Academy trust refuses to say how much its founders were paid for working for it in recent years

An academy trust is refusing to disclose how much its joint founders were paid in recent years while working for it, describing this as “sensitive personal data”.

The Griffin Schools Trust is also not revealing what the day rates for Liz Lewis and Ange Tyler were while they did consultancy work for the trust via a company they own; how many days they worked; or even how many people in total worked for the chain via the company.

Academy directors who work for trusts as employees have to have their salary and pensions payments disclosed, to within £5,000 bands.

Griffin’s position seems to leave Lewis and Tyler’s remuneration details undisclosed because they worked as consultants via a company rather than being employees. It came as a response from Griffin to a freedom of information request by me.

Griffin, which controls 13 academies, has been under intense scrutiny since its largest school, Stantonbury International in Milton Keynes, spectacularly failed an Ofsted last year, with the secondary now to be handed to another trust.

The background

As covered extensively on this website, the Griffin Schools Trust (GST) has had a close relationship with a private company called Capital Talent. This was set up and is jointly owned by Lewis and Tyler, who themselves are in a civil partnership relationship.

Capital Talent provides school improvement services to the trust, by placing consultants in its schools. GST accounts show £1.2m was paid to Capital Talent over the period 2012 to 2019.

The trust also operates from the offices of Capital Talent in Catford, South London. Accounts show that GST spent £529,000 to the company for “rent, insurance and related services” over the period 2013 to 2020.

The trust has said all contracts with Capital Talent for school improvement were provided “at cost, with no element of profit”, while the rental payments were also made “at cost and below market value”.

As I reported in November, Capital Talent’s “shareholder funds” – the only two shareholders are Lewis and Tyler - grew to nearly £800,000 in 2018-19. It is unclear how much work other than that for the GST the company does.

The detail

During 2019-20, Lewis was not employed by GST, nor was she a trustee. However, as a member of the trust until January, she was categorised as a “person of significant control”* and therefore subject to government disclosure requirements which state that individuals with influence over charities have to have any payments to them made transparent.

Tyler is in a civil partnership relationship with Lewis, so until January would also have been classed as a related party.

Disclosures about payments to Capital Talent were made in GST’s annual accounts, under rules which state that transactions with related parties have to be set out. GST appears to have decided that the “related party” for which disclosure is a requirement is Capital Talent itself: the company owned by Lewis and Tyler.

Yet I understand that Lewis continued to work for the trust during the period, as a consultant. I also understand that that work allowed her to remain highly influential in the trust.

In an email sent to me in October, a spokesperson for the trust said: “GST uses the services of Ms Lewis and Ms Tyler and other self-employed school improvement associates on an academic year basis. Ms Tyler no longer works for GST through Capital Talent.”

It appeared to me, following this response and the declarations in GST’s 2019-20 accounts, that, if Lewis and Tyler were indeed being paid to work for the trust, via Capital Talent, then not only the payments in total to the company they own should be declared, but that part of the related payments which was for their own work for the trust as consultants.

In other words, the trust should be treating not just Capital Talent, but Lewis and Tyler themselves as related parties, disclosing details of how much they themselves were effectively being paid by the trust for the work they did for it.

What I asked for

I therefore asked the trust, under freedom of information, how many days Lewis had worked for the trust, via Capital Talent, in each of 2017-18; 2018-19; 2019-20 and 2020-21 (to date); what her day rate had been; and what the total amount paid for her work had been.

I made the same request in relation to Tyler’s work in each of these years.

Finally, I asked GST how many people in total had been paid to work for it via Capital Talent in recent years, and how many days in total they had worked.

The response: trust will not provide data

Surprisingly, GST refused all elements of my request. It cited Section 40(2) of the Freedom of Information Act, which relates to personal data. The information requested amounted to “sensitive personal data” and thus to release it would constitute a breach of the Data Protection Act 1998, according to the trust’s response.

The upshot, then, is that while the public know, from the accounts, how much Capital Talent has been paid by the GST, we do not know what day rate Lewis and Tyler received; how much work they have actually been doing for the trust; and whether the payments to Capital Talent were mainly for their work, or for a much larger group of people.

The latter seems significant: if payments to Capital Talent were mainly to other people to do the work, and those payments were such that Capital Talent did not make a profit on them (presumably meaning that all or close to all such payments went to the consultants themselves, rather than to Lewis and Tyler’s firm), that might constitute quite a different position from one in which payments went mainly for work by the two founders themselves.

Analysis

It seems particularly staggering that GST would not release simple statistics on how many people worked for the trust via Capital Talent in each of a number of recent years; and what the total number of days worked by those people was.

The second part of the request would have provided useful information, in allowing the public to work out what the average day rate being charged by this company was, thus providing a further useful context about the statement in GST’s accounts that these were “at cost” transactions.

Further, regardless of why this information might be important, it is hard to see how this could constitute a request for “sensitive personal data”: simple statistics on the number of consultants and how many days they worked were all that was requested.

If the answer to come back was that not many more than two people had worked for the trust via Capital Talent in this way, then perhaps this might constitute information which Lewis and Tyler might regard as potentially awkward for them. But, again, it is hard to see how these statistics could constitute their own “sensitive personal data”.

Moving on to the data specifically requested in relation to Lewis and Tyler, clearly there is more of a case that this might be seen as “sensitive personal data”. But the upshot of the non-disclosure of how much GST paid for their services, in either the trust’s accounts, or via the response to my FOI, is effectively to ensure that the payment to them via a company they own, rather than directly through employment, has meant that cash given for their services is not disclosed. Had they been directly employed by the trust, it would have to have been.

