The government’s claim that schools have the “headroom” in school funding to cover pay rises and other increasing costs “does not resonate” with academy trusts, an influential sector leader has warned.
Leora Cruddas, the chief executive of the Confederation of School Trusts (CST), said her members anticipated “a prolonged period of financial challenge and instability”, despite claims from ministers that schools could weather the financial storm.
In its evidence to the School Teachers’ Review Body, the Department for Education estimated that schools overall could afford £2.4 billion in “new spending” between 2022 and 2024 before facing a “net pressure on their budgets”.
‘Real concerns’ over financial sustainability
Ministers have subsequently claimed schools could afford a 4.5 per cent average teacher pay rise next year with just £90 million of additional funding, after allocating £2 billion for each of the next two years at last year’s autumn statement.
In a blog post, Cruddas said: “In contrast to the findings of the DfE”, CST members anticipated a prolonged period of financial challenge.
“The DfE’s technical note and resultant conclusions about headroom in school budgets does not resonate with the experience and planning in school trusts.
“Trust leaders have reported very real concerns about future financial sustainability.”
She warned trust budgets for 2022-23 were prepared last summer “before inflationary increases and before that year’s pay offers for teachers and support staff”.
“Whilst inflation may be falling, it is not negative, and the cumulative impact across two years may only just be hitting budget plans.”
The DfE’s calculations also assumed that increases in top-up funding for pupils with special educational needs and disabilities in mainstream schools would cover rising costs.
But Cruddas warned it was “extremely likely that increased costs of SEND provision in mainstream schools have exceeded increases in top-up funding”.
The level of funding for the high-needs sector was also “very significantly lower than that experienced by mainstream schools”. And Cruddas warned capital investment in the school estate was now “urgent and chronic”.
Even the biggest trusts struggle
The Diocese of Norwich Education and Academies Trust, which has 38 schools, said its financial position had “tightened significantly” this year, mostly as a result of pay rises from September 2022.
Oliver Burwood, its chief executive, said additional funding pledged at the autumn statement was “much needed” but came “too late”.
“This heaps additional pressure on schools when they are setting next year’s budget with us and is leading to some very difficult decisions around staffing. We continue to lobby with the sector for additional funds, but also for a longer-term financial settlement for all schools.
“It feels slightly farcical that yet again we are guessing at next year’s pay settlement, and what proportion of this will be funded. The result is felt by our leaders in academies and has a real-life impact upon those that we employ and care for.”
Chris Wiseman, the deputy chief executive of the 28-school E-ACT, said as a larger trust it was “arguably more financially resilient than many”. It leveraged purchasing power for lower supply chain costs and pooled funding to centralise costs and move it “to where it is most needed”.
Calls for multi-year settlement
But he said there was “no getting away from the truth – the financial pressures facing schools are considerable”.
“It’s not about a single cost pressure…it’s the compound effect of all of this, at the same time.”
He said protecting pupils’ education would “require long-term thinking – not just a wing and a prayer from one budgeting cycle to the next”.
One large trust finance lead, who asked to remain anonymous, said they were already running a deficit driven by high energy costs.
Extra government funding did not cover costs, “which means that if we are to avoid insolvency then we need to reduce that cost base”.
They also pointed to falling primary rolls, which they said were seen by the DfE as a “cost saving to return to the Treasury” but “progressively undermining the economics of each class”.
Cruddas urged the government to “work with us to build the resilience of the school system”. Additional funding announced in the autumn was “welcome, but we need a sustainable, multi-year funding settlement which recognises the cost pressures on schools”.
A government spokesperson said it s calculations showed that after accounting for pay increases in 2022, £2.4 billion would remain nationally in schools’ budgets to cover other rising costs.
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