Tag Archives: acconts

Understanding Academy Finances

Posted on by
Reply

Recently, I came across a new study into the income and expenditure of academies by Xeinadin https://www.xeinadin-group.com/industries/academies/ When following up on that report, I also came across another and lengthier report from Kreston Reeves https://www.krestonreeves.com/news/academies-benchmark-report-2021/ published last month.

Both are interesting in their own ways. However, neither accounts clearly for the fact that there are different pay areas within the School Teachers’ Pay and Conditions Document and the annual recommendations from the School Teachers Review Body. Now, these differences do not matter when percentages are used, but comparing on cash figures may introduce some distortion in the outcomes if the difference between MATs in Inner London and those outside the London and Home Counties pay band areas are ignored, although the Kreston Reeves report does have some regional benchmarking data for six areas of England. Whether lumping together London and the South East and seemingly totally ignoring the East of England is helpful is a matter for the reader to decide.

Neither report considers the labour market for teachers nor the costs associated with it in detail, although there are discussions about both staff and supply teacher costs. Future reports might like to focus on both the costs of retention over recruitment, and the most cost effective ways of recruiting new staff.

I was interested to read in the Kreston Reeves report that:

“The full financial impact of the pandemic will not be known for a while yet. As schools went back in to another lockdown in January 2021, then the savings made in the first lockdown can perhaps be expected to recur, although as there are much higher numbers of key worker children in schools post Christmas, these savings are likely to be more modest. Where this leaves the Academy sector finances for the current academic year is anyone’s guess. The length and frequency of lockdowns, the criteria for allowing children into schools, and the education provided will all have an impact.” (Page 10)

Both reports discuss the matter of how much of a school’s budget is used for central costs of a MAT. They both seem to coalesce around a figure of 5%, although some MATs do seem to operate with either a much higher or lower percentage.  

The fact that academies are on a different financial year to local authority schools isn’t an issue for these reports, but is something that makes comparisons between the different types of schools more difficult, especially over a short-period of time.

How schools receive and spend their income is a matter for public interest, and these reports are helpful, in as far as they go, in understanding the academy sector, and especially the behaviours of MATs.

As most readers of this blog will know, I personally, prefer schools to be under the democratic oversight of locally elected councillors, albeit with a significant degree of autonomy. The fact that some schools have access to considerable letting income while other schools struggle to educate challenging groups of pupils on far less financial support is but one reason to ask for a system designed to benefit all pupils and not just some.

Teacher Recruitment: How much should it cost to advertise a vacancy?

Posted on by
4

As someone that chairs a private limited company operating in the field of teacher recruitment, I always read the annual accounts published by the owners of the TES Group with interest. The latest, just released, provide details for the year up to the 31st August 2019, so aren’t all that recent. Normally, the annual accounts for the previous year appear on the Companies House website sometime in the following May. However, the accounts for the year up to the 31st August 2019 have only recently appeared.

The Group now files its overall Group accounts under the name of Tes Topco, for anyone interested in reading what has happened since the group was sold by one American Group to another.

I can sympathise with the directors. The bottom line for 2018-19 was a loss across the business, after everything, including finance costs, were taken into account, of some £67,000,000. That’s a chunky loss on revenue of less than £100 million, and was generated well before covid-19 affected the teacher recruitment market.

The ‘Attract’ part of the business – basically the on-line recruitment part of the Group, and once the jewel in the crown – registered a decline in turnover compared with the previous year, to around some £61,000,000. It isn’t possible to work out how much of this revenue came from schools in England, how much from schools elsewhere in the United Kingdom and how much for overseas.

However, let’s say schools in England paid upwards of £40,000,000 for what they could obtain for free from either TeachVac or the DfE vacancy website. Interestingly, as far as the TES was concerned, point of sale advertising revenue continued to decline in favour of subscriptions by schools.

This part of the business is supported by the large pool of teachers visiting the site to hunt for a job. Now that teachers are not a scare commodity, will schools want to renew their subscriptions? What happens if jobseekers divert in large numbers to either the DfE site or TeachVac? Is they do, why would schools continue to use the services of the TES job board?

An interesting question is whether the loss per teacher incurred by Tes Topco is anywhere near the level incurred by TeachVac? At present, TeachVac costs less than £3 per vacancy advertised to operate. You can do the maths for the Tes on say £40 million in revenue and possibly, being generous, 70,000 vacancies advertised by schools in England in 2018-19.

Looking forward to the effects of covid-19 on schools, the accompanying report estimates a loss on the vacancy and supply teacher part of the business of some £8 million. This assumes, as at present is the case that schools return for the autumn term, and there is no more lockdown across the board. The latest announcements for the autumn about what might happen do try to protect schools, but I am not sure that these measures will encourage schools to enter the teacher recruitment market unless absolutely necessary.

If TeachVac costs £3 per vacancy, and the DfE can spend anything it likes to keep its vacancy site alive, what future is there for an expensive paid site in England, regardless of whether schools pay for each vacancy advertised or take out a subscription?

I wonder if there is now more value now in the other parts of Tes Topco’s business than in the ‘attract’ part, even though it still dominates the revenue stream for the business.

First Swallow?

Posted on by
Reply

The Diocese of Bristol must be one of the first multi-academy trusts (MATs) to have posted accounts for the financial year 2017-18 on the Company House web site. At least, it is the first one I have come across. These account cover the year from September 2017 to August 2018, and thus follow the academic year. This is unlike accounts for maintained schools that follow the financial year from April to March.

In the past, this dual system has caused trouble with the government’s auditors for civil servants at the DfE. But, hopefully, that is all in the past.

One interesting feature to note is the five per cent overhead charge levied on schools in this MAT. There are eleven schools in the MAT and the cost to them seemingly increased from £403,000 the previous year to £486,000 in 2017-18. This charge covered physical, human, financial and legal support as well as education support and the classic category of ‘other’. From this, the Diocesan Board of Finance received £150,000 in 2017-18.

Now five per cent seems like a reasonable amount and it will be interesting to compare it with amounts levied by other MATs and paid by standalone academies for these professional services. There is also the question of how maintained schools should access these services? If schools in MATs must contribute to a central services charge, should maintained schools be required to do the same or be allowed to shop around for the best deal?

The Bristol Diocese MAT is coy in its accounts about the senior staff structure, although it has to declare the salary of its highest paid staff. There doesn’t seem anything about the gender pap gap, but I may have missed that bit somewhere during a quick read.

During 2018 the Minister wrote to MATs about excessive pay for some Chief Officers and it will be interesting to read any comments about this from auditors as more accounts are published. Will we see any significant reductions in pay or just an acknowledgement of the government trying to interfere in the running of MATs.

When more accounts emerge it will also be possible to review the amounts schools spend on those areas not covered in the DfE comparisons on the school data and performance indicators published by the DfE.

One area of concern that the accounts do highlight is the Local Government Pension Scheme, since all non-teaching staff in schools are normally entered into these schemes that are run by individual local authorities. Like most pension schemes, these have been in deficit and MATs and standalone academies have had to increase payments into the scheme to help overcome these deficits. Should the DfE now create a national scheme for these workers as they are clearly no longer local government employees? There may be an interesting debate to be had about the pension arrangements for these staff.

Until all schools are once again on a common annual accounting period there will remain two distinct groups that are difficult to compare in terms of income and expenditure. Such duality of approach is not helpful.