Practical ways academies can manage rising costs
Soaring energy prices and rising inflation have created for many a cost-of-living crisis. It is being keenly felt by academy trusts, and highlighted in the 2023 Academies Benchmark Report.
Against a backdrop of teacher strikes, academies will continue to face further financial pressures. So what are the implications and how might academies respond?
Leadership and specialist roles
The Government actively encouraging single academy trusts (SATs) to consider mergers with larger multi-academy trusts (MATs), and when facing a tough financial climate that could make good financial sense.
MATs by their increased size can potentially attract and grow strong leadership teams with greater expertise shared across member schools. This could include dedicated HR and finance teams and specialist teaching resources. These roles could, however, demand greater salaries.
There is another and often overlooked benefit. MATs with these specialist senior roles in place could offer their expertise out to other schools and MATs on a consultancy basis. Income generated from these consultancy services is mostly considered ‘unrestricted income’ and can be used by a MAT in any way they wish.
Good budgeting should be adopted by all schools. It will help predict any lean periods and where they might fall. There are an increasing number of technology platforms and cloud based products coming to the market that can help MATs with budgeting. Your accountant should be happy to assist you with a better understanding of budgets at the Board level. At Kreston Reeves we can offer bespoke Trustee training packages.
Adopt academies chart of accounts
The academies chart of accounts (CoA) is an ESFA initiative which was first introduced in 2019. The purpose of the software is to align financial data across the sector and provide the opportunity to automatically populate the Academies Accounts Return, Budget Forecast Return and in the future, a set of draft financial statements.
There are many advantages that are explained in detail here, not least of which is support in creating Budget Forecast Returns.
Consider a trading subsidiary when diversified income hits the £80,000 charitable trading level and the £85,000k VAT registration threshold. A trading subsidiary could keep trading income out of the Trust and could have tax advantages. But remember, it can come with additional cost and administration responsibilities.
Smart procurement across a MAT can make significant savings across many areas such as cleaning, catering and utilities. Consider using a specialist procurement consultant to help.
It is important to ensure that the consultant has knowledge of the education sector and can signpost grants and funds available for playground and sports equipment and to make buildings more efficient. Match-funding grants are available for insulating programmes and energy efficient lighting and whilst there will be an upfront cost, savings can follow in subsequent years.
Whilst timetabling in a SAT is unlikely to be too challenging, larger MATs often find it a logistical challenge, leaving teaching staff stressed and, ultimately, adding unnecessary costs.
A timetabling consultant can help maximise the efficiency of staff and room timetables, working across the entire MAT to ensure the most efficient timetabling schedules that minimise teacher movements and teaching constraints, improving staff wellbeing and savings.
Seasonal staff and volunteers
MATs will need different resources at different times of the year, for example, sports coaches or forest school staff. Look to hiring staff on a seasonal basis. Look too to volunteers in your community, perhaps to support literacy and reading schemes.
Do you need a marketing plan?
Large-scale residential development will often come with a requirement to provide new schools, with parents tempted to move children to a brand-new school. Neighbouring schools need to prepare, and a marketing plan that sets out how you will keep and attract new pupils will help.
Academies should remember to complete their published attendance number (PAN).
And don’t forget free school meals
And finally, make sure that as many eligible pupils as possible apply for free school meals. It is up to the parents to register their child for free school meals, so consider holding open afternoons to encourage parents to register, particularly if parents do not have easy access to the internet or a computer.
The full report is available for download. Simply complete the form below to download your copy.
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