25/10/2013 Newsnight


An exclusive report into a troubled free school, Britain's growing economy and the paternity of Maria.

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The flagship free school where the numbers don't seem to add up and


where the questions about discipline are directed not at the pupils but


at how the school is run. You have big aspirations here, that's great.


The Prime Minister was a big fan. But we have an exclusive report on


allegations of mismanagement, nepotisim and possible fraud at the


Kings Science Academy. Britain is growing and bouncing back is the


story of the latest figure, why isn't everything plastic fantastic


in Sheffield. The work has picked up, but I think some companies have


to sacrifice how much they are sell it for to how much they make. We


will hear from three chief executives of big British companies.


And the mystery of Maria has been solved, the family of the blonde


Roma girl, who has made the front pages all around the world has been


traced. We hear from Athens. Good evening, all schools can face


problems, but the Government's flagship free schools are under


greater scrutiny, most because their very existence is part of a huge


political debate about the direction of education policy. Tonight


Newsnight can reveal that a whistleblower sounded the alarm


about Kings Science Academy, a free school in Bradford. It has been the


subject of an internal audit which questions where large sums money has


gone amid allegations of nepotisim, misGetah and fraud. A new day begins


at one of Britain's highest profile free schools. This is Kings Science


Academy in Bradford. It is celebrated By a Prime Minister and


his Education Secretary as one of the new free schools. How do you


find having a longer day? A bit tiring, but you don't mind getting


up earlier if you are getting a good education. Like all free schools it


is state funded, but outside Local Education Authority control. The


policy is designed to help communities take charge of their


children's education. But we have discovered that financial management


at Kings Science Academy has been out of control. There have been


allegations of serious mismanagement, nepotisim and even


fraud. The Kings Science Academy was set up by a young dynamic Oxford


graduate, the son of a Bradford bus driver. On paper it was the ideal


project, social mobility and better education. More than two years after


it is open the complaints have come in. And this is the result, an audit


report that contains devastating criticisms of financial management


at the school. The leaked report is a draft internal audit, written by a


body called the Education Funding Agency of, the EFA, it is part of


the Department of Education. Newsnight can reveal a whistleblower


contacted the Government last year with serious concerns about


management and governance at the school. The report alemmings that 86


-- alleges that ?86,000 of lead-in funding was cued for purpose it was


not intended It is unbelievable if true. We are


talking about here fraud on a pretty serious scale. The question of the


appropriateness of qualifications is one thing in terms of what was this


person, the right person, a fit person to run a school. A


publicly-funded school. This is the man at the heart of the story. Sajid


Raza, the principal, who set up Kings Science Academy two years ago.


Kings Science Academy is certainly well connected. Alan Lewis is


described as executive patron and a key begin factor -- Benny factor,


he's a successful business man and Conservative Party vice chairman. We


spoke to a former member of staff about his time at the school. He


feared his career would be damaged if he spoke publicly, so we agreed


to protect his identity. It is the flagship free school. I think it is


fair to say it has huge political backing in the current political


atmosphere, at least. From that point of view it is highly, highly


protected. As a result of that it is hard to hold someone to account if


you have got that much protection. The school opened in 2011, the audit


document says the new building was given public funds of over ?10


million. Alan Lewis gave a helping hand. It is built on land leased


from Mr Lewis's company at a cost of ?296,000 a year for 20 years. About


?6 million. In Bradford there were high hopes for the school. But some


were uneasy. In Bradford word soon got out that the principal was


employing many members of his own family. This document lists them.


His brother was on the governing body, his sister was a senior


teacher at the school, his wife worked there too and his father


drove the school minibus. To outsiders it was beginning to look


like a family business. The EFA report says:


We spoke to the school's former Finance Director, Daud Khan. Did you


ever have any concerns that there were so many family members


associated with this school? At the time, to be honest with you we


thought they had all gone through the interview process and somebody's


interview them. Afterwards we found out that certain people were


recruited without being interviewed. Would you say that is wrong? That is


totally wrong, because we are dealing with public money. Free


schools are accountable to the Education Funding Agency, the EFA.


