Source · Select Committees · Public Accounts Committee
Recommendation 27
27
An academy trust reporting a cumulative deficit must agree a recovery plan with ESFA to...
Conclusion
An academy trust reporting a cumulative deficit must agree a recovery plan with ESFA to put the trust back on a financially sustainable path. Where an academy trust is reporting a cumulative deficit, it may require financial support, as part of that recovery plan. The SARA reported that non-repayable funding will only be agreed where there is no other means to protect the interest of pupils.71 In 2019/20, the Department provided additional financial support of £31 million to 81 academy trusts to support financial recovery, build capacity, facilitate a transfer of academy schools triggered by financial or educational factors, or as a short-term advance. Over two-thirds of this additional funding (£21m) has been provided as non-repayable funding.72
Government Response
Not Addressed
HM Government
Not Addressed
5.3 Academy trusts are responsible for managing their own finances and should have the leadership and management capability to resolve any issues themselves. The Education and Skills Funding Agency (ESFA) works closely with academy trusts and will support and challenge them to find the best outcome. Before any additional support is provided, the department expects academy trusts to make use of all support and tools and have a plan to address financial concerns. 5.4 In the most serious cases, and as a last resort, the ESFA may provide additional funding to preserve education provision. Academy trusts are expected to repay any additional funding once they have reached a stable financial position, and non-repayable funding is only used where there is no other means to protect pupils’ interests. 5.5 Provision of additional financial support is transparent. A framework for receiving additional financial support was published in November 2019. This framework sets out the different types of financial support available to academy trusts and for each type: • the eligibility criteria; • the potential conditions of funding; and • how the conditions of funding may vary depending on the value of funding. 5.6 Annual data on the provision of financial support, against this framework, is published alongside the Academy Sector Annual Report and Accounts, with further details set out in the ESFA annual accounts.