Our benchmark report said 4 in 10 academies recorded a deficit in 2015/16 while the NAHT report states “the number of schools currently in deficit has more than doubled since their 2015 survey (up 10 percentage points from 8 per cent to 18 per cent)”.
Our benchmark report highlighted that average staff costs as a percentage of total costs increased very slightly to just around 71%. The NAHT report identified “increases in payroll costs as a result of government policies were cited as schools’ biggest financial pressures. These costs went up in 2015 and have resulted in an increase to school budgets of over 5.5 per cent every year, but there has been no resulting increase in funding from the government.” The implication from this data is that academies have either made cost savings elsewhere to compensate for an increase in salary costs and/or they have restructured so their staffing structure is based on less experienced, and therefore cheaper, staff.
Our benchmark report highlighted there are noticeable reductions in the levels of spend on technology costs and maintenance costs which could indicate academies are bottling up a problem for future years. The NAHT report identified “that the most commonly reported cost saving was reducing investment in equipment, which 85 per cent of respondents said they were having to do”.
Jon Sparkes, a tax director with Bishop Fleming and with nearly 20 years' experience in advising charities and businesses on direct tax matters, has written an article on the tax issues of community enterprises and mutual…