The former boss of Lilac Sky authorised payments of hundreds of thousands of pounds to his companies after stepping down by accessing trust bank accounts on his phone, government documents allege.
Schools Week can reveal the bombshell allegations behind a decision to ban Trevor Averre-Beeson from managing schools.
Averre-Beeson founded and was chief executive of the Lilac Sky Schools Trust, which at its height had ten schools. It shut in 2017 following allegations of financial impropriety.
The government has refused to publish its full investigation into what happened, but an “outcome” report last month revealed more than £3 million of trust spending was deemed “contentious, irregular or improper”.
It is one of the biggest academy scandals to date.
Unusually, Averre-Beeson’s prohibition notice also lacked an explanation for the decision.
But Schools Week has been given a detailed summary of the evidence, heard during a tribunal last year, by the Department for Education.
It sets out the full allegations that led to the ban, including that Averre-Beeson:
- Allegedly agreed a five-year, £1 million contract with the trust the day after stepping down as chief executive. The deal was authorised by the new CEO Chris Bowler, Averre-Beeson’s friend and “business partner” that he recommended for the role weeks earlier
- Allegedly accessed trust bank accounts – after supposedly stepping down – to “authorise and make” payments of more than £620,000 to his own companies. He was paid nearly £1,000 a day as a consultant under one contract
- Allegedly used more than £80,000 grant funding meant for his trust to “maintain cash flow” at his private company.
Founder denies wrongdoing
Averre-Beeson denied wrongdoing and said some elements were untrue. He accused the government of “stretching” facts to fit a “false narrative”.
In a statement to Schools Week, he said the government had not published the documents because “they know them to be flawed, libellous, defamatory and without substance”.
Publishing the allegations was “lazy, shoddy journalism which is no more than a defamatory character assassination”.
The documents show the case was referred to the police in 2016. They took no further action. But documents state the police said the decision was “not taken lightly” given the “the wholly unethical nature” of some aspects of the case.
Micon Metcalfe, a school finance expert, said the allegations were “shocking”. They showed “there was no attempt to set up appropriate governance structures or appropriate financial controls” at the trust.
DfE had concerns over ‘financial control’
The documents given to Schools Week include the government and Averre-Beeson’s witness statements.
They formed part of a tribunal after Averre-Beeson appealed his ban. But he dropped the appeal midway through the hearing. Lawyers for the government said this “gives credence” that the ban was “absolutely justified”.
The government first contacted Lilac Sky over “concerns relating to financial control and governance” between late 2014 and March 2015, documents allege.
The trust was sponsored by Averre-Beeson’s school improvement company, Lilac Sky Schools Limited. The company was paid to provide services to the trust.
In April 2015, the government “ordered” the trust to cease transactions with this company and Lilac Sky Outstanding Education Services, also run by Averre-Beeson.
This was to “ensure future compliance” with academy rules, annual accounts for that year stated.
Averre-Beeson resigned as chief executive, chair and a member of the trust “on or around” March 1, 2015. He remained a trustee until May, though he claimed in his evidence this was an administrative delay.
The ‘secret’ five-year, £1m contract
Also on March 1, documents allege he agreed a £1 million, five-year contract to work as a “freelance agent” through a new company called Trevor Averre Beeson Ltd.
The government alleges Beeson did so “in the knowledge” the contract broke rules requiring a formal tender and board approval.
The deal was signed off by Bowler, his “friend and business partner”. Averre-Beeson had recommended that Bowler succeed him as chief executive weeks before. He too has been banned from managing schools.
Responding to these allegations, Averre-Beeson said the contract, which included VAT, amounted to £200,000 a year, and was for services provided by at least three other people.
He added it was the responsibility of the new chief executive to ensure trust procedures were followed.
He also disputed claims that the government contacted the trust over finance concerns before he stepped down, or that it ordered the trust to stop paying his companies.
“The truth was that I took the decision to try and separate the business of the trust from the company [Lilac Sky Schools Ltd] because I recognised that the political approach to academy trusts had changed.”
However, Metcalfe said while “there may be questions about the DfE’s due diligence of academy trust sponsors, the interconnected structure was at odds with all the guidance signposted at the time of incorporation”.
“It was a failure of proper governance and oversight from the start,” she said.
Made ‘£620k of payments to his own firms’ (after stepping down)
Despite the trust supposedly having cut payments to companies run by their founder, documents allege 21 such transactions between May 2015 and mid-2016.
