Ridings Federation of Academies issued with financial notice to improve over potential ‘£1 million deficit’

Ridings Federation of Academies issued with financial notice to improve over potential '£1 million deficit'

A trust in charge of two academies has been issued with a financial notice to improve – and the threat that its funding could be terminated if a reported £1 million deficit is not balanced out.

The Ridings Federation of Academies, which runs the Winterbourne International Academy and Yate International Academy in Bristol, has been told it must submit a plan by early next year on how it will “achieve a balanced budget” and repay its funding deficit – or risk having its funding agreement with the government axed.

The letter to Claire Emery, chair of governors at Ridings Federation, from Mike Pettifer, director of the government’s Academies and Maintained Schools Group, acknowledged “the scale of the historic challenges” at the trust – but said there had been a failure to ensure “robust governance arrangements” as well as good financial management and internal controls.

A further letter written by Emery, leaked to the Bristol Post, warned staff that a deficit of a potential £1 million deficit by August 2016 made the federation “financially unsustainable”.

The financial notice to improve told Emery an action plan had to be submitted by February 2017 detailing how the trust will achieve a balanced budget by the end of the 2017 to 2018 academic year, and each year thereafter.

“This must be supported by robust budget forecasts with evidence to support realistic pupil number forecast.”

It added that “a clear timetable for recovery of the repayable deficit funding” must also be submitted.

If these requirements were not met, “the termination process in the Funding Agreement (FA) may be triggered” and, “depending upon the severity of the breach”, could lead to termination of the agreement.

The notice is the most recent sent to an academy trust following a significant upswing in the number of financial notices to improve sent out in 2016.

Government data published last week revealed 25 financial notices to improve had been issued to academy trusts this year, compared to just seven in 2015.

Russell Hobby, general secretary of schools leaders’ union NAHT, said financial scandals and underfunded schools were making for a “toxic environment”.

Schools Week approached the trust for comment, but was pointed to a previous statement already issued by Ms Emery. It read: “The federation is dealing with a financial deficit, and the trustees are looking at various ways to reduce this.

“As part of this process, I wrote – on a confidential basis – to all Ridings’ Federation staff in my capacity as chair of the Ridings’ Federation of Academies.

“I wrote to update staff on the federation’s position and to request their proposals and thoughts around potential cost saving measures.

“This correspondence was sent to facilitate a collaborative approach to seek the best outcome in the circumstances. The subsequent feedback from staff members will be considered and responded to in the correct forum but I want to reassure all staff, pupils and parents of pupils attending The Ridings’ academies that the Federation is committed to supporting its staff and to ensure that all of its pupils receive excellent learning.”