A school whose trustees flew to Ibiza for a board meeting has been criticised by the government, which warned it faces a financial black hole.
Langdale Free School, in Warbreck Drive, Bispham, which has 125 pupils, was investigated by the Education and Skills Funding Agency (ESFA) following a tip-off.
But Mark Peters, chairman at Montague Place, which runs the school, has hit back, saying a damaging public report is “full of factual inaccuracies”.
He said: “The board is considering what to do next but we can’t have these lies. It’s a thorough misrepresentation of the facts and we will continue to take advice on what to do next.”
The ESFA’s report claimed:
++ Langdale should have reported the cost of flights to Ibiza, paid for by Montague Place, but did not;
++ The school falsely reported its deficit as £12,000 instead of £238,000;
++ It did not comply with requirements for reporting how its pupil premium funding is spent; and
++ It may have wrongly claimed sports premium funding for activities.
Langdale was a fee-paying independent school run by Montague Place, before it converted into a free school – which is funded by the government but not controlled by the council – in September 2013.
The ESFA opened its investigation last October after a number of allegations were made relating to poor cash management, the use of public funds for overseas meetings, redundancies being made due to high salaries, the misuse of pupil premium and sports premium, and school finances being overseen by “another organisation who are all on the governing body and whose salaries are paid for by the trust”, the report said.
It said findings from the review “confirmed that there are weaknesses in financial management”, governance, and breaches of a handbook given to academies that must be complied with.
But Mr Peters moved to reassure parents. He told The Gazette: “We are actually excellent at financial management at the school. It was never facing a [financial] black hole, it was not, and it will not. The ESFA are simply wrong.
“There will be a surplus this year of between two and four per cent, which is normal.”
The report said the school’s budget forecast return for 2018, which was filed with the ESFA, forecast a cash surplus of £76,000 but said that, following “enquiries with school officers, it was discovered that the [return] was known to be inaccurate as it omitted non-staffing costs from the revenue expenditure”.
It said full year accounts for August last year showed a revised budgeted deficit of £12,000, though the school actually made a deficit of £238,000 for the year ending August 31, 2018, a “significant increase” from a deficit of £62,000 from the year before.
And it said minutes from a board meeting “indicate that the trustees had not been made aware of the deteriorating financial position until after the year end”.
Mr Peters said the ESFA is wrong because the school actually spent £175,000 on buying a nearby building – which will “provide more facilities for the children and allow us to grow into it over time” – and should have been counted as an asset and “not a deficit”.
He said: “It became available and it was an opportunity too good to say no to. It was incredible value for money and we paid for it out of surplus built up over a number of years, which is good financial management. The ESFA themselves approved the purchase.”
The ESFA also said that, even though Montague Place bore the cost of the flights to Ibiza for the board meeting, it should have been reported by Langdale as a related party transaction, breaching regulations which say: “Some transactions may attract public interest and so disclosure provides accountability and transparency to the public.”
Mr Peters denied misusing public money, however, saying the flights cost “less than £900, which is significantly less than what would have been the cost of the directors travelling to and staying in Blackpool for two days”.
He admitted there “were some minor oversights from a reporting respective” after the ESFA said that, while Langdale did document what its pupil premium funding was spent on, it did not comply with guidance on what information should be published online.
He said: “We are a very small school and don’t have a massive management infrastructure.”
But he denied any wrongdoing related to the potential misuse of sports premium funding.
The ESFA said the school may have “potentially used part of” its sports premium “to pay nonfundable activities”, namely “term-time/school-time swimming lessons”.
Guidance said schools “should not use their funding to teach the minimum requirements of the national curriculum – with the exception of top-up swimming lessons after pupils’ completion of core lessons (or, in the case of academies and free schools, to teach [the] existing PE curriculum”.
The report said: “The school should confirm if term-time swimming is part of the free school PE curriculum and if this is the case, funds paid in respect of this activity should be repaid”.
Mr Peters added: “Our understanding is it’s an entirely valid use of funds. We say it was appropriately used and that’s that.”
Five out of seven members of staff at the school went on strike last November to protest against what was described as “unacceptable” pay and conditions there.
The National Education Union said they were being paid “substantially less” than other teachers in Blackpool, and said bosses “consistently refused to recognise the seriousness of teachers’ concerns”, while Chris Webb, the Labour candidate for Blackpool North and Cleveleys, claimed teachers were being paid “up to a staggering 35 per cent less than other local teachers”.
Chairman of the governors Alison Forrest said at the time the school was “committed to ensuring the best possible conditions of employment for its staff and will continue to attempt negotiation with staff to that end”.