The country’s biggest primary-only multi-academy trust faced a larger deficit than planned last year, when it carried out a “significant change” programme and spent £481,000 on redundancy payouts.
REAch2, which runs 62 primary schools across the South and the Midlands, reported an in-year deficit of £1.1 million and an underlying deficit position of £2.1 million, in its annual accounts for 2023-24.
This is more than the £900,000 deficit that trustees had signed off on, but a slightly improved position on the previous year, when the trust had an in-year deficit of £1.7 million and underlying deficit position of £2.6 million.
Meanwhile, the trust’s free reserves fell from £4.4 million to £2.3 million.
Bigger deficit for REAch2
Cathie Paine, CEO of REAch2, said the shortfall in the most recent accounts primarily came from challenges in meeting savings targets, particularly amid an increase in children with special educational needs and disabilities.
“We recognise the unique challenges posed by being a primary-only trust within an increasingly volatile financial landscape,” Ms Paine wrote in the report.
Tes has previously reported how primary-only trusts felt they were facing “perverse incentives” owing to financial pressures.
The lower per-pupil funding for primaries - £4,610, compared with £5,995 for secondaries - is frequently cited by leaders as problematic, particularly as younger children are increasingly requiring greater levels of support.
“These challenges are compounded by late notifications regarding key impacts, such as staff pay awards and any associated grants. This complexity makes strategic financial planning particularly intricate,” Ms Paine added.
The Department for Education has said it hopes to announce the 2025 pay award as soon as possible after April 2025.
REAch2 has also begun its “journey” towards GAG pooling (pooling schools’ General Annual Grant funds and then redistributing them), its accounts state, after the trust first announced the move in March 2023, sparking criticism from unions.
REAch2 has gone through a programme of “significant change” during the year, involving substantial staffing reorganisations and centralising services, according to the trust. Nearly £500,000 was spent on staff restructuring, including £481,000 on redundancies and £16,000 on severance pay.
The overall number of employees was down from 3,051 to 3,030, year-on-year.
In December 2023 REAch2 approved a SEND strategy to secure the funding necessary to support an increasing number of children with education, health and care plans (EHCPs).
The number of pupils under REAch2 rose by 366 last year, increasing grant funding by £2.3 million. And significant savings have been identified for 2024-25, expected to reduce the deficit to £500,000.
Increase in high-level behaviour incidents
REAch2 saw a reduction in persistent absence year-on-year, and also its best end-of-key stage 2 outcomes of all time, its accounts state.
However, it followed the national trend of increasing suspensions.
It also saw an increase in the number of high-level behaviour incidents, which include physical harm to other children or adults or the self, or serious damage to property. There were 4,435 such incidents - 1,213 more than the previous year.
“This large rise in number reflects the rising challenges of children with high-level needs in schools and is reflected in the rising number of staff injury figures being reported,” the trust report states.
To address this, REAch2 is focusing on adaptive teaching for the next academic year to help support teachers working with pupils with more complex needs.
REAch2 has more pupil premium-eligible pupils than the national average, as well as more pupils eligible to receive free school meals and with English as an additional language.
Growth and strategy
REAch2 took on two new schools in April 2024 - Apley Wood and Aqueduct schools in Telford. In its annual report, the trust said it will continue to progress discussions about joining with other schools that fit with the trust’s values.
A “programme of change” helped the trust to achieve efficiencies of £650,000.
The trust has also begun a strategic review of its catering provision, due to report in 2025. Catering costs grew from £3,965,000 in 2023 to £4,586,000.
Ms Paine received remuneration between £210,000 and £220,000 for 2023-24 - up from between £200,000 and £210,000 last year.
A spokesperson for REAch2 said: “Over the past year we introduced a central service model to support our schools, which has transformed how we work with our schools, leading to significant savings, as well as providing a robust foundation for us to manage the ongoing challenges posed by external funding pressures. These changes are reflected in our accounts.
“Centralising core support services has meant we can allocate resources where they make the biggest difference - directly into the classroom. This strategic shift is more than just about ensuring financial sustainability; it is also about making sure that our schools have the support they need to become great schools.
”By pooling reserves, we are now in a stronger position to deliver on our goal of equity for over 20,000 children across our 62 wonderful schools.”
For the latest education news and analysis delivered every weekday morning, sign up for the Tes Daily newsletter
