An academy trust could lose its funding from the Education Funding Agency (EFA) after concerns over its governance were raised.

The Durand Academy Trust (DAT) has been issued with a pre-termination warning by the EFA, which has also expressed concerns over the trust’s use of public money.

The DAT runs an infant and junior school in Stockwell, south London, as well as a private boarding school in Midhurst, West Sussex. The trust’s schools combined cater to over 1,000 students.

As part of the DAT’s model, it leases land and services from its parent company, the Durand Educational Trust (DET). The EFA, however, argues that this deal is a conflict of interest, with the actions of senior management and board members been called into question.

Sir Greg Martin, who is a former head of a DAT Academy, is on the board of the academy trust. His role includes the management of contracts through London Horizons and GMG, the latter a company that he owns. GMG was paid a percentage of London Horizons’ turnover as part of a deal that helped to take Martin’s basic salary to over £200,000 when he served as head.

After retiring in August of last year, Martin now chairs the trust, but the EFA has threatened to terminate its funding unless he resigns before August. The EFA has also demanded that he never holds a future position on the trust’s staff or board, as well as that no director at the DAT has director status at the DET, London Horizons or GMG.

Current interim Durand Academy head-teacher Martin McLaughlin has officer status at the DAT, the DET and London Horizons on the Companies House register. He has been asked to resign from any position with the DET, London Horizons or any company, of which Martin is a director or holds a share exceeding 5%, or resign as head-teacher and hold no further DET position.

The DAT has also been asked to secure the repayment of £1.8m that it transferred to the DET in the 2013/14 academic year.

This case highlights not only the importance of strong governance within organisations, but also the importance of complying with all relevant legislation and guidelines.

London Registrars services include company governance reviews to assist with organisations’ governance and compliance issues.

July 2016