A 24-school academy trust that racked up seven-figure losses after paying for iPads for staff and pupils has been offered a £1.5 million loan from government to keep it afloat.
Department for Education officials gave the Arthur Terry Learning Partnership the chance to withdraw the cash through a so-called “draw-down facility” to help it “pay debtors on a timely basis”.
Having raided reserves in 2022-23 to pay for staff and pupil iPads and soaring energy prices, among other things, it was given a notice to improve after posting an almost £4 million deficit last year.
School business manager Hilary Goldsmith believes the case shows some trusts have become too big to fail.
“I’d imagine re-brokering those schools would be virtually impossible,” she said. “[But] I would be concerned that large amounts of money… are being loaned to schools who aren’t able to meet their financial aims.”
Trust amassed deficit of £6m
Accounts for 2022-23 showed Arthur Terry racked up a £6 million “in-year deficit on revenue reserves” after being stung by energy price hikes, “significant” supply staff costs and changes to contracts on computers.
It also purchased devices, as part of an initiative called Learning Futures, to provide 11,000 iPads for all pupils and staff. The DfE subsequently issued it with a notice to improve, which mentioned it had been given “exceptional financial support”.
Latest accounts, published this week, show that help came in the form of £1.5 million loans from a department “draw-down facility”.
“While the full [£1.5 million] facility was made available, only £1 million has been used as to date,” documents state. “The ESFA are providing financial support to ensure that the partnership can continue to pay debtors on a timely basis.”
Arthur Terry bosses “have every expectation that sufficient further funds will be received”, with discussions “active regarding additional draw-downs” this year. Repayments will “start in September 2026” and last three years.
The trust now has an overall deficit of about £3.9 million, despite having a surplus of £1.9 million 12 months earlier.
Case ‘shows extent of challenge’ facing schools
The trust blamed the “social and economic climate, including political changes, inflation, the cost-of-living crisis, mental health concerns, and funding cuts to social services” for the issue.
Institute of School Business Leaders CEO Stephen Morales warned the case “demonstrates the extent of the challenge schools and trusts face”.
Arthur Terry, whose chief executive is Teaching School Hubs Council chair Richard Gill, noted its projections suggest “that whilst a deficit is predicted for two years, a small surplus is expected over the next three years”.
It is implementing “a number of staffing measures, reviewing and reducing its cost base throughout the organisation, and maximising” commercial and sponsorship income.
But there are “there are no planned redundancies within those measures”. The DfE has also “stated its trust and confidence around ATLP’s leadership, governance and the strength of our three-year recovery plan”, a spokesperson said.
“The ATLP is a strong and respected multi-academy trust. We have made significant progress in reducing the deficit and are working closely with the DfE to deliver a balanced budget as soon as possible.”
Arthur Terry also took on three schools in 2024, with the last of them officially joining days before the notice to improve was issued.
One leader, who sits on a DfE advisory board that considers MAT growth plans, questioned how much scrutiny is paid to finances when “a trust is a strong one by reputation”.
“Asking a trust if there’s anything that they’ve found in-year that’s causing them problems with management accounts or balances that they want to tell us [could be something to do.”
