Alleged ‘asset-stripping’ by MAT prompts calls for official report

News Article

The Wakefield City Academies Trust (WCAT) is continuing to cause issues for the Department for Education (DfE), following calls to publish an official report into the “struggling” MAT.

WCAT has been accused of asset-stripping, after reports that it transferred millions of pounds of its schools’ reserves to its own centralised accounts before announcing, days into a new school term, that new sponsors would need to be found for them.

The Trust had previously made headlines when, in October 2016, it was revealed that it had paid almost £440,000 to companies owned by Mike Ramsay who was Chief Executive of WCAT at the time.

In October this year, it emerged that a number of schools belonging to WCAT faced losing a significant proportion of their reserves which had been taken from them and put into WCAT’s central account.

Hemsworth Arts and Community Academy, in Wakefield, is facing losses of £436,000, Wakefield City Academy has £800,000 of its funds hanging in the balance and Heath View Primary School, also in Wakefield, stands to lose £300,000.

High Crags Academy Primary School in Shipley was ordered by the DfE to join WCAT in April 2016 after being put into special measures. Upon joining the MAT, its accounts showed a surplus of £178,000, but this was immediately transferred to WCAT central accounts.

Eric Fairchild, Chair of High Crags’ local governing body, has claimed that on at least two occasions his governors had asked WCAT officers if its surpluses were being used to shore up the trust’s accounts but they received assurances that the school’s money was ring-fenced and safe.

Prior to WCAT’s financial struggles, the DfE Funding Agency investigated the trust and, according to a leaked draft of a report the trust was in an “extremely vulnerable position as a result of inadequate governance, leadership and overall financial management”.

There have since been calls to reveal the full findings of the report and a Freedom of Information request made.  The Department for Education has not made public the information, stating that to do so would put in jeopardy the process of placing WCAT’s schools with new trusts and cause disruption for the pupils concerned.

Luke Morgan, a Partner with Palmers, who specialises in debt advice for the education sector, said: “Where cash flow becomes an issue, it is crucial to get advice at an early stage and seeking advice from a legal professional who has experience of both commercial debt recovery and the education sector is particularly important.”

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