Almost half of multi-academy trusts supporting a problem school

The annual Kreston Academies Benchmark Report published today (30 January 2020) has revealed that nearly half of all multi-academy trusts (44%) have at least one school in their group that is struggling financially.

According to the report, the deficits in these schools are effectively being covered by other schools in the trust or a central trust fund.  

The impact of these ‘problem’ schools appears to be significant as these trusts have on average £51K less left over at the end of the academic year than other trusts – a figure that is equivalent to the cost of funding one additional teacher.  

The data also revealed that larger trusts were more likely to be in this position. Multi-academy trusts (MATs) with eight or more schools were more than twice as likely to be supporting a school that was unable to meet all of its costs independently than MATs with four or fewer schools. 

The survey also examined the adoption of GAG pooling across MATs, a practice being championed by the government where funds are collated from all schools in a trust and distributed centrally according to need. In the report only 10 trusts (5%) indicated that they were GAG pooling, despite it allowing for a more effective distribution of income. 

Leora Cruddas, CEO of the Confederation of School Trusts, said “GAG pooling could help some trusts to provide more targeted support for the schools that need it. But it may not be the solution for all. Care needs to be taken to ensure it is supported by headteachers, governors and other stakeholders across the trust.”  

The report, which is published annually by Kreston International’s academies group, is a financial state of the nation survey of more than 360 trusts representing nearly 1,500 schools. The survey covers the 2018/19 academic year.  

Overall, the report paints an improving financial picture for all trusts, with results across MATs reportedly moving from a £506K deficit in 2016/17 to a surplus of £196K in 2018/19. Over the same period, primary school results have shifted from a shortfall of £159K in 2016/17 to a £12K surplus last year and secondary schools have seen results move from a £253K deficit to a surplus of £13k.  

Darren O’Connor, Partner and Head of Academies at James Cowper Kreston, said: “The report indicates that many schools have been extremely effective in cutting costs and payments such as the government’s ‘little extras’ bonus may have gone some way towards easing the financial squeeze on schools last year. I would suspect that there is little room left to trim back on costs without impacting on individual Trusts’ performance. Over the next few years there is likely to be further pressure to keep staff costs under control, so unfortunately there is likely to be more tough decisions for schools to make.”

Below are some of the other interesting findings from the report: 

• Regionally, variations continue to persist with funding per pupil in a MAT on average around £1,500 higher in a school in the East Midlands (£7,552) than the North East (£6,008).
• Problem schools – MATs supporting a school that’s struggling financially are 23% worse off, and the schools within these MATs are 60% worse off than those in groups without a problem school. 
• Staff costs have remained steady at 72% of total costs.
• MATs continue to grow, with 38% expecting growth of more than one school over the next 12 months. 

Click here to download the full Kreston Academies Benchmark Report.