The Unity city academy in east Middlesbrough, which opened in 2002, has admitted it has been overspending by around pound;500,000 each year. The problems were revealed by trustees of the academy, which is sponsored by the building and support services company Amey. Joe McCarthy, chair of the trust, said that new leadership at Unity had been left with a “legacy of financial, management and educational failings” and that redundancies would be needed.

Unity will also establish a federation with another school, Macmillan college, to help it to resolve its problems.

The academy’s former principal, Eddie Brady, resigned last year after the school ranked near the bottom of national league tables.

Meanwhile, the town’s Kings academy, sponsored by the Vardy Foundation, the evangelical Christian group, has also made cutbacks. Eight lunchtime supervisors have been made redundant and more jobs could go in coming months. Nigel McQuoid, the principal, said the staff, who were transferred to the academy from Middlesbrough council when it opened last year, were no longer needed. It is thought the redundancies will save around pound;12,000 a year. Staffing levels are now being reviewed across the school.

Kings is one of two academies sponsored by the Vardy Foundation. A third in Thorne, South Yorkshire, opens in September. The organisation, backed by the millionaire car salesman Sir Peter Vardy, is now talking with two councils in the North-east, Northumberland and Sunderland, about plans to open three more academies.

* The planning office of Ken Livingstone, the London mayor, has angered councillors in Enfield by recommending that they use a site earmarked for an academy for waste disposal. The Conservative-controlled borough council still hopes to use the Innova Park site for the academy, which will be sponsored by a Christian education charity, the Oasis Trust.