The EFA visited the school in December 2012 as part of a routine


inspection of its financial management. That visit highlighted


significant witnesses in the academy's governance. The academy


had reported its own financial management as "good", the EFA team


found it was "inadequate. The EFA passed the case to the audit team to


look for accounting irregularities. There was an historical review of


the school's finances. Their work highlighted serious concerns.


Benefactor and Conservative vice chairman, Alan Lewis, told us it was


his recommendation to bring them in. Reading the EFA report, the message


that comes out loud and clear is that there was chaos in terms of


financial control and management of the academy. Is that your experience


when you were there? I think certainly as classroom teach e I


think things had been constantly things had been changed on a daily


basis. It is that level of chaos could be down to just incompetence


based on inexperience. That is one way of viewing it. I think the other


way of viewing it is it is because they were unaware essentially of how


to run the school, it was almost being made up as they go along.


Sajid would do a lot of things behind closed doors, he wouldn't get


me or anybody he else involved. I don't know how much he was telling


the governors, even if he was telling them, the majority were all


their friends any way. They would back him up. The most eye-catching


conclusion though is not all invoices submitted to the Government


for payment could be justified. The report states that the principal, Mr


Raza has admitted some of the invoices submitted to the department


to support the claim for lead-in grant, were fabricated invoices. He


blames Daud Khan for fabricating six invoices from Mr Lewis's company.


Have you seen these invoices? I don't know anything about it. It is


stark reading. In one passage in the document it says "further follow-up


with Mr Raza clarified that all six invoices, supposedly from the Trust


were raised by Daud, you, the former Finance Director so rent could be


claimed from the Department of Education as part of the grant


claim. They are trying to put the blame on you? That is rubbish, I was


recruited for book keeping, banking reconciliation and other tasks. I


was responsible for financial accounting not management. Any


invoices that were passed they were passed on from Razpash, he would be


responsible for opening all the post. David Ward MP sits on the


Education Select Committee, a school governor for 30 years, he has long


been a critic of the free school policy. It sounds, and I I think it


sounds like a complete disaster and a financial nightmare. If this is


true, we must ensure this is made public. Because this is such a


flagship policy for the Government, there is always a suspicion that


anything that is critical of free schools will not be made public and


that is not simply in terms of the academic performance of the school,


but actually the governance, quality and integrity of the governance


procedures as well. We also tried to speak to Conservative vice chairman


Alan Lewis, the former executive patron at the school, his company


spokesman We also asked the principal about


governance, the schools lawyers told us. .


The Department of Education told us there is a plan for the school to


pay back ?76,000 after expenditure couldn't be justified. The


department stress both the EFA and the school had taken action when


problems were revealed. Six months after the report was drafted,


knowing we were about to broadcast for the investigation, the


Department of Education published the report on its website. A


spokesman said. D.. People in Bradford will be left


wondering about the future of their free school. But the Department of


Education says there are more scandals in conventional state


schools. Both the academy and the Department of Education say that


governance and financial management are much improved.


Richard is with me now, what has been going on this week since you


started this investigation? It is the timing that is very curious. We


got hold of this leaked draft report about a week ago, beginning of the


week. By Tuesday we had interviewed our own sources on this, we have put


the allegations to the people being criticised. By Wednesday the


principal of the school was telling me the draft report was only a draft


and it won't be published until January next year. That changed very


quickly indeed, because today, well yesterday, then the Department of


Education said, look, we are going to publish this, but they didn't


want to give a timetable for it, they said several weeks. Today, of


course, they publish it on their website a few hours before we go to


air. I should pension mention one other thing that I think came out of


the Department of Education today, which is actually very interesting.


That is there is a reference in their statement to the fact that


they refer it to the police in April this year but the police chose to


take no further action. We contacted the Department of Education but


nobody was available to come on the programme tonight.


