£2.5m payments to former college principal ‘concealed’ amid governance failings, investigation finds

A South West college is being investigated by the Department for Education after “historic poor governance structures and practices” enabled the “concealment” of £2.5m in undeclared payments to its former principal.

A report by the FE Commissioner found that Sir Paul Phillips, the former principal of Weston College in Weston-super-Mare, was paid over £2.5m more than was properly declared in its accounts in the years 2017-2023 through a variety of bonuses, benefits, allowances and a “significant” retention payment.

Sir Paul held the title of England’s highest-paid principal while he was in post at the college, which educates around 30,000 students and employs more than 500 staff.

Its latest financial accounts, which were delayed due to the investigation, also reveal that Sir Paul received a total pay package of £1.898m in 2023, including a retention payment of £909,000, which his son as chief operating officer “resisted” paying.

The Department for Education yesterday confirmed the college is currently subject to an ongoing investigation following the findings of the FE Commissioner.

That report found that “there was failure by the board of governors to ensure that the college demonstrated value for money for the public purse and proper accountability for use of public funds, specifically with regard to pay for the senior postholder”.

It added: “The full remuneration package of the previous principal and CEO, as accounting officer, was not fully disclosed in the financial statements, as required by the college accounts direction, nor was it fully declared in the annual finance record”.

It said the full board of governors “did not explicitly ratify the majority of these payments”.

The lack of transparency in reporting was facilitated by a “culture in which there was minimal disclosure of the previous principal’s total remuneration to the full board and by the bypass of normal payroll procedures to make direct payments to the principal,” the report said.

The FE Commissioner said it was clear from the evidence they uncovered that Sir Paul “believed that the full value of his annual remuneration could be withheld from publication”.

FE commissioner Shelagh Legrave placed Weston College in intervention in May 2024, appointing advisor Tim Jackson to chair the board.

The college’s delayed 2023 financial accounts were published alongside its statement about the intervention report, outlining Sir Paul’s restated 2022 and 2023 earnings.

Sir Paul held the title of England’s highest-paid principal while 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. He was also paid a previously undisclosed performance bonus of £395,000 and £13,000 in other salary-related payments.

In 2023, Sir Paul’s basic salary was £349,000. His other salary-related payments rose to £128,000, and he was paid a £370,000 performance bonus and a £909,000 retention payment.

Sir Paul’s retention payment of £909,000 was highlighted in the report.

It said there is evidence in the remuneration committee minutes that Sir Paul’s son Joe, in his capacity between May 2023 until January 2024 as COO, resisted requests to pay the retention sum to the accounting officer and supported the finance team in their refusal to pay it.

Instead, the payment was initially made directly by the governors “under the authority of the remuneration committee”.

The report added “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.”

The report lists 13 recommendations for the college to bring its governance and financial process in check.

Interim chair of governors Tim Jackson said: “The college board of governors are shocked at the size of the remuneration package paid to the retired ex-principal in 2023 and the years prior to that. They 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.

“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.

“Over the past months, the college has worked alongside the FE Commissioner’s Office and other stakeholders to provide a transparent and accurate picture of the events prior to summer 2023. This has been a long process, but the college was able to quickly and effectively address concerns raised within the notice to improve.

“Our focus now is on the robust and rigorous controls and governance, alongside a culture of trust, transparency, accountability and fairness in our decision making.”

Principal and CEO 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.”