This month the government announced that the academy conversion support grant, which gives schools up to £25,000 for converting, will end on 1 January 2025.

According to government data, 43.5 per cent of all schools in England (42.7 per cent of primaries and 81.9 per cent of secondaries) are now academies - and many trusts have plans to grow further.

But where does this funding cut leave local authority-maintained schools that want to convert and trusts that want to welcome them?

“We think those maintained schools that want to convert or are in the process of converting will find it much harder,” says Leora Cruddas, chief executive of the Confederation of School Trusts.

“In particular, primary schools in the current context of funding - falling rolls and local authorities that have in many cases [been] deprived of funding for a long time and no longer have the capacity to support those schools.”

According to the latest available data, the proportion of maintained primary schools with a financial deficit rose from 7.6 per cent in 2021-22 to 12.3 per cent in 2022-23. Meanwhile, a Tes analysis recently showed that trusts with no primaries have nearly five times the average revenue reserves per pupil than all-primary trusts.

When it comes to falling pupil rolls, it has been warned that some schools with many unfilled places will be forced to close because of budgetary pressures.

Schools wanting to convert to academies

Many maintained primary schools have been seeking to join academy trusts to provide financial security but trust leaders say they will find it harder to meet those requests positively.

Nicky Dunford, CEO of Link Academy Trust, tells Tes that her all-primary multi-academy trust took on five schools this year but that it will need to consider requests more cautiously in future, particularly from small schools that are struggling the most with finances.

“The schools didn’t come to us with much money,” she explains. “If we had been asked to pay, which is effectively what we’ll have to do without the conversion grant, we’d have to spend on solicitors’ fees for every school joining us, the diocese, the local authority and to get certain licences in place.

“So when [the grant] stops, who’s going to take on schools like that?”

While Link will continue to “look at good schools” that might “in the long-term provide us with capacity and expertise”, it is now unlikely to consider taking on schools that are struggling.

“Small schools in their communities, rural in particular, are going to be gone. These are the schools that keep people living in villages,” Dunford says.

Susan Douglas, CEO of The Eden Academy Trust, which runs schools for children with special educational needs and disabilities (SEND), is similarly concerned about the impact of the removal of the grant on small schools.

“The smaller the school, the more challenging the budget is, and therefore it’s going to disincentivise schools in terms of conversion,” she says.

Making hard conversations harder

And the challenges are not just limited to small rural primary schools. David Morris, chief executive of HEART Academies Trust, says the removal of the grant is “frustrating”: “You’re taking even more money out of education, where it’s needed.”

The trust is currently in conversation with schools about joining, but until a couple of weeks ago it didn’t know that the government was going to pull the grant.

“Finances are exceptionally tight in primaries at the moment…this makes our conversations with them a lot harder,” Morris explains.

Douglas says there are risks within the special schools sector, too. These schools “can become a bit isolated, and therefore if the option to academise is disincentivised, that risks increasing their isolation”, she adds.

And Ross Newman, CEO of The Leaf Trust, says the removal of the conversion grant also “poses significant challenges” for church schools.

“The financial burden of the £25,000 conversion cost can be prohibitive for many of these schools…Church schools, often smaller and facing higher legal costs due to the need for coordination with the local authority and the diocese, are particularly vulnerable,” he explains.

Stifling smaller trusts

Some in the sector also argue that the impact of the removal of the grant does not fall equally across trusts with ambitions to grow - there is a possibility, they say, that the cut will help large trusts get larger while stifling the growth of smaller trusts.

Rachel Wilkes, CEO at Humber Education Trust, says the move will have a disproportionate impact on small MATs that “won’t have the reserves that bigger schools and bigger trusts have”.

“This policy shift risks stalling the expansion of smaller, primary-only trusts”

Those trusts with smaller reserves will have to prioritise the use of money that could pay conversion costs for frontline services instead.

“If a trust covers the £25,000 needed for conversion, that money is being taken away from somewhere else,” she explains. “It could be to the detriment of services for children and their families, if we’d have to spend £25,000 on legal things - as opposed to support for more vulnerable pupils, SEND support, more direct help to improve teaching and learning.”