Today's growth figures, the best for three years, were hailed by the


Chancellor, George Osborne, as demonstrating that Britain was on


the path to prosperity. Before the band could strike up a chorus of


Happy Days Are Here Again, George Osborne was reminded that people are


squeezed, energy prices are up way beyond inflation, and inflation has


been significantly higher than wage increases. We're in Sheffield to


find out what 0. 8% growth in the last quarter means in the real


world. Sheffield is a city that still trades on its past, metals and


heavy industry. The decline of the steel works forced the city to


reinvent itself. Now these slabs at ?20,000 each are being used to make


something different, Sheffield plastic.


We were within a month of going under. It was as close as that, we


had already, if you like, made arrangements with banks to say look


we are going to have to pull the plug. At the height of the recession


this company was on the brink, but orders started to come back, four


years later it feels like things are looking up. We're confident that we


have turned the corner, I'm confident that we will move ahead,


we are going to invest in more people and more equipment, we


believe the economy is on the up, the automotive industry, Aerospace


are growing, we don't see why the UK can't take advantage of this growth.


This latest set of GDP figures is starting to paint a picture of what


looks like a solid recovery. All sectors of the economy grew together


in the third quarter. Industrial output was up 0. 5%, helped by a 0.


9% rise in manufacturing. The service sector grew another 0.7 per


cent, constructiontruction is bouncing back helped by an increase


in house building. A quarterly growth of 0. 8% is the highest for


three years. I think Britain's hard work is paying off. We see that in


these economic numbers today. It shows we are on the path to


prosperity. Lots of risks remain, we have to stick with the economic plan


that has got us this far. What the Chancellor is after is some


Dragons Den-style innovation. You are harming the environment by a


bottle you say is here, it is a terrible invention, ludicrous but


I'm out. Ducan Bannatyne might not have liked the idea, but this


factory has now churned out half a million collapsable bottles for its


British inventor, many going for export. To some of the well known


companies we are churning out 10,000 a month each for the big companies


for their customers. It is really good. How much money are you making


on something like this? Not enough. You are not going to tell us are


you? But even after today's positive growth figures the economy is still


two-and-a-half 2. 5% smaller than at its peak in 2008. There are


constraints on the recovery, banks are still reluctant to end, the


fiscal squeeze is still there and real pay is falling. We are seeing


the recovery broaden out and become much stronger. Well today's data


might look good on paper, the reality for most workers here is a


squeeze on wages and the cost of living. Money-wise you do feel, you


don't feel as though it is getting a lot better. In the last couple of


years. Are you starting to feel better off, do you feel that there


is better times ahead or is that still a long way away? They say it


is, but if it is it is all down south, not up north. No I don't


think so. So the economy might be on the mend, growth might be picking


up, the Government's next task is to make these workers feel they are


part of it. I'm joined by three CEOs from three top British companies,


Lisa Thomas of the advertising agency, Saatchi, and Paul Waits and


Paul Dunn from 02. The construction figures were good, what is driving


that, is it just confidence is back or Help To Buy or those kinds of


things? The principal driver of stronger growth in construction in


this quarter, has been the increase in house building, private


residential house building, a little bit of increase in infrastructure,


still a long way to go to get the industry back to where it was five


years ago. Do you worry about it in the south-east, it is in London and


also do you worry about it could be a bubble? I think there is no doubt


that the economy in London and the south-east is considerably stronger


than the rest of the UK. And that there is investment needed to


rebalance the economy to get some stronger growth and employment


opportunities outside the greater London area. That's quite


interesting, that kind of reflects what we heard from Sheffield there.


