More than half of the major operators of the government’s flagship academies program have sounded the alarm bells over school funding, putting additional pressure on Theresa May to ease the cut in public spending.
a Observer An investigation into the Conservatives’ valuable education initiative found that six of the 10 largest academy trusts, which run hundreds of schools across England, have warned of pressure on wages, staffing levels, building maintenance and growing deficits.
The revelation will worry Conservative MPs, many of whom blame pressures on school budgets for the disastrous outcome of the party’s election last year. He comes with the Prime Minister already under intense pressure on NHS funding and facing internal criticism for lack of focus on national issues.
An analysis of the most recent accounts of the major multi-academy trusts reveals that eight of the 13 largest groups have issued warnings. One said funding was failing to keep pace with costs and inflation, creating risks of “unsustainable deficits” and downsizing.
The Kemnal Academies Trust (TKAT), which is based in Kent and operates 41 schools, had core public funding of £ 124million last year but reported a 2016-17 loss of £ 6million of pounds sterling. Eight academies were in the red. “Recent government announcements have indicated that per student funding will remain unchanged in the short to medium term,” he said. “This increases the risk of growing and unsustainable deficits. Careful budget planning will inevitably recommend that fewer staff be employed in academies. This will be necessary to balance budgets when additional income is not available. “
Birmingham-based Ormiston Academies, which operates 33 schools, said the funding increases were far less than an increase in student numbers. Eight Ormiston schools had deficits in 2016-2017. Six funded this from their own reserves, but two had no reserves to draw on and the trust intended to return them to surplus “in the short to medium term.” “Core funding received from [government] grants during the year amounted to £ 134.4million, an increase of 3.8% over the previous year, ”he says. “The total number of students has increased by 16.2%… There is increasing pressure to maintain building standards with limited resources. “
Of the 66 schools run last year by England’s largest chain of academies, the Academies Enterprise Trust, a quarter (17) were in deficit. Of these, 14 saw their deficits increase. “The sector faces uncertainty over the level of future finances,” the accounts indicate. “Financial sustainability reviews are underway at key academies… including staff reviews, future student and income projections, and the effectiveness and efficiency of services purchased. This will accelerate the speed of eradicating these deficits. “
South London-based Oasis Community Learning, which educates 25,000 students in 49 academies, described its current funding situation as “very difficult”, adding: “We remain concerned about the continued pressure on unfunded wage settlements and increases in pension costs “.
The Nottingham-based Greenwood Academies Trust of 32 schools and 16,000 students had a basic government income of £ 96million in 2016-2017 but reported a loss of £ 2.8million. Four of its schools reported deficits for 2016-2017, one of which has since been “rebroker” – meaning it was transferred to another trust by the government.
“There remains significant uncertainty regarding funding allocations for future years,” his accounts state. “The trust seeks to reduce this risk by seeking to maximize the number of students in its academies and to plan its budget over a longer period. However, there is clearly still a significant risk. “
E-ACT, a south London-based chain that operates 25 schools with 15,000 pupils, said: “It is already clear that [future funding] will not be sufficient to cover the known increases in costs and E-ACT therefore prudently bases its future planning on the decline in purchasing power next year.
The David Ross Education Trust, which operates 34 schools and is sponsored by the co-founder of Carphone Warehouse and the Conservative Party donor of the same name, says: “The main financial risks facing the trust are future levels of grant funding. government. His accounts warn: “Financial risks include… uncertainty over the distribution of funds to academies from 2018-19. “
Even London-based Ark Schools, a successful chain operating 35 academies, has concerns. The chain recorded an operating deficit of £ 4.1million for 2016-17. This was five times the corresponding deficit of £ 800,000 in 2015-16. Seven of its 35 academies had deficits in their income reserves.
TKAT said the £ 6million deficit was due to its local government pension commitment, “something beyond the trust’s immediate control and a wider national issue”. Ormiston Academies said it has “resilient financial planning and management systems.” Greenwood Academies Trust said its schools were in a “strong position”.
Ark Schools said its finances were “very strong”, with reserves of over £ 16million. He said his quest to straighten out tough schools had resulted in a “short-term forecast deficit.” E-ACT said that although government funding was uncertain, it had increased education spending by 6.7% as a percentage of total costs. Academies Enterprise Trust said it had undergone a “radical overhaul” over the past year, including a “grand reform program” that had already made improvements.
The Department for Education said: ‘Core funding for schools increases from almost £ 41bn in 2017-18 to £ 43.5bn in 2019-2020, and each school will see its funding increase through the national funding formula this year. All trusts operate under a strict system of financial accountability, including the requirement to publish their audited accounts. The latest reports show that in 2016, University Trusts had a cumulative net surplus of £ 2.2 billion.
“The Education and Skills Funding Agency monitors the financial situation of all academies and takes timely action whenever it identifies issues. “