Recommendation 27

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