In terms of advertising, whose who is advertising, where is the growth


coming from there? Not surprisingly in terms of the development of


digital, the growth is coming, there is advertising, but it seems to be


the majority of spend is on digital and a huge increase in mobile as


well. That seems to be up considerably. Do you see any


evidence of overall rebalancing of the economy, the Government made it


quite clear what they wanted was more manufacturing, less on


financial services and more export-driven economy. You sound as


if you are talking about advertising the exact opposite of that? The


service businesses seem to be driving forward, advertising is


growing. I'm not sure where the growth is coming from but it would


suggest it is not from manufacturing, yes. I suppose the


overall point that people are thinking about, it may be good for


the economy, that is great, but is it good for me? What we have seen is


people talking about this crisis of living standards. It is not


filtering through in increased wages? Certainly we're seeing it is


mostly small businesses that are seeing some pig-up now in our


customer base. What we are trying to make sure is by launching our 4 G


services in places like Yorkshire, we are trying to make sure it is a


broader-based economy growth. I think digital skills and the digital


economy will be part of how it seeps through to the general consumer.


That might be the good news in a couple of years time. Just right


now, Grangemouth has been in the news this week, without the ins and


outs of the dispute, a lot of people who look at it there are workers


taking pay cut to keep a job, that reflects how a lot of people feel


about their own jobs? There is huge cost pressure in the economy, trying


to keep a cap on prices is really tough, in our sector we are seeing


prices trop in real terms, but we know that average households are


seeing a lot of their other costs going up in utilities, I think it


will be a while, and I think it is the overall growth in the economy


that will help to see Anne crease in real wages. Do any of you see that


any time soon -- an increase in real wages, do you see that any time


soon? We are faced with global competition, for many of our


products and services and they have to compete on a global stage.


Getting the overall strength in the economy will take some time. The


Chancellor said, we have to stick to the plan, it is incredibly important


that for a lot of these investments that there is cross-party support,


so we have continuous growth in the economy. Not the stop-start we have


had in recent year That is interesting, cross-party support,


that came up in a different aspect there. Both the Prime Minister and


Deputy Prime Minister effectively had a go with Labour and said we


need you not to go wobbly on HS 2, presumably your industry would


benefit greatly if that goes ahead? The vital thing about HS 2 is it is


one of the best investments r getting a rebalanced economy in the


UK, it brings eight to ten cities closer to London. That has to be


good for the economy overall. It won't gain momentum if investors


can't be confident if it will have the support of all parties over the


long-term. Would you put ?50 billion into that if you had ?50 billion as


a Government to spend. Is it that important for the economy? It is key


to invest in the infrastructure to support the economy. We need


transport and communications infrastructure, at the moment there


is a lot of investment going on. Our business alone will invest one


billion a year and our sector ?5 billion. At this important stage in


the economy's recovery we have to commit to long-term investment,


stable policy and stable regulation and then companies will invest on


the back of the Government's investment. Not necessarily HS 2, we


still haven't seen the business case up for it? I think connectivity is


critical. I think the balance of the economy will be supported by the


right sort of transport links and communications links, so we have a


broader economy. I think it is important as was said


to build the connectivity and build the closeness between the north and


south. You talked about the north being left behind, that connectivity


through the country is very important, and investing in


infrastructure is critical for us. The other interesting thing from the


report, you have the businessman being asked, how much are you


making, and not enough. It is not just wages being squeezed but


profits too for the small businesses? Margins across the


economy have been squeezed everywhere, I think what we have to


try to make sure is there is enough money left for the investment. Now,


one other issue which has come up again today, David Cameron has been


in Europe, do you worry as some business people do that the


uncertainty, whatever your views are, how people should vote if there


is a referendum, do you worry about the uncertainty? As the head of a


British business that's owned by a European parent, I think it is


really important for me to make the case for investment in the UK. I


think that case can be made much more strongly when the UK is playing


a leading role inside Europe. What do you think of that, is that


something you worry about or not? It is vital for the success of the UK


in the long-term to be at the centre of a strong and better Europe and


that's a far better forward than being an outsider on the periphery.


