Why didn’t the National Fraud Intelligence Bureau refer the case of Kings Science Academy to West Yorkshire police?
It’s rare that a Westminster Hall debate makes waves within the Westminster bubble let alone outside it, but Tuesday’s debate on the oversight of free schools should prove to be an exception.
Shadow schools minister Kevin Brennan emphatically showed that questions over the alleged fraud at Kings Science Academy and the Department for Education’s role in reporting it to the police have not been properly answered, either by Gove or his department.
Last month it emerged that the King’s Science Academy, a free school in Bradford, had ‘misused’ over £86,000 of its set-up grant. This misuse included spending on staff parties and meals, teachers’ rent and furniture, and paying the chair of governors £800 per meeting. The school then fabricated rent invoices for more than £10,000.
Things got murkier still when it emerged that the Department for Education (DfE) had known about this ‘financial mismanagement’ since April and had only released its internally-commissioned report late last month because a copy was leaked to Newsnight. Many then asked the obvious question – did the DfE report this to the police, as recommended by its own report?
Yes, said the DfE – on 25 April they had ‘informed the police who decided no further action was necessary’. But West Yorkshire police responded to this statement by saying that they had no record of the case being referred to them. It then emerged that, in line with protocol, the DfE had not referred the matter to West Yorkshire police but to Action Fraud. Action Fraud is a fraud and internet crime reporting centre run by the National Fraud Authority.
According to the Action Fraud website, when someone reports suspected fraud via the telephone or online reporting system, Action Fraud staff will refer the case to the National Fraud Intelligence Bureau as well as giving the informant a police crime reference number. If the Bureau then decides that the case should lead to a criminal investigation, the relevant local police authority will be informed.
So why didn’t the National Fraud Intelligence Bureau refer the case to West Yorkshire police? After all, it’s hard to think of a more obvious case of fraud than fabricated invoices (under the Fraud Act 2006, someone commits fraud by false representation when they dishonestly making a false representation with the intent to make a gain).
According to the DfE, the case was not pursued as a criminal investigation because of an administrative error by Action Fraud. As children’s minister Edward Timpson set out in a written answer on 11 November , ‘Action Fraud has apologised to the department for an administrative error on their part, which saw the case filed as an information report rather than a crime report.’
The matter has now finally been referred to West Yorkshire police who have brought three men in for questioning.
An administrative error. It’s certainly possible. But yesterday Kevin Brennan set out very clearly why that in itself is an unsatisfactory answer and why much more information is required from Michael Gove.
First, Brennan asked about the information given to Action Fraud in that phone call on 25 April. Did the DfE disclose all the available information about the suspected fraud? And what exactly was said? In particular, was anything said that might have led Action Fraud to believe that this was a report of information rather than a report of a suspected crime?
Brennan revealed that he had personally called Action Fraud the previous night and that calls to the hotline were recorded. This, he said, meant that ‘the minister should be able to obtain from the Home Office a recording of the telephone call…to Action Fraud in April to report the crime…We will be interested to hear that.’
Second, Brennan asked for the police crime reference number given to the DfE after it made its phone call on 25 April. It would be strange if the government didn’t have such a number (although having the number wouldn’t show that it had unambiguously reported the incident as a potential crime – it may be that every caller is given this number).
Brennan’s third point relates to the only other known contact made between the DfE and Action Fraud before the report was leaked. On 5 September, the department asked for an update on the case. As Edward Timpson said in another written answer, ‘the department contacted Action Fraud on 5 September and, in response, Action Fraud stated that the National Fraud Intelligence Bureau had assessed the case but determined that there was not enough information to progress the case further.’
This sounds like more than an administrative error, if it is correct that the National Fraud Intelligence Bureau assessed the information given and decided that it couldn’t progress the case. As Brennan asked, ‘how did Action Fraud obtain an update from the National Fraud Intelligence Bureau without the administrative error coming to light?’
We need to know more about who assesses whether a report should result in an investigation or simply be filed as information – Action Fraud or the National Fraud Intelligence Bureau?
Finally, when the DfE was told by Action Fraud in September that there was not enough information to progress the case, did ministers ensure that all the information relating to the alleged fraud had been given to Action Fraud? And did they check that that information had made its way to the National Fraud Intelligence Bureau?
That would be the obvious thing to check if, like the DfE, you were responsible for the oversight of free schools and you knew that there were very good reasons to suspect money allocated to a school has been spent fraudulently.
But as Brennan highlighted, Gove and his department cannot be reliable overseers of free schools when the education secretary is also a ‘propagandist for his free schools experimental policy’. This conflict of interest is why Gove (and not some junior minister) must answer these questions.
It is of course possible that the delay in investigating Kings Science Academy is entirely the fault of various fraud agencies, but at the moment that is far from clear.
What’s more, the DfE does not have an impeccable history when it comes to honesty – Gove has recently been caught retrospectively amending transcripts of his speeches online, for example.
Add to this the fact that the Kings Science Academy rents land from Alan Lewis, vice chairman of the Conservative Party, who is a patron of the school and stands to make almost £6m from the lease, and it becomes painfully clear that the onus is on Gove to show that his department acted appropriately in relation to this alleged crime.
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