Academies & Education – Storm clouds hover over the sector as we enter 2019
Away from the backdrop of Brexit and political squabbling, another year draws to a close for the academies and education sector. It was a year where budgetary pressures continued, GDPR was introduced, television documentaries brought disgust and the ESFA released their “naughty list”. But what will 2019 bring?
It is widely expected that employer Teachers Pension contributions will increase in 2019 with predictions of an increase to more than 23% (an approx. 40% increase on the current 16.48% rate). How schools are going to cope with this is anyone’s guess and tough decisions lie ahead in order for schools to balance their budgets.
Schools should receive the “little extras” funding which was announced in the Budget 2018. It is expected that the average primary school will receive £10,000 and secondary schools will receive £50,000. A “ready reckoner” has recently been published for schools to calculate their approx. funding – but there is no news on when this will be received yet.
Damian Hinds has recently announced the Teachers Pay grant will continue in 2019 to 2020 and both pupil premium and UIFSM funding will continue at the current rates for 2019-20. ESG protection will also continue for academies in 2019-20.
As SEND pupil numbers rise, additional high needs funding will be allocated across all local authorities of £125m for both 2018-19 and 2019-20.
Damian Hinds replaced Justine Greening as Secretary of State for Education, due to differences involving a change of role, at the start of 2018. This was originally seen as a significant blow to the sector but Damian Hinds has been receptive to hearing about the various pressures the sector faces. How long he will remain as Secretary of State remains to be seen as Brexit continues to cause waves of change and uncertainty in government.
Lord Agnew has made a large impact in the year and continues to promote transparency across the sector. He has been a big advocate of Integrated Curriculum Financial Planning (ICFP) and is always encouraging schools to undertake this exercise. From the work we have done, it has proven a worthwhile exercise in enabling schools to challenge their current protocol more and ensure departments in schools talk more.
It was a shame to see Sir David Carter step down from his role as National Schools Commissioner in the year – he was often a very vocal champion of school governors and trustees, claiming we are the unsung heroes of the sector.
Come the 30 March 2019 we will no longer be in the EU. The sector continues to be completely unaware how this change will impact upon schools and their resources.
The government though have admitted their post-Brexit immigration policy could hit teacher recruitment. It is unknown if the proposed £30,000 earnings threshold for workers wanting to come to the UK will impact on teachers.
As an idea of the potential impact, teachers from Europe currently equate to around 2.6% of primary school teachers and 3% of secondary school ones. Schools should look to come with a Plan B if their planned recruitment policy is impacted.
BBC’s Panorama caused a stir back in September with its “Profits before Pupils?” edition which focussed on The Bright Tribe Trust. This once again led to headlines for academies for all the wrong reasons – the minority once again impacting upon the reputation of the majority.
Lord Agnew has vowed to eradicate this from the system and is placing a greater emphasis on auditor management letters being reviewed before key ministerial decisions are made.
Rebrokerage and mergers
The rebrokerage of Trusts grew significantly during 2018 as the academy sector became almost a “transfer market”. There will always be winners and losers in these scenarios and negotiation continues to be key.
Mergers are becoming more likely as Trusts look to grow and ensure they can benefit from economies of scale. It is widely expected that mergers will grow and become more popular going forward.
Training and development
This continues to be a crucial area, in particular, for governors and trustees. We are seeing more and more cut backs being made by local authorities in these areas which is a shame as governors and trustees do benefit training and development – everyday is a school day!
With that in mind, we have a series of upcoming training events and seminars being held in 2019 which are free to attend and are aimed at Trustees, Governors, Accounting Officers, CFOs and SLT’s. For more information on dates, locations and how to book here.
Make sure you download your complimentary copy of Kreston’s Academies Benchmark Report 2019 here.
This year the report includes over 350 Trusts representing nearly 1000 schools and is based on those Academies that prepared financial statements for the period ended 31 August 2018 and which were audited by member firms of Kreston UK.
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