Governance failures at Weston College allowed the “concealment” of £2.5 million in undeclared payments to England’s highest-paid former principal Sir Paul Phillips, a damning FE Commissioner investigation has found.
Newly published financial accounts by the college, also published this morning, revealed Phillips was paid an eye-watering total pay package of £1.898 million in 2023, including a “significant” retention payment of £909,000, which his son as chief operating officer “resisted” paying.
A long-awaited intervention report into “funding irregularities” at Weston College published by the FE Commissioner today highlighted failures by the then board of governors to have proper accountability over public funds.
Regular payroll procedures were “bypassed” to make direct payments to the ex-principal, who also provided “partial information” to external auditors and believed full details of his remuneration package could be withheld from disclosure.
It comes after DfE fraud investigators began probing the former college principal’s salary last June, following an FE Week investigation in 2023 questioning a specially created “presidential” role for Phillips upon his upcoming retirement.
Between 2017 and 2023, Phillips was paid £2.5 million more than was officially declared through a combination of bonuses, allowances and benefits, including the £909,000 retention payment. The report said the “majority” of these undeclared payments were not approved by the board of governors.
Weston College remains in intervention amid a separate ongoing DfE investigation into “other aspects” of financial controls at the college.
Principal and CEO of Weston College Pat Jones said: “Staff and the wider college community will understandably be concerned and dismayed about the remuneration package revealed by this investigation, and we recognise those frustrations.”
“We want to reiterate that the focus of the investigations and subsequent financial notice to improve are about past issues dating back to a period concluding in the summer 2023. The financial notice to improve does not relate to our sustainability, to the high quality of education we deliver, or to our general finances, which are in good health.”
The college told FE Week it has not been asked to repay any funding off the back of the FE Commissioner’s findings.
Payments bypassed normal procedures
The FE Commissioner said it was clear from the evidence they uncovered that Phillips “believed that the full value of his annual remuneration could be withheld from publication”.
Investigators found evidence that the college had a “deliberate” policy of maintaining a monthly pensionable salary that was declared in the official accounts.
Phillips then received additional direct payments, which bypassed normal payroll procedures to achieve an undeclared total actual remuneration package.
“This led to a failure of proper governance processes and to poor decision-making around the best use of public funds,” the report said.
The process was a blatant breach of ESFA (now DfE) funding and regulating rules to fully disclose every component of personal payments to the principal and CEO of a college.
The report also revealed there was a small group of trusted governors who made decisions on the previous principal’s pay in the remuneration committee, which were never reported to the full board for approval.
“Some members of the committee expressed surprise at the actual sums of money paid to the previous principal, despite being party to decisions on remuneration of the senior post-holder,” the report noted.
Weston College was awarded the AoC beacon award for excellence in governance in 2022/23.
FE Commissioner Shelagh Legrave placed Weston College in intervention in May 2024, installing advisor Tim Jackson to chair the board. Weston’s long-standing chair, Andrew Leighton-Price, stood aside at that point and resigned from the board.
Jackson said: “[The current governors] believe the remuneration sums at this level are unacceptable and agree with the FE Commissioner intervention report concerning this being a matter of a failure of proper governance processes and poor decision making around the best use of public funds, which we note were made by a past membership of the board of governors.”
He added: “I would like to thank those members of staff, who were brave to raise concerns with regulators in relation to this matter as and when these were discovered and who prioritised the integrity and interests of the college, their colleagues and students.”
Millions raked in by former principal
The college’s delayed 2023 financial accounts were published alongside its statement about the intervention report, outlining Phillips’ restated 2022 and 2023 earnings.
Phillips held the title of England’s highest-paid principal whilst he was in post, from an originally stated remuneration package of £362,000 in 2022.
The accounts now show his basic salary was not £258,000 but £348,000. Alongside this, he was paid a previously undisclosed performance bonus of £395,000 and £13,000 in other salary-related payments.
