department publishes guidance setting out what is required or permitted in schemes. Since 2019, the Department has implemented transparency measures across the maintained school sector similar to those in academies, in order to strengthen the arrangements for maintained schools.