They totalled more than £600,000, with individual payments as high as £250,000, and were described as “funds transfer” or “regular payment”.
This was despite “significant assurances” to the government in April 2015 “around management of conflicts of interest and regularity of use of funds”, documents allege.
Despite stepping down, Averee-Beeson “continued to access trust bank accounts, authorise transactions, and make payments” totalling at least £623,725 to his companies.
He had “no just cause to access or make payments from trust bank accounts, demonstrating a lack of integrity regarding public funds”. Payments were for “his own benefit”.
Under one contract, Averre-Beeson’s day rate was nearly £1,000.
‘Unwise’ to access bank, says ex-leader
In his statement, Averre-Beeson said he “accepted” that “accessing and actioning payments from the trust bank account was unwise”. But he “did not intend to, nor did I in practice, do anything wrong via that access”.
Trust staff “informally approved my continued operation of the account” as they knew he was “completely trustworthy and functioned with integrity”, he said. Some payments “weren’t easy” for the finance director to make.
The trust account was in a “suite of accounts” that included his personal, private and savings accounts.
“It was only the hysteria stirred up by the ESFA investigators that led colleagues to doubt their judgment and mine in this matter,” he alleged.
Documents show that in February 2016, Averre-Beeson emailed the trust’s bank to say “we are being audited” by the government.
“We have realised that I might still be a signatory on the bank accounts whilst I am no longer the chief executive or director.” He asked the bank to “put in process my removal”.
In his statement, Averre-Beeson claimed he had asked on several occasions to be removed before the investigation was “even known about”.
He said it was a “transitional matter which was going to be rectified”, but because an “unknown person” had “decided my success as a school leader was some kind of fakery. Therefore I was dishonest… It is amazing how far decent people will go to discredit an innocent person, when they believe they are right.”
£1.27m paid to his companies
A government investigation into the trust has never been published. But the documents reveal key findings from a financial management and governance review, launched in January 2016.
Its findings “suggest” previous assurances given by the trust over conflicts of interests to the then regional schools commissioner, Dominic Herrington, “were deliberately misleading (in substance)”.
Some issues raised by government also “appeared” not to have been resolved “in any real manner”, the documents state.
An example cited was assurances that transactions with the “commercial arm” of Lilac Sky would end. But the “same transactions continued with a new company” set up by Averre-Beeson in May 2015, it is alleged.
And despite resigning as a trustee, Averre-Beeson “continued to attend board meetings potentially acting as a de facto trustee”.
The review also found “almost” all trust members, directors and senior managers had links to Averre-Beeson’s sponsor company.
At one point, governance roles were held by his wife, daughters, sister, paid consultants at his company and his personal assistant.
‘Significant irregularity’
Documents allege “extremely poor oversight and scrutiny” and “significant irregularity” around related-party transactions.
Some lacked “any formal procurement”, records of decisions and in many cases had “no contract in place”.
A 2015 contract provided “preferential terms” to Averre-Beeson “to the detriment” of the trust, the witness statement alleges.
But Averre-Beeson said in his witness statement the government’s case “casts doubt over the integrity of my family members once again, with no evidence”.
The estimated spend by the trust with Averre-Beeson’s companies in the three years to 2015 was “in the region of £1.27 million”, documents state. This excluded spending on contractors “connected to” Averre-Beeson.
Averre-Beeson was paid “circa £16-£18k per month (plus significant expenses) invoiced through the sponsor on an off-payroll basis” until the government “intervention” in 2015, documents claim.
There was “no formal recruitment” for Bowler as chief executive in 2015, nor Averre-Beeson’s wife Jane Fielding as managing director. Despite a £100,000 salary, the review found “limited evidence of [the] MD role being undertaken”.
Averre-Beeson said the claim about his wife was “a libellous slur” and “pejorative hearsay that is vindictive and without any factual evidential backing”.
She oversaw the trust schools, liaised and advised heads, provided training and coaching, took part in Ofsted reviews and was chair of governors at three schools.
Averre-Beeson did not provide a specific response to the alleged findings from the government review.
‘Improperly retained’ trust cash as private firm ‘cashflow’
Documents also allege Averre-Beeson “improperly retained” more than £80,000 of grant funding paid to one of his companies by East Sussex County Council, but meant for the trust.
He “attempted to legitimise the holding of those funds by inappropriately negotiating staged payments when full payment should have been made with immediate effect”.