In 2023, Phillips’ basic salary was £349,000. His other salary-related payments shot up to £128,000, and he was paid a £370,000 performance bonus and a £909,000 retention payment.
Including other benefits and pension contributions, Phillips took home £1.898 million in total in 2023.
Additionally, the FEC report outlined three years of unused holiday allocation payments made to Phillips, despite “his contract of employment specifically did not allow for such payments”, as well as £15,000 in annual car allowance which was not fully used each year.
Phillips’ £369,000 bonus in 2023 included £105,000 for “historic annual unused elements” of this car allowance.
Finance team refused to pay six-figure retention package
Phillips’ retention payment of £909,000 appeared to cause some contention amongst staff, investigators also revealed.
The report said the board of governors signed a retention agreement in 2011, which allows for an “annual accrual” of retention value for Phillips to keep him in post. Phillips served as principal of Weston College for 22 years.
The payment was calculated by multiplying total annual salary package by 10 per cent and by number of years’ service and various other unspecified conditions.
In November 2022, Phillips was paid the £909,000 as a severance payment, including a £190,000 pension adjustment and £30,000 as a tax-free element.
“The reasons that the combined payment for retention payment and pension adjustment was made as a severance payment are unclear. The payment was made whilst the principal was still the accounting officer for the college,” the report said.
The report added that Phillips’ son Joe, the chief operating officer (COO), resisted paying the retention payment to his father in his capacity as chief operating officer, according to evidence investigators found in the remuneration committee minutes.
The finance team also refused to make the payment, and Joe Phillips supported his team in their refusal.
Instead, the payment was initially made directly by the governors “under the authority of the remuneration committee”.
On at least one occasion, the previous clerk to the board processed additional payments outside Phillips’ monthly salary “under the authority of the remuneration committee” because the finance team refused to do it.
Joe Phillips was appointed COO of the college from May 2023 until January 2024. His promotion at the time to lead the college’s finances sparked concerns of poor governance and conflicts of interest.
The FEC report stated: “There is no specific disclosure of this close family relationship in the financial statements, nor is it set out in the annual regularity self-assessment questionnaire.”
A spokesperson from the Department for Education said: “Weston College is currently subject to an ongoing investigation by the Department for Education. As this is an active matter, we are unable to provide further comment at this time.”
Improvement orders
Today’s report, dated June 2024 but only published today, lists 13 recommendations for the college to bring its governance and financial process in check.
Decisions on senior staff remuneration must now be set out in a formal scheme of delegation and terms of reference must be updated so senior pay can only be approved by the full board.
Non-confidential board minutes have to be published in a “timely fashion”, and the college must ensure all salary payments follow standard payroll processing with “no exceptions”.
Interim chair of governors Tim Jackson, who was appointed by the FEC, said the board approved “significant” changes in July 2024 to strengthen governance.
These include the appointed of a governance professional who does not report to the CEO/Principal, a review of the terms of office for all governors, and more “robust” reporting procedures.
The FEC also recommended the college undergo a skills audit of the current board of governors, review the governor induction process and always have a qualified accountant on the audit committee.
‘Loyal servant’
Phillips did not respond to requests for comment from FE Week.
However, in a statement to BBC News he said the undeclared payments were “contractually due” to him and blamed governors for failing to manage funding correctly.
Phillips disagreed with the five year period alleged in the report, arguing that some of the payments related to a “recompense for pension errors and a retention package” for his 22 years at the college, due only after he retired.
“During my extensive tenure at the college, approaches from other organisations occurred and therefore the college introduced a retention scheme to retain me”, he added.
He claimed governors had refused to pay him the £909,000 retention payment on an annual basis.
He said the pension error correction was “insisted upon” by college auditors, and he was under the impression legal advice had been obtained.
He added: “All of this information was provided to the FE commissioner and it is regrettable their report was not corrected prior to publication.
