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Rising pay outs and consultancy fees – eight academy facts

Key findings from DfE report that brings together information from thousands of academy financial accounts

academies, accounts, pay outs, related party transactions, rscs, esfa, dfe

Key findings from DfE report that brings together information from thousands of academy financial accounts

Academy trusts are paying more in exit packages and more to consultants, a report from the Department for Education has revealed.

These are among the facts revealed in the DfE's Consolidate Annual Report and Accounts for the academy sector in England.

Here are some key takeaways from the report:

1. More exit packages

The number of exit packages increased by 5.5 per cent, from 5,598 to 5,906, between 2015-16 and 2016-17.

And the total cost rose by £5 million, from £58.6 million to £63.7 million.

These included two exit packages in 2016-17 that were worth between £100,001 and £150,000.

2. Increased consultancy costs

Consultancy costs in the academy sector rose by more than 10 per cent in the space of one year, from £159 million to £176 million.

The report says 144 academy trusts had arrangements where some people were paid off-payroll.

3. Rising cost of related party transactions

The number of payments academies made to related parties fell last year – from 3,033 to 2,399 – but their total value rose by almost 10 per cent, from £122 million to £134 million.

This increase was driven by the increase in the total cost of related party transactions worth more than £250,000.

There were 62 of these last year, compared to 70 the year before, but their cost rose from £62 million to £79 million.

4. Big drop in formal interventions by RSCs

Regional schools commissioners made much lighter use of their formal powers to intervene in academies in 2016-17.

The number of pre-warning notices they issued fell from 35 in 2015-16 to two in 2016-17. The number of warning notices fell from 14 to three in the same period.

However, RSCs issued one termination notice in both years.

5. More academy trusts with deficits

There were 185 single or multi-academy trusts in deficit in the 2016-17 – up from 167 a year earlier.

The total cumulative deficit across these trusts was £65 million – up from £50 million the previous year.

6. Increase in academy trusts paying £100,000 salaries

The proportion of academy trusts paying at least one salary above £100,000 rose last year.

In 2015-16, 29.3 per cent of trusts (873) paid at least one individual more than £100,000, but this proportion rose to 30.1 per cent (941) in 2016-17.

The proportion paying at least one salary in excess of £150,000 fell slightly from 4.1 per cent to 4 per cent.

7. Severance payments costing more

The number of “special payments” made across the academy sector rose from 1,358 in 2015-16 to 1,409 in 2016-17.

Of these, the vast majority are listed as “severance payments”, worth a total of £24.9 million last year – an increase from £23.8 million in the year before.

8. Risk of too few high-quality academy sponsors

The DfE lists “sponsor quality” as the first in a set of risks facing the sector.

The report says: “There is a risk of there being an insufficient number of high quality sponsors and MATs available to support underperforming schools.”

Action the department is taking to address this includes encouraging more good and outstanding-rated schools to become sponsors.

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