Public Accounts (PAC): Academies Sector Annual Report and Accounts 2019/20

The COVID-19 pandemic has had a significant impact on the academies sector. The interventions and financial support implemented by the Department in response to COVID-19 occurred during the reporting period and as such the impact of this is included in the financial statements.

Despite the current challenges faced by the sector, the financial stability continues to improve. This is due to work being done to improve the financial structure in the sector as part of the support we continue to provide to ATs and actions we have taken to improve financial management. Furthermore, some ATs will have incurred lower costs during the reporting period as a result of closures during lockdown. All of these factors have contributed to fewer academies being in deficit at the end of 2019/20 compared to the previous year.

The sector has continued to grow, both in terms of the number of pupils it educates and the number of academies within it. Almost 80% of secondary schools are academies and a number of local authorities are close to full academisation. The trend of decreasing numbers of trusts over recent years is a result of more academies joining or coming together with other academies to form multi academy trusts. This reflects the direction of travel that both this government and I personally support, because we believe that schools are strongest together.

These accounts are illustrative of our commitment to financial transparency. The Department has continued to support trusts in deploying appropriate controls over their expenditure, encouraging increased transparency and accountability. We introduced measured controls over related party transactions in 2018/19, designed to ensure these transactions represented value for money and due propriety. Accordingly, I can report that both the number and value of related party transactions has decreased in 2019/20.

I am extremely grateful to staff, governors, volunteers and pupils for their continuing commitment in these challenging times, and for all their hard work and achievements in the 2019/20 academic year.

Baroness Barran, Parliamentary Under Secretary of State for the School System

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Sector Response

Dr Mary Bousted, Joint General Secretary of the National Education Union, said: 

“This is a very timely report which shows us, ahead of the White Paper, that the Government’s plans for a fully academised system are based on spurious claims about the benefits of multi-academy trusts (MATs).

“The report makes all too clear that these plans are likely to be both unworkable and damaging. The rationale of the academy system – based on competition between chains – means there will always be schools that are left unsupported. Yet, as the report sets out, there will also be academy chains that are too big to fail, meaning the government will continue to pump money into the coffers of big-name MATs and into a system that is dysfunctional.

“It is incredible that the Government is still unable to get a hold of the rocketing pay of academy chief executives. While schools are forced to tighten budgets and cut back on key areas, this is nothing short of a disgrace.

“The report also makes clear that there is a deficit of both accountability and transparency in the academies system. The government now likes to refer to ‘families of schools’, despite being responsible for tearing those families apart over the past twelve years. This is a clear effort to distract from the reality of academisation: pushing schools into a top-down corporate structure has left staff, parents, pupils and communities with less of a voice and little say over the future of their school. Top-down reorganisations that increase private involvement in state services is something the public does not want to see.

“Following the pandemic, there are a clear set of priorities in education that the government should be addressing. Whether it be funding, curriculum, education recovery, tackling the increasing levels of child poverty, or the crises in teacher recruitment and retention, one thing we can be sure of is that massive and unnecessary structural change is very far down the list. Indeed, there is no place whatsoever for such ideological obsessions.”

Geoff Barton, General Secretary of the Association of School and College Leaders, said:

“We agree with the PAC’s recommendations that the Department for Education should provide better information about the variation in the financial health of academies, the criteria it uses to support the financial recovery of trusts, and instances of failed leadership. We also agree that the DfE should be clear about its plans for full academisation in its forthcoming schools white paper. These are all important steps in a robust system.

“However, we would emphasise that the vast majority of academy trusts are financially very well run and fully comply with the vast number of requirements which already exist in terms of reporting financial information. Furthermore, trustees think very carefully about the appropriate level of pay for trust leaders and recognise the importance of being able to demonstrate value for money against rigorous performance targets.

“We understand the concern raised by the PAC about the need for greater transparency over the financial information that multi-academy trusts are required to publish for each school in their trust. But it is also important that any further accounting requirements are proportionate and not unduly excessive in terms of time and bureaucracy.

“The PAC is right to voice concerns about the condition of the school estate and the continuing threat posed by asbestos in school buildings. Much of the school estate is relatively old and is in urgent need of significant remedial work which includes the phased removal of asbestos. The funding made available by the government for capital spending is nowhere near enough, and the longer this is not addressed the greater the problems will become. Children, young people, and the staff who teach and support them deserve better.”