Question to the Department for Education:

To ask the Secretary of State for Education, what steps his Department is taking to provide financial support to schools that are in deficit.

The department is working with the sector to continue building capacity and expertise in financial management, particularly the prevention of a deficit. This includes supporting effective school resource management in trusts with three-year financial forecasting and developing buying hubs and recommended deals for all schools. We are also continuing to work with local authorities, as appropriate, to help them identify potential financial health issues and support schools. We have worked with them to understand how they work with maintained schools, share good practice and use the financial data available to them.

In particular, the Education and Skills Funding Agency (ESFA) have introduced Schools Resource Management Advisers (SRMAs) to provide help and support to trusts and maintained schools. SRMAs are sector experts who will work with schools and trusts to provide tailored advice on how to make best use of their revenue and capital resources, and reduce non-staff spend, to deliver educational outcomes and contribute to whole-school improvement, prioritising those schools which will benefit the most.

In the case of academy trusts, an academy trust having an in-year deficit is not in and of itself a negative thing. Schools can draw on their reserves for a range of planned and sensible reasons, for example, to spend on capital projects or whole-school improvements. This is prudent financial planning and not at the expense of educational delivery. The academies sector is stable with fewer than 2% of trusts subject to a Financial Notice to Improve.

Where an academy trust does require additional support to manage a deficit, the ESFA will work with them to help them reach a stronger position. Where there is a risk to public funds, the ESFA will intervene in a way that is proportionate to the risk and preserves education provision. This can include issuing an Financial Notice to Improve, or in the most serious cases, termination of the Funding Agreement.