Question to the Department for Education:

To ask the Secretary of State for Education, whether her Department is providing support for academy schools facing financial difficulties.

The primary responsibility for the financial oversight of academy trusts rests with the trustees themselves, supported by the financial management and governance requirements set by the department in ‘Academy and free school funding agreements’, which is available here: https://www.gov.uk/government/publications/academy-and-free-school-funding-agreements, the ‘Academy trust handbook 2024’, which is available here: https://www.gov.uk/guidance/academy-trust-handbook/academy-trust-handbook-2024-to-print, and ‘Academies Accounts Direction’, available here: https://www.gov.uk/guidance/academies-accounts-direction.

Academy trusts are delivering a high standard of financial management and governance, and the latest published data shows that 98.2% of trusts had a cumulative surplus or a zero balance.

The department supports all schools to manage their resources effectively by providing high-quality advice, support and development to help them protect against financial difficulty. Where academy trusts are experiencing significant financial difficulty, we are clear that our starting approach will always be to have a supportive conversation to explore the challenges trusts are facing and suggest the practical ways we may be able to support them.

The department can also provide additional financial support to academy trusts where required. This support might be a short-term advance to enable the trust to manage cash flow effectively over a period up to 12 months, or longer term support that aims to both prevent financial failure in the short-term and secure the trust’s long term sustainability. Additional financial support may be subject to conditions, but we are clear that our focus is on considering how we can support academy trusts. The guidance ‘Financial support for academy trusts in financial difficulty’ is available on GOV.UK and can be accessed at: https://www.gov.uk/government/publications/financial-support-for-academy-trusts-in-financial-difficulty/financial-support-for-academy-trusts-in-financial-difficulty. It sets out the types of support the department may provide, the eligibility criteria and potential conditions of financial support.