Yorkshire schools will not get back millions lost in trust's collapse

Schools in Yorkshire that transferred millions of pounds to a multi-academy trust before it went bust will not get the money back, the area’s schools commissioner has confirmed.

Wakefield City Academies Trust (WCAT), which ran 21 schools, was accused of asset-stripping after it moved its schools’ reserves to centralised accounts before admitting new sponsors would need to be found for them days into the new term in September 2017.

The schools commissioner for Lancashire and West Yorkshire, Vicky Beer, has written to MPs confirming that the trust entered liquidation and was closed on 24 October this year.

“I advised previously that any remaining monies would be determined at the point of closure and that there were still costs to be met including pension liabilities and outstanding invoices,” she wrote.

“These costs have now been met and balances cleared. Unfortunately, this does not leave any remaining funds to distribute amongst the previous WCAT academies and their new trusts.”

Jon Trickett, the Labour candidate and former MP in Hemsworth, wrote in a letter responding to Beer: “This will be extremely distressing news to those many schools formerly part of WCAT that handed over substantial amounts of money to the trust with the expectation they would see it returned or invested to their benefit.”

He pointed out that the accountancy firm Deloitte was paid almost £200,000 of public funds to wind up WCAT. “The cost of educating a child for a year in Hemsworth constituency is approximately £4,674, and Deloitte has received almost 43 times that,” he said. “That’s money to fund 43 children from our area to go to school for a year.”

Trickett added: “Figures like this remind us just how costly the collapse of WCAT has been and the danger of treating schools like businesses and pupils as units of account.”

WCAT was dogged by scandal before its collapse. In October 2016 it emerged that the trust had paid almost £440,000 to IT and clerking companies owned by its then chief executive, Mike Ramsay, and his daughter. The trust said the contracts represented the best value.

In November of that year the TES reported that a draft of a Department for Education (DfE) report on the trust’s finances had raised concerns that Ramsay was paid more than £82,000 for 15 weeks’ work despite the trust facing a large budget deficit.

Hemsworth arts and community academy, a mixed secondary school in Pontefract, was one of the schools to have its money absorbed into the trust that was running it.

The Guardian learned in 2017 that £220,000 raised from Christmas markets and other school events was moved to the trust’s accounts along with £216,000 that had been held back for capital investment.

Trickett has asked the DfE to clarify the total cost of WCAT’s collapse, the estimated cost to each school and whether those losses will be compensated by additional government funding.

He said he wanted to see a detailed explanation of where the money handed over to WCAT by its schools went, given the reports of financial misconduct that surrounded the collapse of the trust.

He also demanded to know what cost-control procedures were put in place in the contracting of Deloitte and whether the deal to wind up WCAT was put out to competitive tender.

“Pupils, parents and teachers deserve to know what went on at WCAT, and answers must not be hidden behind commercial confidentiality,” he said.

“Areas like ours have for years not received the proper educational resources we need, so we treat any further loss of support very seriously.”

A DfE spokesperson said Beer would respond to Trickett’s letter.