School needed bail-out after 'misleading council over finances for years'

Warning notice to Martins Wood Primary School

A 'warning notice' issued to Martins Wood Primary School, Stevenage, last year made a series of accusations about the school's financial conduct - Credit: Charles Thomson

A Stevenage school “misrepresented” its financial position to County Hall for five years while its governors did nothing to intervene, according to documents uncovered by the Comet.

Martins Wood Primary School’s financial position was so precarious in 2021 that it went overdrawn at the bank three times in seven months.

The first time, in March, Hertfordshire County Council had to rescue the school with a £129,000 bail-out.

The next two times – in June and September – the school “failed to notify” the council that it had gone into the red.

In September 2021, a “warning notice” was sent to the school raising concerns about “evidence of significant overspending”.

It is one of several documents now obtained by the Comet under Freedom of Information laws.

It also alleged:

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*The school made “inappropriate staff appointments”.

*Just 63 per cent of teachers were in class at any given time - normally only seen at "generously funded" schools. The industry norm is 78 per cent.

*£59,500 of funds were “not accounted for” in the school's accounts.

*Its finances were so bad that it faced another three years in deficit.

“There is little evidence of the governing body reviewing spending, let alone challenging senior leaders on overspending during the year," the council’s operations director for education Simon Newland wrote in the warning notice.

HCC letter to Martins Wood Primary, Stevenage

The report said grant funding worth £59,500 was 'not accounted for' in the school's end-of-year accounts - Credit: Charles Thomson

School’s Scandals

In February, OFSTED rated Martins Wood "inadequate" over poor leadership, raising particular concerns about safeguarding.

The school, we later revealed, failed to inform Social Services when children repeatedly reported seeing fellow pupils engaged in sexual activity.

OFSTED initially wanted to place Martins Wood in special measures, but could not because it was still providing a good standard of education.

Meanwhile, County Hall had placed the school under investigation over “deficiencies in financial management”.

It used legal powers to seize control of the school’s budget, sack the governors and replace them with an interim board.

Having been rated inadequate, the school is now being forced to become an academy.

A redundancy consultation has been launched for staff.

Martins Wood Primary School, Mildmay Road, Stevenage

Martins Wood Primary School, in Mildmay Road, Stevenage, has been beset by a series of controversies this year - Credit: Google Streetview

Warning Notice

Mr Newland sent the warning notice to governors last September, copying in the headteacher, OFSTED and the Department for Education.

It described "a serious breakdown in the way the school is managed and governed”.

According to Mr Newland, leaders and governors had “an unrealistic understanding” of the school’s financial problems.

“This has led the school to consistently submit a budget that misrepresents the school’s financial position for the last five years,” he wrote.

There was “evidence of consistent under-reporting of proposed expenditure,” he said, and Martins Wood had repeatedly reported ending school years in surplus when it was actually in deficit.

“Senior leaders and the governing body took no action to notify the local authority of the school’s deteriorating financial position,” he wrote.

Warning notice to Martins Wood Primary from HCC

The warning, from Hertfordshire County Council to Martins Wood Primary, said the school had consistently under-reported proposed expenditure and over-inflated its income - Credit: Charles Thomson

Years’ More Debt

The problems were forecast to stretch into the future.

Martins Wood was using income from its pre-school to prop up its main school and was also suspected of extracting profit from out-of-hours provision, against government guidance.

Its 2021/22 budget was “inaccurate” and did not “provide a true and accurate picture”, Mr Newland said.

It had, for example, overestimated how much it would make from nursery and school meals funding.

"The school has over-inflated its income this financial year which if left unchecked will leave the school in considerable deficit at year end,” Mr Newland wrote.

Worse still, he added, a review by an independent advisor had found that Martins Wood’s “inaccurate budget reporting and subsequent overspending... has led to the school facing a deficit position for the next three years.”

County Hall, Herts

The warning was sent from Hertfordshire County Council's operations director for education Simon Newland in September 2021 - Credit: Google Streetview

Response

Martins Wood did not dispute any of the concerns in Mr Newland’s letter, but said “significant changes” had since been made.

It said new leaders and governors had “taken the action needed to bring the school’s budget back into a healthy and financially sustainable position.”

The Ivy Learning Trust did not comment on the documents or planned redundancies, but said it was “excited” to take over Martins Wood.

“We look forward to supporting the school as it progresses from strength to strength,” said CEO Matthew Kleiner-Mann.