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Entire academy sector could 'face insolvency'

Entire academy sector could 'face insolvency'

New figures have suggested that academies are having a bad time financially. Figures from accountants have suggested that academy budgets are in an even worse state than council-run schools, with eight out of ten in deficit. 

The Kreston UK Accountancy network has said that two more years of poor budgets could see the entire sector face insolvency. Kreston is 'a global network of independent accounting firms.' The Kreston UK report analysed data from 450 schools which are all audited by accountancy firms within its network. The authors of the report have said that the schools analysed give a representative sample of academies in England.

The figures from the network show that for the year ending 31st August 2017, 55% of academies were deficit, and this figure rose to 80% when the depreciation of buildings and equipment was taken into account.

The Government has disputed the findings of the report.

 

The report claims that staff make up 72% of all costs in the academies sampled and that future redundancies could be inevitable.

 

The author of the report said "Accountants can work with governors to help them save every last penny possibly, but without significant increases in public funding, this could become a full-blown crisis."

Nick Cumore, the author of the report, also said that schools were already doing everything in their power to save money: "Schools are doing everything they can to save as much money as possible; cutting back on staff, replacing experienced teachers with less qualified people and going cap-in-hand to parents, but it still isn't enough to avoid overspending."

 

This latest report comes just a day after the independent think tank, the Educational Policy Institute, also released research which found that over a quarter of council-run schools are in deficit. The Government has also disputed this research, claiming that standards were 'rising.' A spokesperson from the Department for Education said "We do not recognise these findings. The fact is, thanks to our reforms and the hard work of teachers, standards are rising in our schools."

 

Do you think these reports accurately represent the financial situation of schools in the UK? Tweet us your thoughts @speakerpolitics

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