Funding cut may force trusts to scrap expansion plans

Academy trusts have been left up to £100,000 out of pocket following the government’s sudden decision to scrap capacity funding – with fears expansion bids could be stopped in their tracks. 

Leaders revealed that the move to scrap the latest round of trust capacity funding (TCaF) has left them having to absorb six-figure costs and wondering “where trusts sit” in the education landscape. 

The Department for Education also axed the trust establishment and growth (TEG) fund and academy conversion payments – but said it had no plans to end any other expansion grants. 

Consultant Lucia Glynn said: “With the loss of that funding, it’s almost as if a rug has been pulled from under everyone because conversations [about growth] that will have been going on for a year, 18 months… may no longer be able to be fulfilled.” 

The TCaF provides cash to help MATs develop their capacity and take on underperforming schools, particularly in education investment areas. But many trusts pay for the improvements before receiving the cash. 

Weydon Multi-Academy Trust, in the south east, had lodged a £100,000 bid to help it grow from eight to 13 schools by February. 

Having already taken on three schools, the trust paid for an HR director, IT switchovers and a full-time executive director of special needs, among other things. 

‘Little incentive to convert LA schools’

“You’ve got to build capacity before schools come on board, [and] we were counting on that [TCaF],” said John Winter, its chief executive. 

“When you’ve not got £100,000 coming in that you planned for, that’s a significant issue. I don’t think there’s much of a financial incentive [now to take on converter schools].”

Meanwhile, Durham and Newcastle Diocesan Learning Trust also forked out £114,000 to employ a director of school improvement.  

Paul Rickeard, its chief executive, said the MAT did not build the TCaF funding into its budgeting this year “because we had a hunch that as things got tighter it would be taken away”. It has had to use its reserves to meet the costs. 

Rickeard thought the TCaF cuts were “part of a bigger conversation about where academies sit” in Labour’s vision for schooling. 

In Sheffield, Minerva Learning Trust had applied for £500,000 to help it with a merger. The changes have forced it “to re-evaluate our budget and the nice-to-haves and must-haves from that fund”.   

In emails, seen by Schools Week, the DfE said last week there were no plans to introduce future [TCaF] rounds, and that it had decided not to award funding to any bidders in its latest window.

The government also ended TEG and its grant scheme for schools choosing to become an academy. 

The Confederation of School Trusts said the decisions would make it “much more difficult” for trusts to support maintained schools that needed help and left smaller schools “very vulnerable”.

The conversion grant – which allows voluntary converters to get “up to £25,000 to spend on the process” of switching to academy status – is due to finish in January. Applications will need to be submitted by December 20.

Glynn stressed the grant “has never covered all of the costs”, but without the money smaller schools and trusts might not be able to join forces. 

Trusts ‘may not have resources’ to grow

“There’s a risk of [there being] orphan schools. The smaller trusts – with three, four, five schools – or those with 10 to 12 – may not have the resources anymore to take on another school.”

She believed the announcement could prompt schools and trusts “to expedite this growth in order to take advantage of this funding”. 

One chief executive – who asked not to be named – said the announcement could leave some schools that had been waiting up to three years to join his trust unable to access the cash. 

The money paid for legal advice, IT transfers, HR advice, rebranding costs and any expenses associated with forming a new trust. 

When asked on Monday why the grant was scrapped, education secretary Bridget Phillipson said: “We were faced with some very tough choices with a £22 billion hole in the public finances.” 

Schools Week asked the DfE whether any of its other funding streams for growing trusts – including the strategic school improvement capital budget, sponsored academies pre-opening grant and emergency school improvement fund – were under threat. 

Officials stressed they had no current plans to axe any more. 

DfE said they are clear applications to TCAF are not guaranteed to get funding and trusts should not spend money until cash is confirmed.

A spokesperson added: “We value the role academy trusts play in our school system, but have had to take action to put government spending back on to a sustainable footing and fix the foundations to deliver change.”