Pressure on academy budgets in 2015-2016

The DfE has now published the financial data on single academy schools for the year 2015-2016, covering the period to the end of August 2016, almost two years ago now. https://www.gov.uk/government/statistics/income-and-expenditure-in-academies-in-england-2015-to-2016

What is striking is the similarity with the trends in non-academy school finances for 2016-17 highlighted in my post of the 14th December 2017.

In today’s tables, about this select group of academies, all groups of schools spent more than their income in 2015-2016. For the primary academies, this is the first year where median expenditure exceeded income. In the secondary sector, it is the third year running median expenditure has exceeded median income.

In the year ending August 2016, the total revenue expenditure in this group of academies exceeded income by £280m. This represents 1.5% of income, up from 1.0% in 2014 to 2015. However, as the DfE notes, this does not mean that these academies are inevitably in debt, as they may have had reserve funds from which these costs were able to be met. Nevertheless, it is not a trend that can continue for ever as reserves are eventually exhausted.

There is a strong probability that the gap has widened since then as the funding crisis in schools has intensified. If the next pay rise isn’t fully funded, then some schools may well be in real financial difficulties.

As might be expected when budgets come under pressure, these academies spent a great proportion of their income on teaching staff than in the previous year. Although expenditure on teaching staff as a proportion of total expenditure has fallen by 3.2 percentage points since 2011/12 when the data were first collected. However, it rose by 1.2 percentage points in 2015/16 over the previous year.

Supply staff cost these schools 2.3% of their budgets in 2015-16, so even the recent government announcement about driving down the costs of some supply agency activities, while welcome, is hardly going to make a big difference to most schools’ budgets. The fact that 12% of the 4.3% of other expenditure was spent on PFI costs suggests that for some schools this is a real burden and must affect how they can manage their budgets. It would be helpful if the DfE could have shown this table for schools with PFI costs and those without that burden. Some eleven schools are shown in the detailed tables with expenditure of more than £1,000,000 on PFI costs, with one school in the South West paying more than £2,000,000. Not surprisingly, its expenditure on both teaching staff and resources is not at the upper end of the scale.

The data on supply staff costs looks somewhat suspect, since some schools may have filled the same figure in for both supply teaching staff and agency teaching staff columns, generating an overall total that is twice both amounts. This might be the case in some schools, but seems too common not to be worth investigating further. However, the school that spent £1,700,000 on supply staff doesn’t fall into that category of schools.

With the announcement from the Secretary of State at the NGA Conference, we can now expect more of this information, including for multi-academy trusts.

 

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