For, to remind you, Lewis was a member of the GST during the period to which my FOI related. (She was a member until standing down on January 21^st this year, Companies House records show). Companies House records show that, as a member, Lewis was a “person with significant control” over GST.

The government’s Academies Accounts Direction (AAD) for 2019-20 (the year to which the latest accounts relate) says that a related party includes someone with “significant influence over the entity”.

So members, such as Lewis, should count as related parties. And, as the partner of Lewis, Tyler would also count as a related party.

The AAD also states that full details of transactions between academy trusts and related parties should be disclosed, including the names of the related parties and the amounts involved.

That, to me, looks to mean that any payments to Lewis and Tyler, whether or not via Capital Talent, should have been disclosed in the annual accounts. If both had carried out work directly for the trust, as in been employed by them, there would have been no question that it had to have been revealed.

It is only the fact that the trust seems to have decided that the related party in this case was Capital Talent, the company owned by Lewis and Tyler, rather than that individuals themselves, which would appear to have led to the information not being disclosed in the accounts.

Yet this means that the pair have not been subject to the same level of financial accountability as applies to academy chief executives working directly for trusts who serve as trustees/people with significant control. In these cases, their remuneration has to be, and is, disclosed in the trusts’ annual financial statements.

There is a good case, then, that while both Lewis and Tyler would view this information as “sensitive”, they should have a reasonable expectation – as someone influential in a trust, and her partner – that it stood to be disclosed in the public interest. For, to repeat, if they were paid directly by the trust, details of that remuneration would indeed be disclosed.

Other official documents stress importance of transparency

Senior people working for local and national government should have an expectation that payments to them will be disclosed, official guidance also makes clear.

As set out many times on Education Uncovered, senior staff working for local authorities – including directors of children’s services/directors of education – have to have their remuneration set out against their names or positions in local authorities’ annual accounts.

A government document entitled “Public sector pay and terms: guidance note” makes this clear. It states that “contracts for senior staff should include the expectation that salaries will be published”.

A guidance document called the Charities SORP (Statement of Recommended Practice), which is referenced in the DfE’s Academies Accounts Direction, also underlines the point about the public interest in the disclosure of related party transactions.

Under “disclosure of trustee and staff remuneration, related party and other transactions,” this document states: “the disclosure of certain transactions is important for stewardship purposes to provide assurance that the charity is operating for the public benefit and that its trustees are acting in the interests of their charity and not for private benefit. For this reason this SORP requires that disclosure must be made of transactions involving trustees, related parties, staff remuneration and ex-gratia payments.”

It adds: “A decision by a charity to enter into any transaction must be made in the charity’s own interests and for the benefit of its beneficiaries. The disclosure of related party transactions is an important element of transparency in financial reporting because:

-related parties may enter into transactions that unrelated parties would not;

-transactions between related parties may not be made at the same amounts or on the same terms as those between unrelated parties; and

-the existence of the relationship may be sufficient to affect the transactions of the charity with other parties.

“Users of the accounts need to be able to assess whether the relationship between the charity and the other party or parties to a transaction may have been influenced by interests other than those of the charity. Disclosing related party transactions also shows how far, if at all, the reported financial position and activities may have been affected by such transactions.”

This document states that accounts must include a description of transactions with related parties and the amounts involved. As I read that, this suggests that GST should be disclosing basic information about any payments made in respect of work by related parties: the amount paid per day, the number of days worked, and the total amount paid.

After receiving the FOI response, I put points to a public relations consultant working for Griffin Schools Trust, including that not disclosing directly payments made for the work of its co-founders seemed to leave the trust lacking in transparency. I sent an email about this on March 30^th, only to be told that the person who could respond was “on annual leave”. When I went back to the spokesperson for a response earlier this week – April 13^th – I was told they were still on annual leave, so there was no comment.

Final comment

This is another case which shows up the line, favoured by the government and academy supporters, about academies being more transparent than local authority schools in their financial disclosures as misleadingly simplistic nonsense.

It is clear that Lewis and Tyler have been influential in – if not dominant over -  this academy trust, including Lewis ultimately having influence over its strategic decision-making. And yet the trust will not reveal how much they have been paid in recent years, or how much work they have done for it, as consultants.

Generally in the academies sector, someone paid say £250,000 a year, at least as a trustee who is also an employee of the organisation, will find their remuneration details revealed in annual accounts. But this case shows how trusts employing members (or, on the same argument, trustees) who own a company into which payments are made, might not have payments paid for their own work revealed.

More widely, academy transparency is far from perfect: even very well-paid individual employees will not have remuneration details disclosed against their name or position unless they happen to be trustees, unlike what happens in local authorities. The Griffin case, then, shows up another loophole in transparency requirements, if the trust is indeed within its rights in not disclosing.

A more general point seems worth making. It is difficult to imagine a similar case to this within local authority maintained schools. This is because, in the LA sector, individuals do not set up organisations, then take up influential positions within them including through gaining effective control of what is a highly centralised system of governance, and then also carry out work necessitating payment by the organisation.

A key question in cases such as this – how much have individuals at the centre of such moves benefited personally – is revealed as not capable of being answered from public disclosures.

The academies structure, as currently formulated, then, continues to appear a recipe for scandal – there is no evidence of that in this case, but what can be highly centralised, undemocratic control structures and lack of disclosure demonstrably invite questions – while academies’ supposed increased transparency over alternative approaches comes through in cases such as this as a bad joke.