Question to the Department for Education:

To ask the Secretary of State for Education, what assessment he has made of the value for money of management and service charges paid by academy and free schools to related parties in England.

Academy trusts are permitted to use a proportion of their funding to pay for central services for their schools. This can be more efficient and cheaper than individual academies running or procuring the functions themselves. Where trusts top slice for central services, they must be transparent by disclosing in their annual accounts the services they deliver centrally and the trust’s charging policy.

The ’Academy trust handbook’ sets out the requirements related party transactions (RPTs). The handbook requires that trusts must:

• Report all contracts and other agreements with related parties to the department in advance.
• Obtain approval for RPTs where the contract or agreement exceeds £40,000.
• Pay no more than ‘cost’ for goods or services provided by related parties.
• Agreements to supply goods and services are procured through an open and fair process.

The handbook is available in full at: https://www.gov.uk/government/publications/academy-trust-handbook.

The department has also published a guide on managing conflicts of interests and RPTs to support trusts, which is available at: https://www.gov.uk/government/publications/related-party-transactions-information-for-academy-trusts/managing-conflicts-of-interests-related-party-relationships-and-related-party-transactions-good-practice-guide.