Primary academies will be forced to make decisions that could compromise children’s safety and may have to lay off teachers because of government funding cuts, the leader of a chain of schools has warned.

A typical small school will receive less than half the money it needs to fulfil certain duties from next September according to Hugh Greenway, managing director of the Elliot Foundation, a chain praised by the Department for Education.

“Which is more important, asbestos compliance or child protection?” Mr Greenway said. “Neither - they are as important as each other. But we, as a multi-academy trust, and others, will be forced to make decisions on this.”

The education services grant (ESG) will be cut by more than a third from next September, which, according to Mr Greenway, will also affect educational outcomes as academies will have to “fire teachers to pay for accountants”.

The ESG is used to pay for services traditionally provided by local councils, such as school improvement, teacher training and internal audits on issues like child protection or building safety. The DfE has decided that the ESG will be cut from pound;140 to pound;87 per pupil per year.

Mr Greenway said his foundation had calculated that a typical one-form-entry primary needed an annual grant of pound;38,000-pound;42,000 a year, but would actually receive just pound;18,270 under the new funding model. Even with 17 primaries, his chain would not have the flexibility to cope with the cut, he said.

“You can’t run a primary school and keep it safe, solvent, structurally secure, legally compliant and educationally improving on pound;18,000 a year,” he said at a recent Westminster Education Forum event.

Mr Greenway acknowledged to TES that such primaries would have core annual budgets of between pound;800,000 and pound;1 million, but said there was “no slack” in them.

Russell Hobby, general secretary of the NAHT headteachers’ union, said the cut would come as a “big shock” to many of the small primaries that had converted into academies as the money would not be sufficient “cover their costs”.

The funding decision is the latest in a series of challenges to the viability and effectiveness of the government’s primary academies programme. Earlier this year, an analysis of national test scores showed that low-performing primaries that had been converted to sponsored academies were improving at a slower rate than their conventional state-school counterparts.

The government’s national schools commissioner, Frank Green, also warned last month of the impact of tightening small primaries’ budgets and said that no school should operate as an academy in isolation.

Currently, more than 40 per cent of the 2,211 primaries with academy status are outside of formal groupings of schools, according to DfE statistics released last month. Many of the wider costs of running a small primary would traditionally have been swallowed up by the economies of scale enjoyed by local authorities.

A DfE profile of the Elliot Foundation published earlier this year praises the chain’s “transformational impact” but notes that “finance remains the greatest challenge”. The report admits that roof repairs on one of the foundation’s schools could have “rendered the entire organisation insolvent”.

It also reveals that Mr Greenway told DfE officials that the Elliot Foundation’s existence depended on people being prepared to work for free.

He used the Westminster event to mount a wider attack on the academies programme. “Can we drop the word freedom?” he said. “There aren’t any freedoms. Primary academies have less money, fewer people, more bureaucracy, more oversight and have to disclose more than local authority schools ever had to.”

He suggested that running a primary academy trust involved so much legal responsibility that it was a “short-track to a life in jail”.

“If we make it any more difficult, anyone who applies to the post should be disbarred because they don’t understand the risks involved,” he said.

A DfE spokesperson said: “While we know that these savings can be challenging, we have ensured that the core schools budget and the pupil premium - worth pound;2.5 billion this year alone - is protected in real terms up to 2015-16. By making savings to the ESG we are able to protect the core funding that is given to schools.”

`We are doing more than our fair share’

Jack Hatch is executive headteacher of St Bede CE Primary Academy in Bolton, one of the first wave of primaries that converted to academy status in 2010.

Since then, he says the government has shaved pound;200,000 a year from his funding and he expects the situation to worsen next academic year because of the education services grant cut.

“I think nowadays academies are taking more than their fair share of the tightening of the belt,” Mr Hatch says.

A surplus from a childcare business run by the academy has allowed it to plug the gap. But, Mr Hatch adds: “If I had not been able to do that then I would have had to look at trimming staffing.”