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Kent Academy Schools Face Teacher Cuts

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Kent academy schools face cutting teacher jobs as leading survey reveals funding crisis

Forty percent of academy schools are now in deficit - nearly twice the 2015 percentage - according to the Kreston Academies Benchmark Report 2017.

The report concludes that the new national funding formula will make no inroads into the budget difficulties facing many schools.

Instead, the “uncomfortable message” is that county schools face having to make teaching staff redundant.

In its detailed analysis of data from more than 320 academy trusts, which included 600 individual schools across the country, the Kreston report found that even the remaining 60 percent of schools have decreasing surpluses.

The senior management at one institution even reported a plan to defer their own salaries as a way of keeping the books balanced.

Commenting on the report, Phil Reynolds, an academies specialist at accountants and business advisers Kreston Reeves, said: “Schools are facing a perfect storm of costs and demands which for many must now mean cutting teacher jobs. Most have looked elsewhere for savings already. What I am afraid is clear is that the new national funding formula is no general lifeboat for all.

“The report also shows very clearly the yawning gap now emerging between schools that are managing not to run a deficit and the very high percentage that are running with one. There are some very tough decisions ahead in 2017.”

The study says that any expectation that the new funding formula, which will re-distribute grant aid largely at the expense of urban schools, will help significantly to reduce deficits is misguided.

Whilst a small number of mainly small rural schools will see increases of 30% in the support they get, most will receive rises amounting to barely 3 percent a year thanks to transition arrangements.

In fact, a mix of pressures mean that instead of having more to spend the sector faces an 8 percent reduction in per pupil funding by 2019/20, largely due to rising demand for places and inflation.

The report notes that despite some headteachers and CEOs earning “large” salaries there has been a fall in average remuneration, contrary to popular perception.

The typical head teacher in a county primary school in 2016 was paid £63,950, 2.9% less than 2015. The average secondary head took home £92,309, which is 3.7% less than 2015. The biggest fall of all was for heads of MATs. Their remuneration was £100,200, a drop of nearly 8 percent on the previous year.

One reason for the drop is retirement, which has brought in a less expensive generation of teachers to the top posts. The cap in the Lifetime Allowance for pension pots to £1 million has encouraged some to early retirement.

Amid evidence that MATs are making some savings on non-staff costs, the report found “little change” in cuts to non-staff costs in primary and secondary schools.

“This would suggest that academies have already made the easy savings and have improved their procurement processes to look for efficiencies where possible.”

The question remains, it notes, where they will find the £3 billion in reductions required over the next few years, particularly as the National Audit Office has assumed £1.3 billion will be from non-staff costs.

However, the report concludes that financial discipline has been improving in primary and secondary schools across the region “but the overall picture is still of having to manage with less”.

The average cash balances held by a primary academy last year were £323,000 compared with £363,000 the year previously; for a secondary: £937,000 compared with £1.093m; and for a MAT: £1.777m compared with £1.859m.

Also looming large as a problem are changes to pension arrangements, some already feeding through. These mean that an academy now finds 13 percent of its General Annual Grant absorbed by pensions contributions.

One consequence of this is that some MATs plan to recruit people from outside the Local Government Pensions Scheme and the Teachers Pension Scheme.

 

For your copy of the 2017 Academies Benchmark Report please email enquiries@krestonreeves.com.  




Author:Kreston Reeves

Source:http://www.krestonreeves.com