The Charity Commission is set to open a statutory inquiry into Durand Education Trust, a charity connected to a London academy school, which has paid its head teacher almost £400,000 per year since it opened in 2012.
Paula Sussex, chief executive of the Commission, told the Public Accounts Committee that the Commission was aware of the charity and suggested the Commission is likely to open a statutory inquiry into it.
An operational compliance case - a less serious form of investigation - was opened in October last year. However the Commission is likely to upgrade this to a statutory inquiry, which allows it to use information gathering and enforcement powers.
The National Audit Office investigated the organisation last year and uncovered evidence of a “large number of conflicts of interest” involving the school's head, Sir Greg Martin.
Martin appeared before the Public Accounts Committee last week where he admitted that in addition to his £229,000 remuneration package, he was paid £161,000 as the sole director of a leisure centre that operates from the school site.
Margaret Hodge MP, chair of the Committee, said she was “gobsmacked” at the amount, and added “that money should have gone to the students… it’s called doing a public service”.
Concerns have also been raised over a dating agency formerly run by Martin which is registered to the school's address.
A spokeswoman from the Charity Commission said that it is looking at concerns regarding the governance of the charity.
Durand Education Trust, a registered charity, filed its accounts for the past three years on 12 January 2015. They state that because the charity is closely connected with the Durand Academy Trust, which as an academy is an exempt charity, it does not need to register with the Commission.
In 2011 the charity received a donation of almost £17m, which included a property valued at £15m. According to the report, “Prior to its conversion into an academy, Durand Primary School donated its freehold land and buildings to Durand Academy, which in turn, gifted the assets to Durand Education Trust, all at a nil value. The directors of Durand Education Trust have estimated the market value at the date of transfer to be £15m.”
The charity receives a monthly donation from London Horizons Ltd, and one of the charity’s trustees Alan Davies is also a director of London Horizons. Sir Greg Martin, who is also the school’s head, is the director of the academy and controls GMG Education Support, a company which manages London Horizons Ltd.
Over three years the charity received almost £1.7m from London Horizons Ltd. In 2011 this totalled £847,000, in 2012 it was £365,909 and in 2013 it was £486,998.
Durand Education Trust is making monthly payments to Alerley Land Ltd to purchase land that the Durand Academy Trust and the Department for Education can use to build a secondary school on. It plans to finish paying for the land by August 2015.
The academy faces being issued with a financial notice to improve by the Education Funding Agency if it does not improve its governance within two months.
After last week’s hearing Martin issued a statement, defending the school. “As anyone who has taken the time to visit and understand Durand will know, its success is underpinned by the private investment it receives from the supporting enterprise, London Horizons.
“The school has been given no more funding by the Treasury than any other school, but uniquely it has provided for its pupils: subsidised lunches, after-school club at a fraction of the cost of other schools, free swimming, a fully equipped middle school, and a boarding school where children board four nights a week at no cost to parents.”
