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A survey of trust finance leaders found nearly a third described their organisation’s financial position as “unhealthy” or “extremely unhealthy”.
Of the 101 leaders who responded to the poll, 62 said their trust was predicting an in-year deficit for 2023-24 and the same number reported that their forecast was worse than projected at the start of the year.
First established in the early 2000s by the Blair government, there are now over 1,300 multi-academy trusts across England, each running between two and 90 schools.
The vast majority of academies are part of a multi-academy trust such as United Learning, Reach2 and Delta Academies Trust, with only around 11% operating as single-academy trusts.
According to the survey, which was carried out in June by IMP Software, the biggest financial pain point for trusts was rising staff costs, with only a third of finance chiefs believing a 3% pay rise for teachers would be affordable on current funding levels.
Almost all respondents said their trust did not have enough funding for the SEND support it had to provide, and 70% had capital works they needed to do which they could not afford.
As a result, trusts were facing the possibility of staff reductions, increased class sizes and the cutting of support services and alternative provision.
More and more are pooling the general annual grant (GAG) allocated to schools across the trust in order to protect those that are financially weaker or to better target additional resource.
A report earlier this year found nearly half are now pooling reserves, with a fifth pooling GAG before allocating it to individual schools.
Although the trend has proved controversial, trusts say it allows money to be shared more equitably and, in some cases, is the only way for small rural primary schools to survive.
Will Jordan, co-founder of IMP Software, said the survey shone a spotlight onto the financial challenges faced by trusts, particularly around salary pay awards, SEND and high needs funding, and capital investment.
“The difficult decisions being taken by trusts are being driven by funding shortfalls, resulting in significant impacts on the quality and breadth of education and support services provided,” he said.
“Reserves usage is increasing, but this is not a sustainable long-term solution.”
Although trusts had put strategic measures in place to strengthen their financial sustainability, there were calls among trusts for more government funding to address real-terms cuts and inflationary pressures and to support pay increases.
“Overall, the responses emphasise the need for increased, stable and equitable funding to meet the growing demands on schools, particularly concerning staff pay and SEND provisions,” said Jordan.
Schools also required better capital funding for infrastructure improvements and maintenance, with funding aligned with inflation and sufficient to cover all necessary revenue expenses, he said.
