A 24-school academy trust has been handed “exceptional financial support” after running up a £6 million deficit, including after buying iPads for its staff and pupils.
The Arthur Terry Learning Partnership has blamed the economic landscape for its failure to to balance budgets. It was issued a notice to improve earlier this month.
Accounts show the trust racked up a £6 million in-year deficit 12 months ago after being stung by energy price hikes, “significant” supply staff costs and changes to contracts on computers.
The trust has already appointed an experienced government cost-cutter to its board and drawn up plans for “efficiency savings” across its academies.
Stephen Morales, the chief executive of the Institute of School Business Leaders, said the case “definitely demonstrates the extent of the challenge schools and trusts face.
“[It’s] a trust of a significant size, so I’d suspect it would have exhausted all the opportunities to benefit from economies of scale and remove any duplication of effort.”
‘External factors beyond anticipation’
Arthur Terry’s accounts reveal an “in-year deficit on revenue reserves” of just over £6 million. This included unexpected costs “influenced by external factors beyond anticipation”.
It also purchased devices, as part of an initiative called Learning Futures, to provide 11,000 iPads for all pupils and staff.
“Due to inflationary increases in device costs, the funding route changed mid-year from an operational lease arrangement to purchasing through capital expenditure,” accounts read.
“As a result, and against plan, the full cost of the phase 2 devices were accounted for in full in-year.”
Papers added that medium-term projections suggested the trust would have “a small surplus…over the next three years”.
But the notice to improve states Arthur Terry was in breach of academy rules as it was “unable to approve a balanced budget for 2023-24”. The Education and Skills Funding Agency has since provided “exceptional financial support”, but would not say how much.
The notice stated “plans to secure further savings across all the trust’s schools” were in place.
‘Complex and sector-wide’
In a letter to parents Richard Gill, its chief executive who also chairs the Teaching School Hubs Council, said the financial situation was “complex and sector-wide”.
“The deficit is the result of a variety of factors including climbing energy and catering bills, staff costs, inflation and our determined commitment to support all children including those who need it most in what remain complex times.
“While we have taken proactive measures to mitigate these issues and, indeed, have made significant progress, the current financial landscape presents challenges.”
The Kreston Group of accountancy firms found earlier this year that nearly 50 per cent of trusts dipped into their reserves after racking up deficits in 2022-23, up from 19 per cent in 2021.
Arthur Terry added that it had conducted “a thorough review of our budgetary practices and have submitted a clear, robust and realistic recovery plan where we will see improved performance over the next three years”.
Former national schools commissioner Sir David Carter is listed as one of the trust’s three serving members.
The notice, published last week, was the first to have been released since the election. It’s one of four issued this year.
It also stated the government “recognises this may be an uncertain time for the trust” and its employees, and asked leaders to “ensure appropriate provision is in place to support all its staff, as necessary”.
