Question to the Department for Education:

To ask the Secretary of State for Education, what estimate she has made of reserves held by free schools in each year since 2010-11.

The table below sets out free schools operating as single academy trusts’ total cash holdings at the end of the three most recent financial years. The first free schools opened in September 2011. Academy trusts’ cash is the best representation of reserves available to trusts. Many free schools operate as single academy trusts and the department can easily identify that free school’s cash holding than the free school academy trust’s annual accounts.

The table does not include free schools operating within multi-academy trusts. As well as free schools, multi-academy trusts may include academies that opened by other routes for example as sponsored academies or by conversion from local authority maintained schools. It is the multi-academy trust that then produces annual accounts that disclose the multi-academy trust’s total cash holdings for all types of academy within the multi-academy trust. The department does not ask multi-academy trusts to disclose the cash holdings of its individual academies or free schools.

With very small numbers of free school single academy trusts open before 2013-14 it is difficult for us to discern trends in their cash holdings. We do know that the average cash held by all academy trusts has fallen over the four years partly due to many smaller academy trusts opening more recently and holding less cash. We regard all academy trusts’ cash holdings as reasonable, typically representing enough to fund one month’s operations after deducting current liabilities. Academy trusts cannot borrow and need to hold enough cash to manage their solvency prudently.