Academy trust debt soars to £65 million

Academy trust debt soars to £65 million

New figures from the Department for Education (DfE) have revealed the far-reaching impact that Government cuts to school funding have had on academies.

According to the DfE’s latest data, academy trusts falling into debt have managed to build up a total deficit of £65 million – with just over 6 per cent of academy chains affected by a cumulative deficit in 2016/17.

This is up from just 5.5 per cent of chains that were affected during the previous financial year, when the cumulative deficit sat at £50 million.

The new figures also reveal that the proportion of academies in multi-academy trusts (MATs) with a deficit now stands at around 4.3 per cent, indicating that some 300 academies are not caught in this position.

Interestingly, however, the report also found that the vast majority (91.6 per cent) of academy trusts actually have a surplus, while 2.3 per cent have a ‘zero balance’.

Overall, the academy sector has a surplus of £2.4 billion, the report reveals.

Commenting, Mary Bousted, Joint General Secretary of the National Education Union (NEU), said that the rise in the number of academy trusts facing a deficit was a clear sign of the detrimental impact of Government cuts on the sector.

“It is clear that the academies sector and schools as a whole are feeling the effects of an unsustainable funding model,” she said.

“The rise in the number of academy trusts that are in deficit is another sign of the impact of the Government’s cuts to school funding, cuts that will further limit pupils’ educational opportunities.”

She added that earlier in the year, some of the largest academy trusts had warned in their annual accounts of the risks that they faced due to funding pressures and deficits. However, she pointed out that these specific figures did not shed a light on the individual schools within MATs.

Academy trust debt soars to £65 million