Many of the trust leaders Tes spoke to echo those fears.

“This policy shift risks stalling the expansion of smaller, primary-only trusts,” says Newman. “While larger trusts may have the resources to absorb conversion costs for new member schools, smaller trusts lack this financial flexibility.

“This disparity may contribute to an uneven landscape where larger trusts continue to expand, while smaller trusts struggle to compete.”

Nicola Diamond, chief operating officer at South Orpington Learning Alliance Multi-Academy Trust, is also concerned by this. “Smaller trusts are becoming less tenable because of funding,” she says.

The removal of the conversion grant “could leave larger trusts in a better position to grow than smaller trusts, and that is not the footprint any of us want to see - big, monolithic trusts with only a few small trusts remaining”.

She adds that the existence of small, localised trusts is important because of the “community touch points” they offer.

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However, not all trusts agree that the removal of the grant will be so negative.

“The £25,000 never covered the cost of converting anyway,” says Anne Slade, chief operating officer at the Pioneer Academy. “So we always had to put in some contributions from our funds.”

She adds that a change to the criteria of the grant under the previous government - which meant schools would only receive the funding if they converted in groups of three or more - had already rendered it meaningless to her trust because they “don’t tend” to convert more than one school at a time.

Meanwhile, Dave Baker, CEO of Olympus Academy Trust, which is soon to merge with Futura Learning Partnership, says he is more concerned about the impact of another cut, this time to the Trust Capacity Fund (TCaF).

TCaF, which supports trusts to develop their capacity and take on underperforming schools, was also cut earlier this month. The Department for Education told trusts that had submitted bids for the latest round of the funding that no money will be awarded, and that there are “no plans to introduce” further rounds.

“We’re more worried about TCaF going because we might have wanted to put in for some funding to support us in taking on schools in need into the new trust,” Baker says.

A deputy CEO of a small MAT in Berkshire, who wishes to remain anonymous, agrees, saying that the combination of the two changes to grants means that while “conversions won’t totally stop”, “you will absolutely see a slowing down in the growth of MATs”.

No long-term plan for MATs

A bigger issue here, according to education policy analyst Tom Richmond, is that the grant decisions feed into a narrative that there is no long-term plan for the system from this government.

“The removal of the conversion grant leaves headteachers, local authorities and trust leaders even further away from a clear strategy for how the state school system should evolve,” he says.

“If maintained schools will now find it harder to convert, and trusts will find it harder to adopt them, it will surely harden the divide between the two parts of our school system.”

“There’s a perception that academies aren’t where the direction of travel is any more”

Pepe Di’Iasio, general secretary of the Association of School and College Leaders, says: “The most important thing is that schools that are in need of support are able to access it, and the government must explain how it will ensure this is the case going forward.”

So where does all of this leave trusts, and schools considering converting to academies?

“I think there’s a perception out there that academies aren’t where the direction of travel is any more,” says Slade at Pioneer. “But we’re at a tipping point - there are too many academies to revert back [to an all-maintained system].”

The leader in Berkshire says that “the sector needs more information about funding”: while education secretary Bridget Phillipson has spoken in “broad strokes about improving education and hiring more teachers”, “this doesn’t tell us the direction the Labour Party wants to take the sector in in terms of academisation”.

Meanwhile, Morris at HEART doesn’t think there is “an anti-academy agenda”, but says “there just isn’t enough information at the moment”.

The need for clarity

Baker concurs, suggesting that cutting the conversion grant may have opened up DfE finances for the new Regional Improvement for Standards and Excellence (RISE) teams, announced earlier this month. “But we don’t know that yet, because we haven’t seen the detail,” he says.

He adds that the sector wants clarity.

“There are a lot of moving parts, and we can’t see all of them at the moment. We need to see what the whole picture is in order to assess how we’re going to bring about improvement in the schools we’re working with.”

Tes’ MAT Tracker: find up-to-date information on decisions affecting the academy trust sector and our interactive map of England’s MATs

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