CST’s policy position on funding pressures as of September 2022, including action taken over the summer and longer-term work.
Teachers’ Pay Award
On 20th July following the government’s response to the STRB, we undertook a snap survey of members - 90% of Trusts that responded said the teachers’ pay award is not affordable from within existing budgets. We conducted urgent meetings with the DfE, and I spoke to the (then) Secretary of State, James Cleverley.
CST also wrote to him setting out the issues – and to the Chancellor and both Conservative Party Leadership Candidates.
Timing of the government’s response to the STRB
In our July letter, we set out CST’s concern about the timing of the government’s response. We made the point that the Academy Trust Handbook requires that trusts have ‘robust oversight’ of finances, including a requirement to set a balanced budget.
The board must meet so it can minute its approval of the budget. Section 2.9 says "the board of trustees, and any separate committee responsible for finance, must ensure rigour and scrutiny in budget management.” For such reasons, as well as trusts’ wider commitment to maintaining sound finances and operating responsibly with public funds, you instigate a rigorous budget planning cycle. In most cases this planning cycle will result in a budget for the following year being prepared and signed off by the board before the end of the summer term. These processes are at the heart of sound governance and financial management.
Trusts should not be placed in a position as those risks undermining sound governance and finance planning. Accordingly, we called on the government to pledge that it will provide budget information in advance of budget setting so that schools and trusts can deploy their funds to the maximum benefit of children and reduce the workload, stress, and inaccurate process that late decision-making causes.
Analysis of your BFRs and work over the summer
To support our discussions about cost pressures (including the support staff pay offer), we asked you to share completed Budget Forecast Returns, which contain a section on budget assumptions. We analysed these to give us robust evidence on pay awards, energy prices, reserves, and other areas of concern. We held a series of crisis meetings over the summer with the DfE along with colleagues in ASCL and NAHT. We provided evidence of the impact of the cost pressures, proving that the line government was holding that the cost pressures are "just about affordable,” was incorrect.
We said (and continue to say) doing nothing is not an option. I wrote about this here. We also made a special case for the impact on special schools and AP. We collated case studies showing the impact of energy costs on trusts of different sizes and in different financial positions to inform DfE. We have published this infographic setting out our summary of the impact of inflation on schools and trusts. September 2022 CST is the national organisation and sector body for school trusts – advocating for, connecting and supporting Trusts.
Response to the government’s announcement on energy policy
Prior to the government’s announcement on energy policy, we wrote an open letter to the new Prime Minister, Chancellor and Secretary of State stating that the government must ensure pay awards are funded, the energy crisis is addressed, and wider inflationary pressures are mitigated. We said specific, costed, credible policy proposals must be found to support the public sector and families, and we must ensure our duty of care to children is not undermined by a budget that is not fit-for-purpose. As expected, the government made an announcement on energy bill support on Thursday last week. We responded immediately to say that while we welcome the support with energy costs, the 6-month policy proposal creates its own set of difficulties. Schools and Trusts need budget security over the whole financial year, not just for the sixth-month period beginning in October 2022. We also made the point that the late announcements on the Teachers’ Pay Award and Support Staff Pay offer has already impacted on fiscal planning for Trusts. Further uncertainty over energy costs in this financial year will impact negatively on the ability of Trusts to make secure financial decisions and exercise financial governance.
The medium and long term
The energy guarantee is welcome in the short term, but we must also look to the medium- and long-term. Many if not most trusts are spending reserves in-year to shore up budgets. Reserves can only be spent once and are not part of a medium- or long-term solution. We need government to stabilise energy resources (which the Energy Supply Taskforce has been set up to address), create a sustainable infrastructure and invest in schools to ensure that the quality of education is protected.
