TOUGH YEAR FOR ACADEMIES

LATEST BENCH-MARKING SURVEY REVEALS CONCERNS

Seven out of ten academies are operating with accounting losses, as budgets are being squeezed and schools seek to find cost savings, according to an independent survey of academies.

In its 2017 release, the sixth Kreston Academies Benchmark report, one of the leading reports on the health of the sector, raises concerns about the future viability of a number of academy schools, as the government seeks to encourage even more schools to become academies.

Furthermore, existing cost-cutting and cash-strapped independent academies are being increasingly forced into arranged-marriages with larger Multi-Academy Trusts (MATs) as an act of preservation and to generate economies of scale, in response to the postcode lottery of government funding.

The report highlights rising staff pension and auto-enrolment costs, increases in National Insurance, the National Living Wage, asset depreciation, and the imminent Apprenticeship Levy as key factors contributing to the tough environment. And with an extra 450,000 pupils expected to be in the system by 2020, the report states that many more academies anticipate running at a deficit. Those schools which are still reporting a surplus, are reporting much lower figures than before.

The survey of more than 600 Academy schools responsible for over 300,000 children, conducted by the UK Academies Group of Kreston International - the global network of independent accountancy firms - highlights cash shortages, buildings maintenance being delayed, and experienced teachers leaving the profession.

The report warns that in the absence of any significant extra government funding, academies may need to reduce teacher numbers, impacting on the quality of education and the scope of subjects being taught.

According to Joe Scaife, Chair of Kreston's Academies Group and a partner at Bishop Fleming, the UK's second largest accountants for Academy schools: "The latest survey reveals staff costs and pupil numbers are not being covered by government funding alone, meaning academies have to look for cost savings on top of those they have already achieved. Academy schools have achieved significant cost savings over previous years but now have limited options on how to deal with the imminent danger: they can dip into their dwindling reserves, further tighten their belts, join a MAT or seek to diversify their income.

Mr. Scaife added: "Whilst it is not all doom and gloom, I do expect to see a continuing trend of fewer, less experienced teachers in place, with academies having to use ageing technology and with buildings that are not being properly maintained. It's a tough picture for academies at the moment."

A copy of the survey is available athttp://bishopfleming.co.uk/benchmark/

END

PHOTOGRAPH: Joe Scaife, Chair of Kreston's Academies Group and a partner at Bishop Fleming

FURTHER INFORMATION:

• Julian Cramp:jcramp@bishopfleming.co.ukor 01392 448800

NOTES TO EDITOR:

The Kreston UK Charities and Education Group is a network of independent accounting and business advisory firms in the UK that share a common interest and specialisation in the charity and education sector.

The Group advises over 1,500 charities across a wide variety of sectors, including over 600 schools, and numerous other education related organisations.

Kreston UK is a brand representing firms based in the UK, Ireland and Isle of Man which are each members of Kreston International, a global network of independent accounting firms. Each member is a separate and independent legal entity and as such has no liability for the acts or omissions of any other member firm. Kreston UK and Kreston International provide no services to clients and have no liability for the acts or omissions of any member firm.