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Multi-academy trusts report record-breaking financial surpluses but sector warns caution

A new academy survey shows academies in the North West boosted their surpluses during the Covid pandemic.

The 10th annual Kreston Academies Benchmark Report has revealed that the average in-year financial surplus for a multi-academy trust (MAT) doubled to more than £460k in 2021 up from £221k in 2020.

Overall, this equates to a 94% uplift per academy from 2020 to 2021 – representing the sector’s highest ever surplus.

Academy trust cash balances have been bolstered through the injection of government funding earmarked for Covid testing, education catch-up programmes and other Covid-related costs which schools have not yet had the time or capacity to spend due to the pandemic.

The surpluses have also been strengthened by the cancellation of exams and the reduced costs associated with utilities, staffing and maintenance due to schools not being fully open during lockdown. These surpluses will be needed to fund the recovery effort.

Pam Tuckett, chair of Kreston International’s academies group and head of education at accountants Bishop Fleming, said: “There’s no denying that on paper, multi-academy trusts have had a record-breaking year in terms of their financial health. But the story behind the data reveals a much more complex picture.

“Government funding to cover Covid testing, additional staffing and other costs relating to the pandemic have largely not been spent as time constraints saw existing school staff bear the burden of introducing new measures to support pupils and tackle the spread of the virus. This money will be swiftly invested to address the colossal toll the pandemic has had on pupils’ education and wellbeing.

“Additional spending resulting from rising inflation, soaring energy prices and the increased cost of plugging staff shortages will rapidly eat into financial gains across the sector too.”

Philip Griffiths, partner and head of academies at Mitchell Charlesworth, which is one of the contributing firms to the report added: “The findings of the report challenge the narrative that Covid pressures have squeezed budgets for academies in the North West, but the reality is that each academy is facing its own individual challenges ahead. Academies are dealing with issues like delayed expenditure on maintenance and educational support, as well as continuing Covid related issues. The findings give a distorted view of what is really going on in the sector, and over the next 18 months, we will really see the impact on Covid and the spending associated with it.”

The report shows primary academies have fared less well than secondary trusts or MATs, with average surpluses at just £14k in 2020/21. It is likely that this smaller surplus reflects the costs primary schools have incurred in managing the administrative burden of Covid-19 and being open to more pupils for a longer period of time during the pandemic.

Interesting figures from other areas of the report include:

Staff costs

Staff costs as a percentage of total costs remained static for the 2021 academic year, with the average across all schools only moving up by 0.1% to just over 75%. The average for secondaries continued to creep up, as it has done for the last 8 years. This position could change significantly in 2021/22.

Pam Tuckett, chair of Kreston International’s academies group and head of education at accountants Bishop Fleming, said: “Schools face difficulties in finding suitable staff with shortages likely to result in higher salaries, particularly for learning support staff and supply cover.

“There’s also the potential for an education skills drought as all schools rush to spend catch-up funds on a limited pool of highly skilled people needed to support pupils’ mental health, academic and physical needs as the recovery programme ramps up.”

The growth of MATs

MATs have continued to grow in the last 12 months, with the average size of a trust increasing from 6.8 schools last year to 7.5 in 2020/21. Nearly 65% of trusts reported expected growth in 2022/23 too, with 57% forecasting up to three additional schools joining their group.

Leora Cruddas CBE, chief executive of the Confederation of School Trusts, said: “The fact that MATs have expanded over the last 12 months of Covid disruption is testament to the huge amount of work and effort trusts and schools have put in to supporting this while juggling many other priorities.”

3-year financial forecasting

61% of trusts predicted their reserves will be lower in three years’ time and just 14% of trusts were confident they would remain the same.

Pam Tuckett, head of education at Bishop Fleming, said: “We found that trusts with a maximum of 10 schools were much more likely to expect reserves to have reduced by 2025 than those with 11 or more schools, reflecting the economies of scale achievable in a larger trust.”


97% of trusts are now partly or fully centralised, where tasks such as finance, HR, estates and school improvement are managed by the trust rather than its individual schools.

Pam Tuckett, head of education at Bishop Fleming, said: “The benefits of centralisation are more apparent the larger the trust becomes, but investment is needed in the IT and team to deliver back office functions centrally.”

Below is some of the other interesting data from the report:

  • There has been an 11% increase in the average surplus for trusts comprising a single secondary school and a small reduction in the average in-year surplus for single academy trusts overall
  • The number of trusts with in-year deficits (19%) has halved since 2019 and trusts showing a cumulative deficit position have dropped for the third consecutive year to just 3.8% in 2021 from 8.2% in 2019
  • The percentage of academy trusts GAG pooling, where funds are collated from all schools in the group and distributed centrally according to need, has risen from 11% in 2020 to 14% in 2021, showing that they are in a small but growing minority

Published annually by Kreston International’s academies group, the report is a financial state of the nation survey of over 300 trusts representing over 1,500 schools, including schools in the North West. The survey covers the 2020/21 academic year.

Click here to download the full Kreston Academies Benchmark Report.