£50k minister pay-offs, and 6 more DfE accounts findings

£20m paid out in department staff shake-up, plus high needs deficits leave LAs facing 'financial failure'

£20m paid out in department staff shake-up, plus high needs deficits leave LAs facing 'financial failure'

The Department for Education’s ministerial merry-go-round last year saw £50,000 severance fees paid out to politicians – with some pay-offs four times what they earnt in salary.

The DfE’s annual accounts for 2022-23, published yesterday, also show a staggering £20 million was paid out to civil servants in the voluntary exit staff shake-up. More than 200 pay-offs were between £50,000 and £100,000.

Here’s everything you need to know …

1. £50k severance in ministerial merry-go-round

As FE Week first revealed in November, last year’s ministerial merry-go-round at the department cost a pretty penny in severance fees.

Ministers are entitled to severance pay no matter how long they serve – providing they don’t get another government position within three weeks.

Five secretary of states worked at the DfE across the year, with five minsters of state and six parliamentary under secretaries.

Education secretary Kit Malthouse, who served for just 49 days, got a £16,86 pay off – four times the £4,355 he actually earnt as a salary.

Kelly Tolhurst, schools and children’s minister for 50 days, got £7,920 and schools standards minister for 51 days Jonathan Gullis got £5,593.

Skills minister Andrea Jenkyns, who served 111 days, received a £5,593 pay off.

Michelle Donelan, education secretary for just under two days, waived her severance payment. She was paid £9,048 in salary, but this is likely for her previous role as universities minister.

Meanwhile, DfE directors also got bonuses totalling between £40,000 and £70,000.

Julia Kinniburgh got the largest – between £20,000 to £25,000. She was director general for strategy group but since December has been leading the skills group.

2. £20m in voluntary exit pay-offs

The accounts reveal the full scale of the voluntary exit scheme run by the DfE and its agencies from earlier this year.

This totalled 384 exit packages at a cost of £20.4 million. A staggering 215 of these severance payments were between £50,000 to £100,000 (compared to just three in this category last year).

The department’s turnover remained at 11 per cent this year – which is more than double the five per cent civil servant average. “Most employees leave to transfer to another government department,” accounts stated.

3. £2m college merger write off, £2.8m NFF mistake

The department and its agencies clocked up £39 million in cash losses and abandoned claims in the last financial year. Accounts must show where those individuals losses amount to over £300,000.

An error in “the complex allocation calculation” for the schools national funding formula resulted in an overpayment to a “small number” of local authorities. The largest overpayment was to Surrey County Council which lost the DfE £1.5 million, nearly half the total of the department’s cash losses (£2.8 million). An overpaid grant to Steiner Academies worth £580,000 was also written off.

The largest category for departmental write-offs though was for waived or abandoned claims for funding, totalling £18.6m.

Debts owed to the department by Challenger Multi Academy Trust and Greater Brighton Metropolitan College, worth £2 million each, were waived in re-brokerage deals.

A further £1.2 million linked to the T Level professional development programme, which is run by the Education and Training Foundation, was also written off.

A £400,000 out of court legal settlement is also reported but no further details provided.

4. ‘Financial failure’ likely from high needs deficits

The report sets out six “significant risks” – industrial action, education recovery, school buildings, looked-after children placement market failure, high needs cost pressures and cyber security.

The risk of high needs cost pressures is “critical – very likely”, and the DfE said such pressures were “forecast to continue to increase leading to LAs’ financial failure”.

Despite “substantial cash increases in high needs funding, in the medium term (2-5 years) high needs costs continue to rise significantly”.

This will “threaten the overall financial stability” of councils once rules allowing deficits to sit off balance sheets expire in April 2026 and “undermine efforts to improve educational outcomes for pupils with SEND and improve parental confidence in the SEND and AP system”.

Given the need for “systematic, long-term change to the delivery of support for children with SEND”, the risk is “likely to remain at its current status for the next two years”.

5. ‘Insufficient understanding’ of DfE recovery schemes

The risk to education recovery remains “critical-very likely”, with evidence of “disparities between different groups or pupils with certain characteristics”.

An ongoing risk “therefore remains that recovery is not taking place at the same pace across these groups, potentially maintaining or widening attainment gaps, particularly for disadvantaged pupils”.

The report also warned there “may be insufficient demand for or understanding of education recovery interventions in the sector, causing a lack of engagement on recovery programmes and creating programme underspend”.

6. DfE shielded from energy woes (for now)

The DfE’s energy is bought by the government’s Crown Commercial Service on its behalf.

The report states that CCS “hedging activity” took place before prices started rising last year, “meaning that lower prices were locked in, and the long-term hedging strategy allowed CCS to manage costs during the exceptionally volatile trading conditions seen last summer”.

“By purchasing almost all of 2022-23 energy before the spike, the CCS and the Department was protected from the energy price crisis. It is likely the impact from the energy price crisis will be realised in later financial years.”

7. 1.5k staff data caught up cyber attack

The report noted that two “personal data breaches” were reported to the Information Commissioner’s Office (ICO) over the financial year.

Last July, a DfE supplier was “subjected to a cyber-attack by a malicious third party”. Department data was “included within information encrypted by ransomware”, prompting concerns 1,451 people could be impacted.

A “personal laptop belonging to a member of staff was lost on a train” in the same month.

But “further updates [provided by DfE] confirmed no personal data was held” on the computer itself – which meant “the likelihood of a risk materialising was considered to be unlikely/low”.

Papers showed another supplier “of a number of contracted services to the department” was targeted by a cyber-attack. It is said to be “an ongoing incident”.

“Departmental data was included within information encrypted by ransomware,” the report added.

“Details were not provided of any departmental impact until late April 2023, at which point an initial referral to the ICO was made.”

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