One of England’s biggest academy trusts has walked away from a long-planned merger with a struggling chain, sparking concerns that the worsening funding landscape is going to scupper more schools getting support.
Bath and Wells Diocesan Multi Academy Trust bosses revealed this week it does not have enough funding to absorb Beacon Education’s six schools without impacting its current primaries.
It comes after Beacon was handed almost £500,000 to prop it up and surveys uncovered “capital needs” across the chain.
Lucia Glynn, an academy consultant, said the case highlighted how funding pressures deterred some trusts from stepping in to improve underperforming schools.
Trusts ‘tightening the belt’
“Trusts are having to tighten the belt more and more and can’t take risks any more, they can’t even say ‘for a couple of years, we will subsidise this trust’. They don’t have the flexibility within their budgets.”
The Department for Education approved the proposed merger following an advisory board meeting last January. Minutes show Bath and Wells’s due diligence “identified capital needs at Beacon schools”.
To “support these needs an application will be made to the strategic school improvement capital budget”.
The fund is used to secure sponsors for underperforming schools in cases where the condition or suitability of premises are a “significant barrier” to agreement.
At the time, Beacon’s Ofsted outcomes were ‘poor’, according to the minutes, with one academy in special measures and two deemed to be ‘coasting’. One of the ‘coasting’ schools has since been rated ‘good’.
Beacon’s latest accounts state “it is reliant on additional ESFA funding to be able to continue to operate”. So far, it has been given £495,000 “to support short-term cashflow requirements”.
The trust has also introduced strategies – such as staff redeployments and mixed-year classes – to “reduce in-year deficits”.
Pamela Cosh, Bath and Wells’s chair, said it had become clear that the “level of funding for us to achieve this [the merger] was not available”, with it “mindful” of its “responsibility to our existing schools”.
More merger caution?
“While we appreciate the steps the DfE has taken to try to address this shortfall, unfortunately the trustees have had to make the very difficult decision to step away from continuing to work with Beacon.”
Bath and Wells runs 45 schools. A primary-only MAT, it had just under 9,000 pupils on roll as of last August.
Stephen Morales, the chief executive of the Institute of School Business Leadership, believes the trust merger landscape is complicated by the funding available.
This could lead to MATs “becoming more risk averse… especially where that merger involves larger-scale deficit recovery or capital and condition issues”.
This could be “compounded” by the government scrapping trust capacity funding (TCaF) last year. It is understood, however, that Bath and Wells’s decision was not affected by the removal of TCaF.
Beacon is not large enough to qualify for annual allocations of capital funding. Instead it applies for building cash through the condition improvement fund (CIF).
Of the 4,363 schools eligible for CIF, just under half applied for cash last year. Only 866 projects were approved, with £450 million awarded.
This is a near 60 per cent fall since 2020-21 when ministers gave 2,104 schemes more than £563 million.
£14bn maintenance backlog
Dr Jonathan Dewsbury, the Department for Education’s director of education estates, revealed in October that Labour had ordered a review of the system for issuing capital funding.
He noted that for “those small trusts that access CIF, it’s perhaps too complicated and not in some places as accessible as it needs to be”.
A National Audit Office report earlier this year revealed a £13.8 billion backlog in maintenance.
It cited several reasons, including historic under-investment, cost increases and inflation. Many buildings have also reached the end of their operational life.
A Beacon spokesperson noted that while the pulling of the merger “represents a shift in our immediate plans, it is important to highlight the significant progress made across our schools”.
A recent monitoring visit to Danesfield, a Beacon school in Somerset rated ‘requires improvement’ three times in a row, praised “strengthened leadership, curriculum enrichment, and the level of support from the trust”.
It was “working constructively with colleagues from the Diocese of Bath and Wells and DfE to consider options for long-term and sustainable future partnerships”.
