A quarter of schools are in deficit at England's largest multi-academy trust – and redundancy payments have more than doubled as it seeks to adjust to the tough financial environment, new documents reveal.
According to the latest set of annual accounts for Academies Enterprise Trust (AET) covering the year to 31 August 2017, the number of teachers employed by the MAT has also fallen on last year.
AET currently runs 64 primary, secondary and special schools across the country. However, in the period covered by the accounts it operated 66, with two of its academies re-brokered to new trusts on 1 September.
The accounts show that 17 academies – a quarter of AET's schools in 2016-17 – reported deficits, along with the trust's central services. This compares to 15 academies with deficits in the previous year.
Academies in deficit
The financial position of those academies in deficit has also generally worsened, with 14 schools seeing their finances deteriorate compared to last year and only three schools seeing them improve. Nightingale Academy in North London had the biggest deficit, with a shortfall of £1.82 million.
“Financial sustainability reviews are being undertaken in key academies," the accounts note, "comprising curriculum staffing reviews, future pupil and income projections, and the effectiveness and efficiency of bought-in services. This will accelerate the speech of such deficits being eradicated."
AET aims to hold reserves of 5 per cent of total annual income, but because of the deficits incurred by its schools its reserves in 2016-17 were less than half this figure, at 2.2 per cent.
“The trust notes that the current levels of reserves held by the trust do not meet the current reserves policy due to the deficits suffered by academies within the group," the accounts state. "The trust has implemented cost-saving plans which will return these academies to surplus.”
AET doubled the amount of money it spent on redundancy payments, paying out £2.12 million in 2016-17, compared to £986,000 the year before. The number of teachers employed by the trust dropped from 2,304 in 2015-16 to 2,117 in 2016-17.
In July the Education and Skills Funding Agency lifted a financial notice to improve against AET which it had first issued in October 2014. However, the accounts paint a picture of an uncertain future for school funding.
“The sector faces uncertainty over the level of future finances," the accounts say. "The national funding formula aims to direct resources where they are most needed, helping to ensure that every child can get the high-quality education that they deserve, wherever they live.
"The trust operates academies throughout England and so the financial consequences of this change in the methodology of allocating funding are not yet clear.”
According to the AET accounts, the highest paid trustee was Ian Comfort, who stood down as chief executive last year and received remuneration of £206,000 excluding pension contributions. Julian Drinkall, who took over as CEO in January, received remuneration of £190-195,000.
That highest paid trustee figure was lower than last year, when Mr Comfort received £236,000. However, this is likely to be because neither Mr Comfort nor Mr Drinkall served as CEO for the whole period covered by the accounts. Mr Julian has previously stated his annual salary is £240,000.
A spokesman for the trust said: “AET has gone through significant change over the last year, with the new chief executive arriving at the mid point through the financial year. He instigated a major overhaul of the whole organisation, and agreed a clear turnaround plan with the Department for Education. This included addressing the deficits in some academies to get them back on track financially. The financial notice to improve was subsequently lifted at the tail end of the financial year, and we are confident that all academies will back to financial health by the end of this current financial year."
The spokesman said that the aggregate financial position of AET's schools had improved compared to the previous year.
He added: "Two schools were rebrokered during the year which represented one third of the reduction in teaching posts. The remainder was caused by staff restructuring."