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Financial Planning and Academies
Setting out his ‘vision for our schooling system’ David Cameron recently told the BBC that every school in England should become an academy, with academies improving standards and putting the power in the hands of headteachers and teachers, “not bureaucrats”.
Well, what is an academy?
Academies are independent, state-funded schools, which receive their funding directly from central government, rather than through a local authority.
Although the day-to-day running of the school remains with the head teacher or principal, they are overseen by individual charitable bodies called academy trusts and may be part of an academy chain.
Theses trusts provide advice, support and expertise.
They have more freedom than other state schools over their finances and curriculum, and do not need to follow national pay and conditions for teachers.
How many are there?
As of June 2015, there are 4,676 academies open in England. There are hundreds more in the pipeline.
The number has grown dramatically under the coalition government, from 203 in May 2010.
Now over half of all secondaries in England are academies.
But fail to plan and the benefits of having academy status will be lost!
Whist lots of positives have come out of the change in legislation and conversion of many schools to academy status, if you are one of the school considering changing, there are many issues for you to consider – the key one being future funding streams and the importance of planning correctly.
Just as many schools across the country have completed their budgets for the year ahead, more and more often schools are finding themselves facing financial difficulties due to the ongoing cuts to education funding.
Despite recent political promises to protect school budgets and maintain per-pupil funding at current levels, real decreases in funding levels will be apparent. For example, research from the National Union of Teachers indicated schools will face a real-terms cut of around 12 per cent or more in the coming years, despite a promise to maintain budgets.
A recent report from the Association of School and College Leaders (ASCL) has shown that nearly half of the 1,000 headteachers who took part in their study said their school budgets were in either a “critical” or “very serious” state, with almost all of them acknowledging that they are facing financial difficulties.
However, one of the most significant changes to academy finances in particular is the reduction in the education services grant (ESG) – an additional grant for academies – which will be cut to £53 per pupil from 2015/16; 38 per cent less than the previous year.
What does this mean to you as an academy now or a School looking to convert?
The reality of these cuts is that many academies, new and old, are having to find new ways of saving money. This can come via redundancies or perhaps changes in the courses they offer.
Alternatively, further funding may be sort – bid writing, grant applications or the raising of commercial/sponsorship money via private sponsorship.
Equally the consideration of a formal restructure or the joining of a multi-academy trust could present additional savings.
How can McLintocks help?
Converting to an academy may seem like a minefield. Not only does the academy need to ensure that they are complying with financial regulations but they also need to ensure that the school is running efficiently and within budget. At McLintocks we have the experience to assist you with both.
Who are we?
McLintocks are one of the region’s leading independent accountancy firms, offering astute and practical advice to businesses throughout Merseyside, Chester, the Wirral, and North Wales.
Our academies team including Paul McGerty, Katie Cosgrove and Mike Caputo specialise in working with the academies finance team in order to ensure that they are not only compliant with EFA regulations and financial obligations but that they are also ensuring the efficient running of the academy.
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