“As the FE commissioner’s report clearly states, this is a ‘governance issue’ of which I played no part in other than being a loyal servant to the college for over 20 years.”
I do hope that all those sycophants who existed over the years, beating down on hard working colleagues to please an autocratic regime that had only itself in mind feel this deeply – you know who you are….. We all do! Some of us knew about this cover up for years – since 2018/19 when it was planned, and have waited for justice and transparency. That institution was the cause of more tears, anxiety, depression, fear and corruption than anyone will ever know. This is affirmation that those poor suffering souls can finally realise that the problem was never them, despite being made to feel worthless and exhausted, and may finally get some peace
I don’t think this would have been possible in the days of the FEFC when governance was inspected by specialist inspectors and an accountant examined everything to do with the financial side. It was thorough. The fact remains that money was diverted from the funding of teaching and learning and the support of disadvantaged learners.
Worth adding that he received a knighthood for services to education in June 2022.
Which raises many questions…
(and his resemblance to Senator Palpatine hasn’t gone unnoticed)
“I know all these principals personally and they all care passionately about learners”
I wonder if Mr Hughes regrets those words he wrote in haste circa 2017/18… and where is the AoC condemnation of this? You don’t have to be Pythagoras to work out why DfE won’t up funding for colleges when the indefensible is defended, or silence in the face of this.
FE has had its fair share of wrong doings since incorporation with Derby College Willmorton as the starter for 10 but this must be the most calculated breach of governance protocols. It was it seems an attempt to avoid proper decision making. Therefore the recipient of these payments doesn’t repay then the Governors and Clerks involved should I suggest
Surely this should be referred to the police to be investigated as potential fraud ? It’s outrageous and so damaging to the reputation of Further Education and the many dedicated and committed leaders who work in the sector.
Obvious and intentional criminality and serious fraud. Of course this needs police investigation and when found guilty, funds repaid. Reputational damage alone is worthless at this level of personal greed, and an example made that students must come first in the FE Sector. Don’t you agree, AoC?
Surely this is criminal and fraud?
Is there going to be any compensation for the thousands of students who could have benefitted from this obscene amount of stolen money?
What about the hundreds of former staff who suffered professionally and personally as a result of this poor leadership?
I’m one of the hundreds of ex staff who worked through this sycophants reign, and have since been forced to leave the college through sheer burnout. Working two or three people’s jobs, 60 or 70 hours a week to see this man and his leadership team disappear for college funded nights out to the theatre, dinners in Usk, and even foreign trips and finally sent the just giving link for his retirement holiday.
This level of deceit is appalling, but not surprising to those of us who were there. That should say it all. In this same academic year, my department was unable to replace resigning teachers, or purchase “excessive supplies” for learner trips/experiences due to lack of funds. It’s also the year he told us all that 3% or nothing was the offer to the unions, and we should all be grateful for it. Many of us won’t feel justice has been done here until this is criminally investigated.
What a shocking breach of trust in public office and a level of criminality that surely should not go unpunished – removal of knighthood and repayment of funds at the very least. Rumours of the Principal’s lack of morals have circulated for years, yet still he received praise and plaudits by those who should have listened more closely to the dissenting voices. As the only college in North Somerset it seems he was able to operate without competition or, scrutiny, convincing Governors and local councillors he had their community’s best interests at heart. He has cheated Weston’s learners out of essential funding and learning opportunities, and stolen taxes we have all paid. My thoughts are with those honest, trustworthy and hard working staff employed by the College who through no fault of their own must feel tainted and sickened by the legacy he has left. This is a very sad day for FE.
Having ‘taken the money and run’, the only correct action is to remove his knighthood, as that will at least be a hit to the immense ego of the man. You also have to wonder what the incentives were for the Governors, to go along with Paul’s demands?
