November 23, 2021

Academy schools grapple with “unsustainable” deficits | Academies

Schools in England are merging into larger academy chains and cutting costs in an attempt to manage “unsustainable” deficits, according to an authoritative survey of more than 1,000 academies.

The Kreston Academies Group report found that half of the schools had an operating deficit last year, with only severe cuts and the sharing of resources within multi-academy trusts (Mats) preventing the figure from falling. be higher.

The group said that although the average academies’ deficits declined in 2018 compared to 2017, further spending cuts would be much more difficult to achieve, and the uncertainty was caused by higher pension contributions, an increase in teacher salaries and the collapse of school infrastructure.

“Our customers across England tell us the ‘easy savings’ have already been realized,” said Pam Tuckett, group president. “We are seeing a reduction in the number of learning support assistants and staff contact ratios will be increased to reduce costs. This means that teachers spend more time in the classroom, so in theory schools wouldn’t need that many teachers.

“There have been several years of cost reduction and the trusts we work with tell us there are no more areas where they can save significant costs without affecting the way education is delivered. “

Tuckett said it was “unsustainable” for schools to continue to run deficits year after year, as many are doing now. “The reserves will eventually run out,” she warned.

The report comes days after the government celebrated the news that 50% of students in public schools in England were now enrolled in academies – schools outside the oversight of local authorities that were first established under the last Labor government but were significantly developed in England under Michael Gove as secretary for education. .

The survey found that financial pressures were pushing stand-alone schools and small trusts to seek refuge in larger multi-academy trusts, and the average trust had dropped from 3.5 schools per trust two years ago to 5. , 6 schools now.

Tuckett predicted that the trend towards consolidation into larger trusts would continue as long as financial pressures persisted. “With the weak financial position of schools in the maintained area, it is likely that more isolated schools and academies that fail financially will convert to become an academy as part of a Mat. Fortunately, many Mats take this responsibility seriously and are ready to help.

“The trend towards mergers and recourtage is likely to continue until trusts have grown to a size that allows them to take advantage of the economies of scale of a larger organization,” Tuckett said in presenting the report.

“We continue to see a change in the way a multi-academy trust is run, with some now operating on a much more commercial basis. Although it may seem uncomfortable, it is a necessity if one is to find more efficiency. “

Kreston, a network of independent accountancy and business consulting firms in the education sector, compiled its survey of 370 academies in England which together operate 1,000 schools.

The findings match a report released by the Education Policy Institute earlier this year, which estimated that half of all secondary academies and 60% of maintained secondary schools – those overseen by local authorities – were spending more than they did. did not receive, forcing them to draw on their reserves.

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