A private school-turned-academy saddled with a six-figure deficit after it increased support staff wages to national pay scales because of recruitment challenges has been handed a £500,000 lifeline by ministers.
The Royal School Wolverhampton expects more government cash will be needed to move it out of the red, after drawing up a “recovery plan” with officials.
It comes as Labour bids to strip away academy freedoms over teacher and support staff pay.
It means academies will have to follow a new pay “floor” for teachers and potentially observe pay scales for support staff.
In December, the Royal School – an all-through free school that offers state boarding – was issued with a notice to improve (NtI) by the Department for Education after failing to approve a balanced budget for 2023-24.
Wage boost and cyber attack behind in-year deficit
Accounts, published last week, show the single-academy trust (SAT) ended the year with an overall deficit of almost £765,000.
Among the reasons given for its in-year losses was its decision to move support staff wages in line with national levels.
This “was necessary for recruitment and retention”, as it “acknowledge[d] and resolved the dissatisfaction in wages raised”, accounts state.
Trusts currently do not have to follow national pay rules. But Labour, through its employment rights bill, wants to re-instate the support staff negotiating body.
The changes will apply to maintained schools and academies to ensure all staff “have access to fair pay and conditions”.
The Royal School’s finances were also rocked by a cyber-attack, which hit “all support services… and affected access and provision of management information”.
Accounts added the SAT received an interest-free £499,000 loan from DfE.
But more financial “support will be required… to ensure a positive cash position can be maintained”.
This is the second case this academic year where a trust has been handed an emergency loan to keep it afloat. Schools Week revealed last month that the Arthur Terry Learning Partnership, which runs 24 schools, was offered £1.5 million.
In 2021-22, 10 trusts were given just over £3 million in additional support to enable “financial recovery”. Government has not produced more up-to-date figures.
The Royal School’s NtI also noted that the SAT had failed to comply with requirements to give non-teaching staff “access to the Local Government Pension Scheme”.
Accounts show the £580,000 “historical liability” was discovered in October following “a legal review by King’s Counsel”. Eligible staff have since been enrolled with LGPS.
Free school ‘working to return to self-suffiency’
A Royal School spokesperson said it was “an independent school with its own pension arrangements” prior to its conversion in 2016. It originally believed this could continue for all support staff.
The Royal School stressed its financial difficulties were largely caused by the cyber-attack and the “recently identified pension matters”.
It is “working rapidly and closely with the DfE to return to self-sufficiency” from September 2026.
The National Education Union states “nearly all” academies adhere to national pay scales for support staff.
Nathan Jeremiah, managing director of school resource management adviser supplier EPI, said pay freedoms “can help academies because to compete you may need to do more [in terms of pay] because the local market conditions will demand that to be the case”.
But he added: “I don’t think the intent of what the academy freedoms were there for has played out here.”
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