In September 2015, Averre-Beeson emailed the trust to ask if the cash could be paid back “over the next 4 months at £20k-ish a month – just to maintain the cash flow?”.
Averre-Beeson said the allegation was “worthy of a social media conspiracy theory”.
He said the repayment schedule was agreed with the trust, and there was no personal advantage.
“It was done for cash flow purposes – which is a normal business practice. The company was employing over 100 people so maintaining the business viability was important.”
‘Lack of probity’
He added that emails quoted as evidence “read very clearly to me as open conversations with the finance manager trying to untangle the links between the company and the trust, which were in the first two years [of the trust] basically run as one organisation”.
Another allegation is he “acted with a lack of probity” over a failure to repay nearly £90,000 that he had “facilitated” to one of his companies, which he had “no reasonable cause to access”.
Averre-Beeson said the payment was mistakenly made by the trust, but, by the time it was communicated to him, the private company was “under a great deal of pressure” and later became insolvent.
The “direct consequence” of the “one-sided, incomplete and unpublished investigation” into the trust was that his three companies closed. Monies that “would have been repaid to the trust couldn’t be and then the secretary of state in this allegation blames me for the destruction that her staff set out on.
“Finding new business became impossible… it is plain that I did not seek personal gain. Indeed the very opposite is true. My personal circumstances were decimated. My work, my marriage, my family, my life.”
Unpaid VAT led to insolvency investigation referral
After resigning, Averre-Beeson also “caused” a VAT-only invoice for £115,046 to be raised by one of his companies to the trust.
“He then accessed a trust bank account without authority and transferred this amount from the trust to his company prior to the authorisation of the invoice,” DfE documents allege.
The witness statement said £23,000 of VAT was owed to HMRC at the point the company was liquidated.
In December 2018, the ESFA made a referral to the insolvency service, stating “concern” that neither the government nor the trust was notified of the winding-up of Lilac Sky Education Limited or listed as creditors.
“We are also interested in any on-going recovery action being contemplated, or sought, in relation to that asset.”
VAT bill ‘went unpaid
Averre-Beeson said VAT repayments were “insisted upon” by HMRC over an error after the private company’s schools joined the trust.
His accountant “negotiated that the company paid HMRC the VAT in instalments, which HMRC agreed to. Those instalments were paid until the last when the company became insolvent.
“I absolutely deny any wrongdoing in this allegation… Again, I did not personally gain in any way whatsoever, particularly as the company became insolvent.
“Of the five allegations, this one feels to be the most wilfully brought or otherwise misunderstood. The facts have been stretched to meet the needs of the embedded false narrative established by the initial ESFA investigators.”
The Insolvency Service said in May 2020 it was “unable to pursue its investigation” as a statutory time limit for company director disqualifications had lapsed.
The overall case was also referred to the police in July 2016. But eight months later, it told the government no further action would be taken.
However, the serious crime directorate of Essex Police said the decision had “not been taken lightly, in view of the wholly unethical nature and relationship between” the trust and Averre-Beeson’s companies, the documents allege.
Averre-Beeson said the government’s case “does not establish any evidence from the police referral that I acted dishonestly or exclusively in my own interest”.
The Insolvency Service said it was “not able to comment on any investigatory activity”.
Gagging clauses, secret deals and ‘managing media risk’
Documents show Averre-Beeson refused to attend an interview as part of the government’s investigation.
This was because officials wanted him to sign a confidentiality agreement in exchange for sight of documents he was to be quizzed on.
Investigators also considered a behind-the-scenes deal.
Averre-Beeson offered to “provide a declaration that he will take no further part in running an academy or an independent school”. In exchange, no ban would be published.
But this was “considered inappropriate”. One reason was that he would not appear on the Disclosure and Barring Service’s banned list.
Prohibition notices are published online, and normally with details of why the person was banned.
However, the notice published for Averre-Beeson simply said the ban was over “inappropriate” conduct.
Tribunal documents show the government published Averre Beeson’s ban in a “streamlined format” to “take into account the need to manage ongoing risks of media exposure”.
DfE breaks promise to publish investigation
The government has long promised to publish the Lilac Sky investigation after enforcement action had been taken.
However, last month it instead published an investigation “outcome” report. Rather than full findings, it ran to just three pages – with little new information.
The DfE said this week that it would not publish the report, but would not say why, nor answer any other detailed questions.
On why the investigation took so long, the documents state the investigations team of about 10 staff were tasked with “other high-profile investigations”. Covid also “influenced the pace”.
