The government’s drive for all schools to be in a multi-academy trust by 2030 is at increasing risk as trusts are “focusing on survival” over growth in the face of significant cost and recruitment challenges, experts have warned.
School leaders have told Tes they have paused expansion plans because of the financial pressures they are facing, and sector leaders have warned that trusts will have to “deprioritise” growth until there is clarity from ministers on funding.
In the Department for Education’s Schools White Paper, published in the spring, the government revealed its plan to have all schools “in a strong multi-academy trust or with plans to join or form one” within the next eight years.
In the same paper, it said: ”We expect that most trusts will be on a trajectory to either serve a minimum of 7,500 pupils or run at least 10 schools.”
But since then the financial challenges for school leaders have ramped up - due to rising staff costs, energy bill increases and other inflationary pressures - and many MAT leaders do not believe their organisations have adequate funding to deal with them.
Sector leaders have said an “increasing” number of trusts have put expansion “on pause” while they deal with these financial pressures, and that the plan to have all schools in trusts by 2030 is now “way down on the list of priorities” for most leaders.
One trust leader told Tes they had paused expansion due to financial pressures, while another said they would not take on a school in deficit - and that, with schools in deficit set to become “a lot more common”, expansions could be less frequent without government financial intervention.
Regional schools network Schools North East warned in a briefing to members that there are concerns among its members that some maintained schools with large deficits (as well as smaller trusts) could be “left behind”, as financial factors determine where trusts can and cannot expand.
Academy trusts ‘pause’ expansion plans
Dan Morrow, chief executive of Dartmoor Multi-Academy Trust, an 18-school trust in the South West of England, said the trust had “paused” its growth strategy due to financial pressures and the need to look at its model.
He added that there was “zero chance” the trust would take on any school or trust that had a deficit that would carry over to it.
Steve Chalke, founder of the Oasis Community Learning academy chain, warned that it would never take on any school that had a big deficit.
He warned that schools with deficits are “going to be a lot more common” in the near future due to financial pressures, adding: “So we’re going to see trusts having to say more and more, ‘The government needs to write off the deficit or we won’t be able to expand.’
“This current financial situation creates a survival of the fittest environment. For some - the slightly smaller trusts - it will completely replace the appetite to expand.
“They’ll need to look at their costs and focus solely on survival rather than expansion. And, although the biggest trusts may be able to expand in a planned way, even their first instinct will be towards survival, rather than growth,” Mr Chalke added.
“The educationalists, the CEOs may find their heart telling them to expand through a desire to take on and improve schools, but their head - in the form of their board, who are legally responsible for ensuring sound finances - will be saying, ‘We just can’t do that.’”
Hugh Greenway, chief executive of The Elliot Foundation Academies Trust, which has more than 30 schools across the country, said that he agreed trusts would “deprioritise” expansion due to cost pressures.
“School trusts are charities. They exist to serve a charitable purpose, normally the advancement of education for the public benefit. They are also obliged by company and charity laws to protect their own assets. This is to stop them becoming victims of their own vocation and bankrupting themselves in pursuit of their purpose”, he said.
MAT target now ‘way down the priorities list’
Sector leaders also expressed doubt over the likelihood of trust expansions in the near future, with Geoff Barton, general secretary of the Association of School and College Leaders, warning that the 2030 academisation target is now “way down the list of priorities”.
“The dire funding situation in education will undoubtedly make trusts very cautious about bringing in new schools, particularly where the school concerned is facing an in-year deficit, a situation which the current crisis will make much more likely”, he said.
“Trusts will be struggling with the impact of huge and unfunded additional cost pressures across their existing schools, and simply will not be in a position where they will be able to support a school whose finances will worsen the situation.”
He added that the funding problems would significantly affect schools with low Ofsted ratings, because these schools were already often below capacity because of the” stigmatising effect of the Ofsted judgement” limiting their per-pupil funding.
Leora Cruddas, chief executive of the Confederation of School Trusts, said trust leaders are having to make “very difficult decisions” because of financial pressures.
“In some cases, this includes taking the difficult decision that trust growth cannot be a priority until there is clarity from the government on how cost pressures will be mitigated,” she added.
Responding to suggestions that trust governing boards might seek to block expansions to take on schools in financial difficulty, Sam Henson, director of policy at the National Governance Association, said a trust board would be “right to challenge” an expansion if it involved taking on a school it had financial concerns about.
“A trust board doing its job well should be issuing those challenging questions,” he said.
And he added that while he was not aware of trusts having taken growth off the table “permanently”, an “increasing number” had put it on pause.
“We are worried about the impact the current cost pressures will have on smaller trusts. They are the most likely to say they wanted to grow in the last year and yet they are the least likely to have grown,” Mr Henson said
“This shows why there needs to be a total review of funding, full stop. It goes way beyond the issue of trusts growing and towards why are these deficits there in the first place. That’s the most alarming thing.”
School sector leaders have been warning about funding issues in education for months now.
Last month leaders of 13 organisations, including the Confederation of School Trusts, the NAHT school leaders’ union, the Association of School and College Leaders, and the National Governance Association, wrote to all Conservative MPs warning that schools in their constituencies will see an average shortfall of up to £45,000 for primaries and £250,000 for secondaries by 2024.
And earlier this year, the Institute for Fiscal Studies warned that the government was no longer on track to deliver on a pledge to restore per-pupil spending to 2010 levels in real terms by the end of this Parliament.
A Department for Education spokesperson said: “We understand that schools and trusts are facing cost pressures, which is why we are supporting them with £53.8 billion in core funding this year, a £4 billion increase from 2021-22.
“We are committed to ensuring every school has joined or has plans to join a strong multi-academy trust by 2030 and have dedicated £86million of Trust Capacity Funding over the next three years to help achieve this.”
