MAT finance leaders urge Labour for increased school funding

Multi-academy trust (MAT) finance leaders have made a strong appeal to the new Labour government for increased support as they navigate financial challenges ahead of the 2024-25 academic year. This call comes in response to findings from the MAT CFO Insights Survey conducted by IMP Software.

Critical concerns highlighted by the survey include the need for multi-year funding settlements, increased budgets to meet rising costs and staff pay awards, and higher, fairer funding for Special Educational Needs and Disabilities (SEND) provisions. These issues were raised by the 101 respondents who participated in the June survey.

The survey results revealed that nearly a third of respondents described their trust’s financial position as unhealthy or extremely unhealthy, with 58 identifying their trust as financially vulnerable. Additionally, 79 trusts have had to dip into their reserves over the past 12 months to cover costs, with 43 out of 53 respondents anticipating this will continue.

For the 2023-24 academic year, 62 respondents expect their trust to incur an in-year deficit, with the same number indicating that their financial forecast is worse than initially projected. Of 51 respondents, 40 foresee a further deterioration in their trust’s financial position.

Rising staff costs were a significant concern for MAT finance leaders, with 99 out of 101 respondents identifying this as a primary issue. The majority of respondents indicated that they could presently afford only a 2% teacher pay award for 2024-25, and similarly for support staff. An overwhelming 89 respondents stated that the current funding announced for 2024-25 is insufficient for their trust's needs.

Ninety-six MAT representatives reported inadequate funding for necessary SEND provisions, and 70 indicated they have capital works they cannot currently afford. As a result, trusts face reducing staff through natural attrition, non-replacement of leavers, restructures, and redundancies. They are also considering cutting non-essential spending, curriculum budgets, interventions, and support services such as counselling and pastoral care. Trusts are planning to increase class sizes and remove specific subjects due to a lack of teachers, while also reducing funding for SEND and alternative provisions.

MAT finance leaders reported using reserves to cover budget deficits despite these reserves having been previously allocated. Trusts are delaying or cancelling building repairs and maintenance, limiting resources for learning and enrichment activities, and enacting recruitment freezes and budget reviews.

Will Jordan, Co-Founder of IMP Software, commented on the survey findings: "Our survey outlines several financial challenges faced by trusts, particularly around fair funding, increased costs, salary pay awards, SEND and high needs funding, and capital funding. The difficult decisions being taken by trusts are being driven by funding shortfalls, resulting in significant impacts on the quality and breadth of education and support services provided. Reserves usage is increasing, but this is not a sustainable long-term solution."

Jordan further explained that MAT finance leaders are implementing various strategic measures to improve their financial position, including centralising operations, GAG pooling, and increasing class sizes. Despite these efforts, there is a clear call for increased government funding to address real-terms cuts and inflationary pressures and to support pay increases.

The survey asked trust leaders for their single biggest ask of the incoming government to support MAT financial sustainability. Responses overwhelmingly stressed the need for increased, stable, and equitable funding to meet the growing demands on schools, particularly regarding staff pay and SEND provisions.

The MAT CFOs call on the new government to address several key issues: funding stability to allow for better financial planning, increased funding to match rising costs and pay awards, fair funding for SEND provisions, equitable funding allocation to address disparities between schools, improved capital and revenue funding, and simplifying funding processes alongside legislative reforms.