Schools in England are merging into larger academy chains and cutting costs in a bid to manage ‘unsustainable’ deficits, according to an authoritative survey of more than 1,000 academies.
The Kreston Academies Group report found half of schools had an operating deficit last year, with only severe cuts and resource sharing within Multi-Academy Trusts (Mats) preventing the figure from be higher.
The group said that while average academy deficits fell in 2018 compared to 2017, further spending cuts would be much harder to achieve and the uncertainty was caused by higher pension contributions, an increase in the salaries of teachers and school infrastructure in ruins.
“Our customers across England tell us that the ‘easy savings’ have already been made,” said Pam Tuckett, group chairman. “We are seeing reductions in the number of Learning Support Assistants and staff contact rates will be increased to reduce costs. This means teachers spend more time in the classroom, so in theory schools wouldn’t need as many teachers.
“There have been several years of cost cutting and the trusts we work with tell us there are no longer areas where they can save significant costs without impacting the way education is delivered.”
Tuckett said it was “unsustainable” for schools to continue running deficits year after year, as many were doing now. “Eventually the reserves will run out,” she warned.
The report comes days after the government celebrated the news that 50% of pupils in public schools in England were now educated in academies – schools outside the supervision of local authorities which were first set up under the last Labor government but were greatly developed in England under Michael Gove as Education Secretary. .
The survey found that financial pressures were pushing autonomous schools and smaller trusts to seek refuge in large multi-academy trusts, and the average trust had fallen 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 situation of schools in the area maintained, it is likely that more schools and individual academies in financial difficulty will convert to become an academy under a Mat. Fortunately, many Mats take this responsibility seriously and are ready to help.
“The trend towards mergers and re-broking is likely to continue until trusts have reached a size where they can take advantage of the economies of scale of a larger organization,” Tuckett said, introducing 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 wants to find more efficiency. »
Kreston, a network of independent accounting and business consultancy firms in the education sector, compiled its survey of 370 academies in England which run 1,000 schools between them.
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 received, forcing them to dip into their reserves.