Eight Out Of Ten Academy Schools Are In Deficit!

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ACADEMY school budgets are in a desperate state with eight out of 10 in deficit, say their accountants. ‘Two more years like this and the entire sector could face insolvency,’ says a just-published report from the Kreston UK accountancy network which looked at 450 academy schools.

The 450 schools are all audited by accountancy firms in the network and are a representative sample of academies in England, say the authors. The figures, for the year ending 31st August 2017, show that of these academies 55% were in deficit before the effect of depreciation of assets like buildings, equipment and furniture was taken into account; this rose to 80% when the accounts were adjusted to include depreciation.

The report calls for more money to be put into these schools by the government to avoid staff cuts. Staff make up 72% of costs in these academies, say the authors. ‘This means that schools will have little choice other than to cut teacher numbers to reduce financial losses in future.’ The report warns that cutting staff numbers and finding enough money for redundancy payments could accelerate many schools towards insolvency.

Nick Cudmore, report author and director at Duncan & Toplis, says that: ‘Schools are doing everything they can to save as much money as possible; cutting back on staff, replacing experienced teachers with less qualified people and going cap-in-hand to parents, but it still isn’t enough to avoid overspending.’

He pointed out that the academies in the report were also delaying repairs and putting off replacing obsolete technology, and that: ‘The whole sector will be on the verge of insolvency if they have just two more years like this one. ‘Accountants can work with governors to help them save every last penny possible, but without significant increases in public funding, this could become a full-blown crisis,’ he said. Academies make up about 60% of secondaries and 20% of primaries in England.

The authors of Kreston UK report hasten to emphasise that they are accountants with ‘no hidden agenda and no political allegiance. All we do is report on the facts in our report which is published every year.’ The government’s intention is that all schools will become academies (including free schools, studio schools and university technical colleges), and that the state education system will be replaced by a collection of independently managed, privately sponsored and state-funded individual schools.

This drive has led to forced ‘conversions’ into academies, and a process for determining which academies go ahead and which don’t, that is not transparent. The process is hidden behind the excuse of ‘market sensitivity’ with applicants for sponsorship not revealed until it is too late for parents and unions to raise any concerns they may have over the ethos of the academy or sponsor.

Since their inception academies have had the freedom to set their own pay. Academies are, in the large part, stand-alone institutions with staff moving from one academy to another having no continuity of service for salary progression, sick leave or maternity benefits. Working conditions are being changed in academies, with longer working days, weekend working, summer schools and homework clubs. Also non-teaching duties are forced onto teachers who have been forced into additional duties or extended hours without an increase in pay.

The academy curriculum is determined largely by external tests, ‘league table behaviour’ and the demands of Ofsted, not by the national curriculum from which academies have been freed. Academies are free to employ ‘teachers’ without regard to their qualifications. Stand-alone academies are accountable only to the DfE, and only by way of a contract between them.

Many academies, particularly free schools, are governed by faith groups who promote a particular faith. Trade union recognition is not automatically transferred over in accordance with the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) in ‘new-build’ academies, including free schools!

The Kreston UK report shows that the academy system has collapsed in a bankrupt heap. It is another big reason why the trade unions must bring down the May government with a general strike to bring in a workers government to fully restore the state education network before the Tories completely destroy it!