PEM News

Benchmark report reveals academies are fighting to stay afloat

According to the seventh Kreston Academies Benchmark report, eight out of ten academies are running at a deficit, as they battle to hold on to their dwindling resources under a deluge of rising costs and increasing scrutiny.

The 2018 report lays bare the limits to the ingenuity of academies to continue operating under the current regime of funding uncertainty, following years of cuts and exhausting negotiations for extra loans, grants, and greater parental contributions.
Cash-strapped and failing single academies are sacrificing their independence to join Multi-Academy Trusts (MATs) as an act of survival, and to benefit from economies of scale. Academies are having to do more with less.
The survey reveals staff costs rising to as much as 80 per cent of the total costs of an academy, even though in many cases all but the most essential staff and teachers have been avulsed from a school, or exchanged for those on lower salaries. Rises in pension costs, National Insurance Contributions, the National Living Wage, the Apprenticeship Levy, and depreciation of the school estate are all cited as key factors contributing to the challenging environment.
And with government projections showing overall pupil numbers rising by another 650,000 by 2026, the report paints a stark picture of crumbling schools, out-of-date technology and an insufficient number of teachers. Those schools which are still reporting a surplus, have seen their figures fall.
​Nearly half of all the academies in the report have shelved maintenance and infrastructure spending, leading the National Audit Office to predict that it will cost a massive £6.7bn to bring all existing school sites up to “satisfactory” condition.
The survey of more than 750 Academy schools responsible for over 420,000 children, conducted by the UK Academies Group of Kreston International - the global network of independent accountancy firms – highlights falling cash and reserve balances, delayed buildings maintenance, and experienced teachers leaving the profession.


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