ESFA annual report and accounts: 8 things we learned

The Education and Skills Funding Agency (ESFA) has written off £4.5 million owed by academy trusts to re-broker their schools, cut staffing levels again and forked out hundreds of thousands for consultants.

It also coughed up £107,000 for an employee’s payout and continues to wait for more than 60 per cent of local authorities to submit financial statements, the agency’s latest accounts have revealed.

Here’s what you need to know…

1. £4.5m rebrokerage debt written-off

The ESFA said it had waived or abandoned over £4.5 million in debt owed by academy trusts which had schools rebrokered into other chains.

This included £2.47 million owed by the SchoolsCompany trust, which collapsed in 2018 amid accusations of financial mismanagement. The government is funding the trust to pursue former trustees in court for £2.8 million of lost public funds.

SchoolsCompany is one of four trusts named in the accounts with debts of over £300,000 written off. The others are Harefield Academy Trust (£915,000), Chapel Street Community Schools Trust (£804,000) and UTC Leeds (£327,000).

The ESFA explained that balances owed by academies “may in some circumstances be waived” to facilitate moves to a “more sustainable” trust.

2. Increased risk of ‘errors’

Risk assessments conducted by the ESFA found the risk its “reduced health and resilience” would lead to “increased errors” had risen.

This was because demands “on the [funding] service have grown and uncertain timelines and requirements make operational planning more difficult”.

To mitigate this, it has a “close working relationship with DfE”, monitors performance, tracks and learns “from unexpected issues” and uses “intelligent resource management”.

3. Staff numbers fall again

Staff levels have fallen for the second year running.

Cuts started to be made after the Department for Education approved Sir David Bell’s recommendation to more than halve the number of officials working for the agency.

This led to the ESFA’s headcount shrinking by more than half, from 1,779 in 2021-22 to 829 the following year.

The number employed by the agency now stands at 714, down 14 per cent since 2022-23. Total staffing costs have reduced to £46 million.

4. One departing employee got £107k

Accounts show the agency agreed just one exit package across the financial year, compared to 28 in 2022-23.

Papers suggest the payout was worth £107,000.

The DfE has been asked who the money went to and why it signed off on the agreement.

5. Lack of LA accounts for years

The documents noted that a “key assurance risk continues to be in relation to grants paid to local authorities”.

The number of outstanding audited financial statements from councils “has increased” in recent years, with the trend continuing in 2023-24.  

More than 60 per cent of authority statements for 2022-23 have not been received, with 47 per cent racking up “at least two years of outstanding audited accounts”.

“We understand that the main reason for the outstanding financial statements continues to be finance team and external auditor capacity issues.

“This has been exacerbated by an ongoing technical accounting issue, unrelated to ESFA funding, and the impact of local government pension scheme valuations on delayed accounts.”

6. £1.5m consultants fees

More than £1.5 million was spent consultants over the year, accounts show. The figure represents a 350 per cent rise on the amount spent in 2022-23 (£345,000).

About £400,000 went towards “legal consultancy costs in relation to [further education] loans” and £1.2 million for school resource management advisers (SRMAs).

SRMA spend stood at £800,000 in 2022-23 and were not recorded as consultancy expenditure at the time.

7. CEO’s pay shoots up

ESFA chief executive David Withey was listed as the body’s highest-paid director, having received between £160,000 and £165,000 in total pay and benefits.

This represented a 15.7 per cent increase on the amount he took home in 2022-23 (£135,000-£140,000).

Meanwhile, employees were given a rise of 4.3 per cent over the same period.

Withey’s remuneration was four times median pay levels across the ESFA, up from 3.5 the year before.

Accounts stated that the movement in his salary was “primarily driven by the current year benefit-in-kind gross-up rather than any significant uplift in salary levels”.

8. Mental health training

The coroner in the inquest into the death of Reading headteacher Ruth Perry warned in December there was a “risk of future deaths if there is only lip service paid to learning from tragedies like this”.

And following the publication of the coroner’s report, ESFA “has reflected on what further steps could build on this approach”, accounts say.  

It subsequently “provided training to over 320 frontline staff on how to recognise and respond to signs of mental distress through mental health awareness”.