EXCLUSIVE: Nearly £5m advanced to academy trusts to achieve financial stability
Not additional funding – must be repaid
Academy trusts received £4,734,656.00 of advances in the financial year 2017/18, Freedom of Information (FoI) reveals. This represents 0.03% of the total allocated General Annual Grant (GAG) for that year. It must be repaid, however, via a ‘mutually agreed schedule of repayments’ taken monthly from the academy’s GAG’.
Names of trusts receiving advances not revealed
The names of trusts receiving these advances were withheld. The Education and Skills Funding Agency (ESFA), it was argued, needs to be able to discuss financial issues with academies and help them stabilise their finances. ESFA and academy trusts need ‘a safe space’ in which to negotiate. This outweighed any public interest.
6.1% of academy trusts had a cumulative deficit in academic year 2016/17
Unaudited figures released today show that 6.1% of trusts had a cumulative deficit in academic year 2016/17. 4.3% of academies (300) were in trusts that were in deficit at the end of August 2017. These were more likely to be smaller trusts.
9.1% of non-academies had a cumulative deficit in financial year 2016/17
9.1% of non-academies, aka maintained schools, (1,461) had a cumulative deficit for the 2016-17 financial year.
Newly-converted converter academies keep deficits; sponsored ones don’t
Schools which become converter academies take any deficit with them. When schools become sponsored academies, the opposite is true. Any deficit remains with the local authority. This has led to a suspicion that some schools on the brink of becoming sponsored academies have deliberately run up high deficits which will be left with the LA. The Department for Education (DfE) has said LAs should use their powers to prevent this. But LA powers are limited and may not have time to take effect before the school becomes a sponsored academy.
Transferred academies can have deficits reduced or written off
There are cases where academies transferred from one trust to another have had deficits written off. But deficit reduction is not included in rebrokerage figures. Omitting deficit reduction* hides the true cost of academy transfers.
* Diseconomies of scale, capital costs and statutory redundancies are also omitted