Academies Benchmark Report 2024
The Academies Benchmark Report 2024 is now available for download
We are delighted to share with you the annual Kreston UK’s Academies Benchmark Report 2024. This report provides a valuable insight into the current financial position of academy trusts across the UK and the challenges facing the education sector.
We hope you find the report informative and that it assists you in understanding more about how your Academy trust is performing and how you could further improve.
Below you will find commentary and analysis of the report from specialists within our firm, including details of what future financial options trusts will potentially explore.
Analysis of the Academies Benchmark Report
The 2024 Academies Benchmark Report, which includes almost 300 Trusts representing more than 2,300 schools, reveals a marked increase in the number of academies dipping into their reserves to keep up with the significant cost increases that have hit the sector.
Trusts running in-year deficits – where they are spending more than their allocated revenue for that year – has more than doubled since 2021, jumping from 19% in 2021 to 47% for the financial year ending in 2023.
Although staffing costs have remained fairly static across the sector non-staffing costs have seen an increase of 16% per pupil. Energy costs have contributed significantly to this rise, with average heat and light costs per pupil increasing by a minimum 49% against the previous year.
Despite this somewhat bleak picture, the sector has faired far better than many predicted.
Peter Manser, Partner and Head of Academies and Education said: “Trusts have been extremely effective in controlling costs in light of financial uncertainty, managing staff expenditure and putting off large capital projects so the reality is a little more positive than we were expecting. Unplanned income streams from government have also kept the wolves from the door and ensured many avoided slipping into deficit.”
Ongoing uncertainty around funding has impacted heavily on the sector in the 2022/23 financial period with many trusts reporting that they have been unable to make decisions around investment.
Longer-term financial options for Trusts
Kimberley Foulkes, a Manager in the Academies and Education team at Kreston Reeves commented: “Trusts don’t know what additional income streams they will receive from one year to the next. Will they receive more money to cover energy costs? How much will be offered to cover pay review and pension contributions?
“This typically results in the trusts basing their future income on current income streams. Consequently, it is very common to see a trust feeling confident about their current budget but predicting a significant in-year deficit in year 2 or 3 in their plans.
“This all leads to a sense of impending financial doom in the sector with the result that any decisions around investment are fraught with risk. It is very common for example, to see important decisions around large capital projects being kicked down the road because of this uncertainty.
“Trusts are also looking at the longer-term financial options for future stability including possible staff restructures, trust mergers and further forecasting and analysis of birth rates.”
Kreston Reeves are currently helping Academies with personalised benchmarking services, incorporating the report’s results with their Academies. If you are interested in benchmarking your own Academy you can learn more by contacting us today.
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