Revealed: leading free schools chain needs extra cash to survive

An academy chain which runs five free schools posted a deficit of �1.6m in the last academic year and has said its survival depends on the government continuing to provide cash “beyond the normal funding arrangements”, Education Uncovered can reveal.

Chapel Street Community Schools Trust, which operates seven schools including five frees, was given a £750,000 government loan in 2016-17, which its annual accounts say is to be “repaid from future surpluses”. Yet the trust is still keen to bid to open more free schools and take over existing academies.

The disclosures come in accounts which were qualified by the trust’s auditors, with James Royal, Chapel Street’s chief executive, confirming four aspects of “material irregularity, impropriety or funding non-compliance”, including “inadequate reporting and budget monitoring”.

The Christian-linked Chapel Street, based in Morden, south London, was at one stage one of the government’s favourite free schools operators, having opened all five institutions in the period 2012-15. With five frees, it remains joint-third on the list of academy chains with the most free schools.

But its 2016-17 accounts, published with the chain still subject to a “financial notice to improve” from the government, will make disturbing reading for ministers.