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Lord Bhatia quits Edutrust charity after financial failings

Governance | Lucy Harvey | 18 Mar 2009

Lord Bhatia has been forced to quit the board of his Edutrust Academies Charitable Trust (EACT) after a government inquiry found evidence of financial and governance mismanagement at the charity.

The EACT was established by Bhatia's British Edutrust in order to open and run a number of academies across England - eight of which are due to open in September.

But an inquiry began in November after allegations about irregularities were made by the charity's former chief executive, Ian Comfort, days before his contract ended.

The review, published last week, "highlighted significant concerns over the governance of EACT". It found the EACT had failed to comply with "financial management requirements" and had "inappropriate governance arrangements".

It also revealed EACT had failed to address conflicts of interest, demonstrated poor record-keeping and paid for items not "properly chargeable to it, or which had been excessively charged to it".

In total the Department of Children, School and Families says £70,000 was misspent, most in excess rent paid to the Ethnic Minority Foundation, of which Bhatia is co-founder and chair. The Department says the amount has since been raised again by the new management of the EACT.

New board will develop next series of academies

Ministers have said a new board will take over control of the planned academies and launch a fundraising programme to get sponsorship. Sir Bruce Liddington, the government's former schools commissioner, joined EACT as director general on 1 February and Dr Krishna Sarda, chief executive of the Ethnic Minority Foundation, has taken over as chief executive of the Trust.

Liddington said: "Following the review, we have made necessary adjustments which have given us a clear way forward. I am encouraged by the strong support for our new structures and procedures that we have received from the DCSF. Our overriding priority is the development of the next set of academies."

Bhatia is a Tanzanian-born businessman who came to the UK in 1972. He is involved in an extensive network of charities and was made one of the first people's peers in 2001. He has stepped down as chairman, director and member of EACT. He and BEF will no longer have sponsorship control over the running of the academies, but his charity will still raise funds for the EACT academies.

He said: "I am confident that the new board and management team will take the planned academies forward and I wish them well."

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