If a school runs out of money, there are two possible paths, depending on whether it is a maintained school or an academy.
A maintained school can ask the local authority for permission to run a licensed deficit, a deficit budget effectively allowing it to borrow money from the authority.
But this usually comes with conditions, including working with the local authority to put together a plan for how the money will be repaid. In practice, this often means that spending decisions are taken out of the hands of the school leadership.
Academies are not allowed to borrow money, but they can receive a cash injection from the Education and Skills Funding Agency, and would be expected to agree a plan with the ESFA for how the money would be repaid.
For both maintained schools and academies, the plan could also include exploring the option of federating with other schools, or joining a multi-academy trust. When an academy trust is in financial difficulties, the options could include rebrokering one or more of its schools to another trust.