Small academy trusts told to use reserves to fund urgent safety repairs

Schools with identified RAAC are being urged to put contingency plans in place in case of closure by the DfE

The government has warned small academy trusts and sixth form colleges they will be denied funding for urgent health and safety repairs if they could use their own reserves instead.

The Department for Education published revised guidance on “urgent capital support” (UCS) funding today, tweaking eligibility rules.

The UCS pot is earmarked for “urgent condition issues that threaten immediate school closure”, which cannot wait for the next condition improvement fund (CIF) application window. Examples include structural and electrical issues, asbestos, leaking roofs, boiler and pipework failures.

It is reserved for standalone academies, multi-academy trusts with fewer than five schools or 3,000 pupils, sixth form colleges and certain voluntary aided non-diocesan schools. Larger multi-academy trusts and local authority maintained schools receive funding through separate routes.

Guidance has always stressed the need for trusts and colleges to “manage their funds appropriately and plan contingencies”, and the fact multi-academy trusts should manage through their annual condition funding, reserves and insurance.

But the new version adds several new references to trusts’ reserves.

One new addition states: “Where it is determined that a trust can afford to fund the work via reserves, they will be expected to fund urgent projects independently, and are likely to have their applications declined.”

A request for all applicants to provide up-to-date financial information, and a new template for doing so, have also been added.

It is not the first time the government has called on schools to make more use of their reserves in the past year.

School standards minister Nick Gibb said late last year schools and academies had £4bn of cumulative reserves, and the government expected them to be “used first” before schools in financial difficulty asked it for extra cash.

It came in response to calls from Labour for more funding for schools to meet extra costs as a result of the pandemic, from cover for staff absences to sanitisers and signage.

Schools Week also reported earlier this year on the mixed impact of Covid on school finances, with some large trusts boosting their reserves by saving money on utility bills, exam costs and other areas during lockdowns.

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