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Accountant’s spotlight on academies

James Cowper Kreston probes schools

Accountant’s spotlight on academies

Accountancy firm James Cowper Kreston has released its Kreston Academies Benchmark report. Now in its eighth year, the report is the largest independent survey of the financial health of the academy sector, surveying 350 trusts, representing nearly 1,000 schools.

For 2019, the report puts a spotlight on the state of deficit for academy schools, with 85% showing a deficit when depreciation is included.

While the size of deficits has decreased overall, the report advises that it will be difficult to reduce future spending any further.

There is the significant risk that, without change, trusts will run out of funds in the next five to six years.

Eighty per cent of responders noted two risks to their schools which were top of their risk registers:

  • Risk of changes in government funding making the school financially unviable
  • Risk of changes to pay and conditions that are unfunded

The report mentions how these, along with other financial constraints, detract from the improvement of ‘educational and pastoral outcomes, which many would think should be the primary focus’.

The report doesn’t focus only on the negatives surrounding the sector; it discusses the improvement in governance and financial management as the academy sector matures.

With more schools joining existing MATs the report links this with overall growth in the last 12 months.

James Cowper Kreston head of academies Darren O’Connor said: “The Benchmark Report is an invaluable resource for the academy sector.

“Providing an in-depth analysis, it allows us to understand the health of academies and the wider sector as a whole, ensuring that we, as accountants, are well informed when working to assist these schools.

James Cowper Kreston are currently based at Overbridge Square, Hambridge Lane, Newbury, and will be moving to new offices in Greenham Business Park.

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