Directors behind 'Eton of the state sector' Durand Academy boarding school for inner city pupils could face prosecution over accounts

Overview of site of planned Durand Academy on former St Cuthmans School site near Midhurst, West Sussex (David McHugh )

The directors of the company behind a proposal to set up a state boarding school in the heart of the Sussex countryside have been warned they could face prosecution for failing to file their annual accounts.

The warning was given to the Durand Education Trust by Companies House. The move follows controversy over the proposal to establish what has been dubbed as “the state school Eton” – a boarding school in Stedham, west Sussex, for inner city pupils from Stockwell in south London.

The scheme has the enthusiastic support of Education Secretary Michael Gove, who believes it will offer pupils the chance to take advantage of a countryside learning environment. The Department for Education is backing it to the tune of £17.3m. However, it has been dogged by controversy, with local villagers citing an independent financial analysis claiming it could cost double the £22m estimated when it won approval.

The rest of the money is to be found by the Durand Education Trust, set up by the Durand Academy, an existing primary school in Stockwell whose pupils will transfer to the new boarding school. The trust earns income from a health club, swimming pool and residential property near the site.

Villagers seeking to scrutinise the Trust’s accounts, which should have been filed by 31 May, were told in a letter from Companies House seen by The Independent: “Currently Companies House are pursuing the company for the outstanding accounts and the directors have been advised about the possibility of prosecution and penalties.”

A spokeswoman for Companies House said a letter had been sent to the directors on 20 July – normal practice in the case of annual accounts not being filed – giving them 28 days in which to file. Normally, three letters are sent to companies before proceedings that could lead to the company being struck off the register are considered.

The spokeswoman said the case was being “actively pursued”, as the deadline in the July letter had passed and nothing had yet been filed. A decision about what further action will be taken could be made next week. A spokeswoman for the Durand Education Trust said there had been a “slight delay” with the accounts, but added that they had been audited and would be sent to Companies House “within the next weeks”.

Earlier this year, Mr Gove’s department was censured by the public spending watchdog over the plans. Amyas Morse, head of the National Audit Office (NAO), said the proposal lacked “sufficiently robust estimates of the financial risk of the project”.

A summary of the NAO’s investigation sent by Mr Morse to Chris Wormald, the Permanent Secretary at the DfE, said: “At the point which it decided to confirm funding [for the project], the department lacked sufficient appreciation of the scale of financial and operating risk associated.”

The firm underestimated the cost of providing a boarding school education for the pupils. It is estimated at £1,100 per pupil by Durand, but Melvyn Roffe, the former chairman of the state Boarding Schools Association, said the figure was “ludicrous”.

Sir Greg Martin, the head of Durand Academy, said the costings were accurate and that pupils would only need boarding provision for four and a half days a week as they would be going home on Friday afternoons.