- Date requested: 26 April 2013
- Date published: 30 May 2013
- What steps has the department taken to ensure academy brokers are paying the correct tax?
- How many of them are former civil servants?
- How many academy brokers are there in total, how many are on payroll and how many are off?
- Are they encouraged to sign off payroll contracts to be more ‘flexible’ as a Department of Education spokesperson suggested in response to queries from the Daily Telegraph?
Q1. In accordance with HM Treasury guidance, the department requires all contractors engaged after 23 August 2012, or where existing contracts are renewed and who have been working with the department for longer than 6 months to provide assurances they are paying the correct taxes. A clause in their contract states that the department can terminate contracts with immediate effect by notice in writing if, at any time, the contractor fails to fulfil their obligations relating to payment of taxes.
Brokers have been used throughout the academies programme on similar contractual arrangements since 2004 and the requirement for them to give assurances that they are paying the correct taxes is a new safeguard introduced in July 2012, reflecting the government’s commitment to tackling this issue.
Q2. A small number of brokers – 6 – have worked as civil servants for short periods in their careers. Two of these worked in the department, the rest in other government departments. None of them had been in the civil service for at least 3 years prior to working as brokers. They were contracted following a fair and open, publicly advertised tendering process conducted in full compliance with European Commission procurement rules.
Q3. The department presently contracts with 37 brokers. They are all engaged on fixed-term contracts for the provision of specialist advice on an off-payroll basis.
Q4. The department’s response to the Daily Telegraph enquiry: ‘The department contracts academy brokers on a flexible basis in order to achieve value for money for the taxpayer. It would be far more expensive to employ brokers permanently. This arrangement was the same under the previous government and we have in fact negotiated cheaper rates’ is correct.
The department requires special expertise for the broker role that it cannot find within the civil service. Their expertise needs to be deployed flexibly in different parts of the country. These and other needs are best secured through a contracted service and procurement rules on engaging specialists of this nature require the department to contract off-payroll.
Since May 2010, the department has successfully negotiated cheaper rates with brokers, delivering greater value for money for taxpayers. Brokers have been instrumental in developing 496 sponsored academy solutions since September 2010, improving the education opportunities for thousands of children.