Fears that many academy trusts are confronted with the prospect of insolvency

Blog Insolvency

Latest research has raised concerns that academy trusts are coming under significant financial pressure.

Education in the UK has been transformed in recent years, with institutions across the country choosing to leave local authority control and converting to academy status.

But while this transition affords schools much greater autonomy, there are mounting worries about the financial position of many of the trusts involved.

A document published only this week suggested that the number of trusts with in-year deficits rose to 55 per cent in 2016-17, up from 42 per cent in the previous 12 months.

When the depreciation of assets is taken into account, the extent of the strain is even more apparent.

Some of those academies under the greatest pressure have resorted to requesting financial support from parents, or have imposed cuts to staffing and the curriculum.

But there are concerns that the difficulties facing the sector continue to grow and that ultimately only support from the Government will safeguard its future.

The Kreston Academies Benchmark report said: “Given that we are already nearly halfway through the financial year and our clients are telling us that there is no evidence that the situation has improved then it is hard to draw any other conclusion than the sector will run out of money fairly quickly.”

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