School told to 'engage fully' with DfE cost-saving tools or face funding termination

An academy in Northumberland has been told it must use cost-saving resources provided by the government or face having its funding removed.

Berwick Academy has been issued with a financial notice to improve by the Education and Skills Funding Agency. The document outlines a series of conditions the school must meet to avoid being rebrokered to a new sponsor.

According to its latest accounts, Berwick Academy had a pension deficit of almost £1.9 million as of last August and was due to run a deficit budget in 2017-18 as a result of falling pupil numbers.

Schools in financial distress have come under increasing pressure from ministers to cut back-office costs. The government has even created a number of cost-saving initiatives, including an interactive toolkit and an army of cost-cutting consultants, or “school resource management advisers”.

However, last month, the academies minister Lord Agnew told Schools Week of his frustration that schools have not been using the tools.

Engagement with the cost-saving tools were previously optional for schools, but now appear to have become a compulsory rite of passage for schools issued with financial warnings by the government.

It is understood that Berwick Academy is only the second school to have been ordered to use government cost-saving tools. A similar directive was issued to Gilsland Church of England Primary School in Cumbria earlier this month, records show.

In the notice issued to Berwick, the school is told it must “demonstrate that it has made use of the school resource management tools available on GOV.UK”.

The school must have “engaged fully with any additional resources made available through this programme including a school resource management adviser”, the ESFA said.

Failure to meet the conditions set out in the notice will mean the school has broken the rules in the academies financial handbook, making it eligible to have its funding stopped. If that happens, it will have to move to a new sponsor.

In a letter to Berwick, which is part of a single-academy trust of the same name, ESFA academies and maintained schools director Mike Pettifer warned of concerns “in relation to the weak financial position and the governance and oversight of financial management at the trust”.

He also warned of a “lack of pace in improving governance and the oversight of financial management by the board”.

Under the terms of the notice, the school has had most of its spending powers suspended, meaning it must run a lot of its decisions past the government.

It must also commission reviews into governance and financial management, revise its recovery plan and consider joining a multi-academy trust, among other conditions.