This is obviously another example of a CEO of a public sector organisation who deludes themselves into believing they are running a commercial business and that they can act as they see fit! The “I should be paid and treated the same as any business of this size mentality” ! This thinking is not confined to a small number of rogue operators or just the FE Sector. Headline grabbing £m+ figures rarely get reported. This is ironic given that most if not all public sector CEO’s including FE principals, retire from their roles well before the state retirement age as millionaires. Their final salary pension pots accumulate to eye watering sums thanks to massive employer contributions of 25-30% of their salaries each year, all paid for by taxpayers. Such individuals would struggle to last a minute in the actual commercial sector !
I am appalled by this. This needs to be reported as Fraud and the money repaid and a jail term. No one should be allowed to get away with this level of abuse to the financial systems and segregation of duties. Who is holding the governors to account regardless of they are no longer on the Board. They have a responsibility too. This principals activities should be headline news in the national media. As a Governor your role is to ask and probe, you don’t have to be an Acct to understand the figures and ask for evidence to support income and expenditure, and if these transactions are off record then it is deliberate, fraud.
If this has been going on for years ( he had been principal for 22 years! , so who knows how long), why has it not been challenged before?
This morning I wrote to the Forfeiture Committee of the Honours System of the UK requesting immediate consideration of the Knighthood.
The Forfeiture Committee rules state that the Committee will “… automatically consider cases where an individual: has been censured or struck off by the relevant regulatory authority or professional body, for actions or failures to act, especially which are directly relevant to the granting of the honour;”
Watch this space.
It’s ironic that next to this article is an advert promoting how to deal with crisis communication! The picture painted in this article is appalling – summed up by the report citing that the “majority” of the undeclared payments had not been approved by the governors. Some people would call that stealing. Some people would call that malfeasance in public office. Because this is public money. And the whole concept of a “retention” package of almost one million pounds is totally crazy. Surely those undeclared and non approved payments should be returned. The (silent) AoC likes to say that colleges are at the heart of their communities – but in this case, it is, some people might say, greed and criminal behaviour at the heart of the college. While acquiring all this money in such a clandestine way, was there any thought of the learners, the disadvantaged, or enriching the prospects of others.
One of my colleagues at the college where I work now was on the Leadership team at Weston during Sir Paul’s reign. The person jokes that when he received his knighthood at the ceremony in Windsor castle and was told: ‘Arise Sir Paul’, the reply should have been : ‘No rise needed as the governing body will sort it out’.
I think the rot goes so much further and this might be just the tip of the iceberg. As the board of governors and finance department (and COO Joe for that matter) refused these payments and reportedly the decision was made by the remuneration panel (3 members) it would make sense to start there. Who are they?
Looking at the college’s accounts for YE July 2020 both signed by the principle and CEO and one of the members of the Governers Board Andrew Leighton Price is it sheer coincidence that both were the directors of nearing 18 companies/subsidiaries under the parent company Weston College. Forward Futures. Somax etc. Companies House records throw up many questions that should be explored.
Perhaps including gift aid donations made by some subsidiaries year ended 2020 amounting to hundred of thousands of pounds (<700k).
Is it a case of ‘robbing Peter to pay Paul’?
Both PLP and ALP have recently resigned as directors (well timed when the **** hit the fan) and another Weston College connection installed as a director of all companies. The college might still, inadvertently, attached to any wrongdoings by association.
There is certainly something bigger going on in my opinion.
Sir Paul gets a gong for services to further education. You really couldn’t make it up.
Now he’s lined his own pocket at our ( taxpayers ) expense and transgressed professionally ( and possibly criminally ) but got caught in the act are we going to see any real accountability and punishment ?
He should be flagged up for extreme hubris and greed , forced to pay pay back ill – gotten gains and given an appropriate sentence.
You have love a bit of grandstanding by the ‘hard done by’ lecturers who get the summer off. If the financial deal was agreed by the governors – and he received it as a total payment as part of his leaving – is that wrong? If this was documented by governors, is that wrong?.
Put aside the use of funding – did he actually break any rules?