Academy trust bailed out by government over pensions delay

A struggling academy trust relied on a government bailout to ensure it could pay pension contributions, it has been revealed.

TBAP multi-academy trust, which runs 12 alternative provision academies, was issued with a financial notice to improve by the Education and Skills Funding Agency in August, after leaders requested almost £1 million in additional funding from the government.

It has now come to light that the trust also needed government help to pay its pension contributions.

The financial health of the academies sector is the source of concern in the school community amid stagnating funding. As of last August, 185 trusts, or 5.9 percent of those nationally, were in deficit, up from 167 the previous year.

Worryingly, academy accounts published earlier this month also show the academies sector had a pension deficit liability of £7 billion in 2016-17.

A TBAP spokesperson said the delay was related to “cashflow issues” and payments are now “all up to date and being paid on time” following the government’s financial support.

But the news has prompted concerns from union officials, who called for clarity on actions taken to stabilise the trust.

Niamh Sweeney, a former president of the National Education Union and local activist in Cambridgeshire, where the trust has several schools, said the pensions issue was “one of many” flagged by members.

“We are concerned that the TBAP was issued with a financial notice to improve, and would like assurance from the trust that they have put sufficient measures in place to deal with the issues of poor financial management and lack of control,” she told Schools Week.

The disclosure also paints a worrying picture of how close some trusts are to collapsing. A Schools Week investigation in 2016 found trusts had pension deficits in the tens of millions.

Experts told Schools Week the government would ultimately have to cough up to cover deficits should a trust collapse.

However the £1.3 million pension deficits belonging to the Lilac Sky Schools Academy Trust, which was wound up last year, were transferred to the new trusts that took over its nine schools.