Agreed? Definitely. And just one final point, one other question


about Grangemouth, it came up very, very strongly from Ineos themselves


who basically said this is a very difficult market and not place in


which we can compete, we can go somewhere else and make it for less,


it goes back to your question about the global race, David Cameron also


talks about that? The fundamental challenge for the UK in the


long-term is to be internationally competitive, and that means from the


talent and skills that we generate through to the products and services


we manufacture and deliver. We have to compete on a global basis,


investors always have choice as to where they can put their money. Do


we compete in the global basis? There was also a lot of figures


about talent, lack of, educational standards, looking at 24 different


countries, England comes about 2 #st and 22nd in terms of basic


arithmetic skills. It is not great? The Government are behind t they are


investing, the investment in apprentice schemes and in skills and


in equipping the youth to deal with the new digital world has been


impressive. I think we are doing what we can to develop that talent


and I know all of our businesses are investing in young people, bringing


in graduate, training them for the new skills and the new world that we


need. Thank you all very much. Her face has been on newspaper front


pages and the hunt for her real parents has been intense. It led to


some people drawing parallels with the stories of Madeleine McKin and


Ben Needham. The blonde girl detained in Greece is actually the


child of another Roma couple from Romania. What does it tell us about


the Roma and how they are viewed in countries like Greece.


For more than a week her story mystified the world, and appeared to


feed some old prejudices. How come Maria, found under a blanket at a


Roma settlement in central Greece looked nothing like the couple she


lived with. They were charged with anduction and Maria dubbed "the


blonde angel", taken into care. Tot today a Bulgarian Roma couple were


confirmed by DNA tests to be her biological parents, her mother said


exactly what Maria's parents said, she gave up her little girl in


Greece because she couldn't afford to look after her. Her biological


grandmother said the same thing. TRANSLATION: She left the child and


booked tickets home to her other children. It is not clear whether


money was involved, both sides say not. The Greek charity looking after


her had earlier suggested it was not simply a case of altruistic


adoption? It shows that the combined effort of these people to buy and


sell chirp, and when they have a good commodity, they like this one


they are trying to find a better price. Today he was asked in a


Newsnight interview whether he still stood by that. The story is more or


less as the Greek Roma couple said it was, why was all this hysteria


whipped up about abductions, about kidnappings, children as


commodities? This was an illegal act one way or another. What we were


saying then we are saying now. Whatever happened it was an illegal


act. People that are using and manipulating the system, the Greek


system to make false statements, so again, still it is an illegal act.


Don't you think that the remarking you made fed into some existing


stereotypes? No, it is me that made the remarks, it is a problem with


the Europe that the Government don't respect the Romas and they let this


situation of people who are using the Romas for this exploitation.


Some Roma people. And I always say "some" Roma people. I have to be


very specific and I'm very careful. In Ireland this week in apparent


response to events in Greece, there were two separate cases where the


police took a child away from Roma parents because they looked


different. Tests later proved there was nothing amiss. It has been a


week that has reminded us just how marginalised and precarious the


position of Europe's 10 million Roma is. The debate that has been


reignited, largely without their participation, has barely changed in


decades if not centuries. Are the Roma an oppressed minority, victims


of entrenched stereotypes, or a threat to the rest of society.


Responsible at least in part for their own misfortune. Some are


shocked that debate is still taking place at all. In Greece, as across


Europe, any progress towards integrating Roma into society is


being set back by economic austerity and will be set back even further by


the case of Maria. Even though I'm an educated Roma, it


had an impact, a negative impact on me, I was afraid to go outside. It


has shattered the image of the Roma. It was negative, scapegoat, thieves,


things like that. It became worse, because now we have also the blame


that Roma people steal children. This is only case of illegal


adoption. What happened doesn't apply to the rest of our society.


Maria's future now still depends on further investigation of her story.


But whatever the exact facts, attitudes to Roma are so polarised


that many will have already drawn their own conclusions.


Now tomorrow morning's front That's all we have time for, this


weekend we are expecting the biggest storm since 1987. For those of you


dreaming of warmer climb, we leave you with the singer Manuelo Escobar,


here he is in happier times with catchy songs, he is mourned today in


Spain. # VIVA he is spannia


V ivaEspanga.


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