Analysis of budget information and survey data by the Confederation of School Trusts has found that, without further financial support, more than half of trusts could be in deficit by 2024/5 with the remainder down to worryingly low reserves.
The sector has been hit by several unexpected costs that have undone months of careful planning by trust boards and executives. Each July trusts are required to submit budget forecast returns to the Department of Education but this year’s returns became out of date within just days thanks to:
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Higher-than-expected, unfunded pay offers for staff. At 5% for teaching staff, this was around two-thirds higher than the 3% indicated by the Government’s submission to the pay review process and is unfunded. For non-teaching school staff, a significant offer of £1,925 represents up to a 10.5% rise for the lowest paid and at least 4% for higher pay grades, when the majority trusts had planned an increase of 3% or less. While pay increases are welcome and necessary for staff to manage during the cost-of-living crisis, they are not being fully funded by Government
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Rapidly increasing energy costs – two-thirds of trusts have energy contracts renewing after the end of the Government’s current Energy Bill Relief Scheme, with no clear indication of how higher bills will be funded in the future
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Rising inflationary costs to deliver already under-funded provision including free school meals, breakfast clubs, and similar activities.
While school trusts strongly support fair pay settlements for staff, the announcement on pay awards and offers came after budgets had already been set. CST’s analysis of budget forecast submissions and responses to a survey covering nearly 1,000 academies, which together educate nearly half a million children, reveal how this inability to plan ahead is hitting trusts. The findings are bleak:
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Over two-thirds of Trusts set budgets using the Department for Education’s evidence to the School Teachers’ Review Body. The resulting pay award was higher than the evidence had suggested and unfunded
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Less than a quarter of trusts have confidence in the Government’s interventions to ease energy costs, with current support due to finish at the end of March 2023
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Trust finance officers have already cut estimated reserves at the end of this academic year by an average of 40% compared to original budgets
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If cost pressures remain the same, over 50% of trusts could be in deficit by 2024/25, and average reserves could fall to 1-1.5%
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Trusts are having to look at options for in-year savings, including reducing the breadth of the curriculum offered, increasing class sizes, closing specialist facilities in special and alternative provision schools, cutting staff training, and pausing building maintenance and capital investment.
Trust leaders are exploring how to maximise income through things like the hire of facilities or reducing costs through re-targeting capital spending on energy saving measures, but these are unlikely to meet the long-term funding gap. There remains significant uncertainty on future energy prices, with current support only promised until the end of March 2023.
Leora Cruddas CBE, Chief Executive of the Confederation of School Trusts, said: "The Government must intervene as a matter of urgency to provide not just the funding to meet rising costs, but also a stable, long-term approach that allows school leaders to plan ahead with certainty.
"We know economic times are tough. School trusts have the talent and expertise to find innovative and cost-effective ways to keep improving education and supporting their local communities, but they cannot do this on shifting foundations. They need Government to help by setting out spending plans that they can rely on, and ensuring state education is properly funded by the state.”
