This major survey of academy school trusts in England has found that the number of academies running an in-year deficit has more than doubled in the last three years as schools grapple with rising costs and unpredictable funding.
The survey of academy trusts representing over 2,300 schools in England found that the number of trusts running in-year deficits has jumped from 19% in 2021 to 47% for the financial year ending in 2023.
Although staffing costs have remained fairly controlled across the sector, non-staffing costs have seen a big leap with rises of 16% per pupil, according to the report. Energy costs have contributed significantly to this rise, with average heat and light costs per pupil increasing by a minimum of 49% against the previous year.
If it hadn’t been for a series of government grants, including the Mainstream Schools Additional Grant (MSAG), the Schools Supplementary Grant (SSG) and Energy Efficiency grants, almost all academy trusts in our survey would have made an in-year deficit.
Trusts have been extremely effective in controlling costs but they simply don’t know what additional income streams they will receive from one year to the next. This makes it impossible for them to accurately budget and plan ahead. Typically, trusts have to base their future income on current income streams but this can mean the reality is wildly off the mark. This leads to an unending sense of impending financial doom, with every decision around investment being fraught with risk, so investments are often delayed due to the uncertainty.