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DfE 'wants pessimistic academy budget forecasts to boost school funding case'

School business managers’ leader says MATs should take ‘worst case scenarios for everything’ in their three-year financial projections

The DfE believes pessimistic budget forecasts from academy trusts will be 'really powerful' evidence to take to the Treasury, Stephen Morales said.

The DfE wants academy trusts to file pessimistic financial forecasts so that officials have more evidence to lobby the Treasury for more funding, a conference has heard.

The claim comes as government departments prepare their bids for money for future years in the upcoming spending review.

Yesterday, education secretary Damian Hinds told MPs that his department would put forward a “strong case” for education during this process.


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Today, the funding problems facing academy trusts, and the difficulties they face planning for unexpected cost increases, were raised at a Westminster Education Forum event about priorities for multi-academy trusts.

Andy Keast, director of finance and estate at Newquay Education Trust in Cornwall, asked how MATs should prepare the three-year budget forecasts now required by the DfE when they face unexpected costs that “suddenly come out of the woodwork”.

He gave as an example the 43 per cent hike in employer contributions to the Teacher Pension Scheme, which was announced in September.

Mr Keast said: “We cannot project for that because it suddenly appears. The planning that we do is thrown up in the air. How do you propose that we control for that and plan for these things?”

In response, Stephen Morales, chief executive of the Institute of School Business Leadership, said trusts should plan for the worst.

He said: “My view is that if I was operating as a [financial director] in a trust and I had to do a three-year projection I would be taking very cautious approach to that budget projection.

“I would take worst case scenario assumptions on everything, including pension contributions.”

Mr Morales told the forum that this would result in a view that was “quite pessimistic”.

He added: “I have said to officials 'if you are asking for those projections, if you want those trusts to be really honest, are you prepared for the answer?'

“They said ‘we absolutely want the answer because that’s really powerful for us to take to Treasury’.

“So I take them on their word on that, so if I see examples of trusts being hauled across the coals because they have taken a cautious view, I will say ‘but excuse me official, excuse me minister, that’s what you asked us to do’.”

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