Just days after fourth UTC announces closure, another is told to sort out its finances
Just five days ago, Schools Week reported that a fourth undersubscribed University Technical College, UTC Lancashire, is to close just two years after it opened its doors. Now we discover that Daventry UTC has been told to get a grip on its finances.
The Education Funding Agency sent a Financial Notice to Improve (FNI) to Daventry UTC Academy Trust on 14 April 2016 although the letter wasn’t made public until last Friday, 6 May. Obviously a good day to bury bad news: the publication clashed with local election results and Nicky Morgan’s apparent about-turn on enforced mass academization.
The UTC Trust was censured for not balancing its budget and having to ask for additional money from the EFA to meet current liabilities. The EFA told the Trust it must:
1 Send a ‘robust deficit recovery plan’ with a ‘balanced budget based on realistic pupil numbers’ by Friday 13 May.
2 Submit an action plan which ensures the Trust complies with the Academies Financial Handbook by 10 June.
3 Outline plans which would ensure the UTC could attract enough pupils to make it financially viable.
The EFA reminded the Trust it must submit audited annual accounts on time and with no adverse qualifications while the FNI was in force. The Trust was also told it had to contact the EFA ‘at an early stage’ if it thought it couldn’t keep up with the schedule outlined in its recovery plan.
The Trust’s annual accounts* for year ending 31 August 2015 show the Trust was ‘overfunded’ by £604,686. The projected deficit was £471,622. Projected ‘overdrawn cash’ at the time was £159,458. The trustees considered the EFA would provide ‘further advances’ but admitted the ‘material uncertainty may cast significant doubt’ on the ability of the UTC to continue.
Millions of pounds have already been wasted on UTCs which have opened and then closed after failing to attract sufficient pupils while existing schools, sixth form and further education colleges face increasing financial constraints.
Such profligacy increases the feeling that the Department for Education, gung-ho about opening more UTCs, seemingly unconcerned about setting up free schools where there are already surplus places and fully committed to mass academization, really are competent to handle billions of pounds of taxpayers’ money.
*Available from Companies House website.
UPDATE 15.50. Schools Week reports the EFA has bailed out academy trusts to the tune of £8m. In 2014/15, nine sponsored academies, three converter academies, two UTCs and one free school benefitted from extra funding totalling £4.6m to balance their books. £0.7m of this is not repayable.
Nicky Morgan plans to forcibly convert all schools in local authorities which 'can no longer viably support its remaining schools because too many schools have already become academies. But it appears academy trusts in deficit can receive loans, even grants, to tide them over. Any chance of her deciding to fund LAs sufficiently so they could support schools wishing to remain under the stewardship of LAs rather than risk losing autonomy by joining a multi-academy trust? That's about as likely as Morgan being chosen to be the next James Bond.