This blog was created by J&G Marshall.

They say three is a magic number, but the ESFA’s requirement that academy trusts must provide three-year budget forecasts (instead of one-year, as previously required) may not have left MATs feeling too lucky.

Trusts must provide the DfE with ‘details of income and expenditure, as well as some capital spending and “non-cash elements’’’ by the 30thJuly. Academies that miss deadlines for ‘two or more of the annual financial returns in any year’ will be placed on a public ‘naughty list.’

The measure is supposed to reassure the DfE that MATs are planning ahead and, with worries over academy finances continuing to cast an ESFA-shaped shadow over the sector, you can’t really argue with the sentiment.

With that said, the forecast extension will no doubt be causing a few additional grey hairs for MATs which are already predicting budget deficits. That, on top of the age old question about how you can budget when the goal posts aren’t just moving but sometimes leaving the field of play all together, means that news has understandably been met with some concern.

So how do you address this requirement effectively?

  • Firstly, don’t think numbers – think governance. It doesn’t matter what your financial situation is, if you don’t have the structures in place to ensure that public money is being spent transparently and correctly then the ESFA will coming knocking on your door long before your finances reach “critical”.
  • Ensure consistency. Across a trust there should be clear guidelines as to how to set budgets. It may sound simplistic, but academies in a trust should have one rationale and one way of doing things when it comes to budget setting.
  • Be strategic, not just stressed. Three-year budget setting should encourage trust boards to think creatively about how to manage budgets. How can the trust work collaboratively to ensure greater savings? Can trusts partner with other trusts to ensure greater economies of scale? These are questions that are sometimes lost in the day-to-day management of an organisation.
  • Three-year budgets are a little like Ofsted reports. They give a great picture of what is happening at that moment in time, but things can quickly change. Make the budget something that you regularly review and discuss – don’t let it creep up on you once a year and scare you!

Finally, while academies need to be transparent about finances – the DfE needs to be transparent about why they are asking for this. Is there a hidden rationale behind this? Is the ESFA prepared for what might come back?

Our big concern is that with a clear understanding of the whys, smaller trusts may feel the pressure either grow before they are ready or withdraw at the fear of the future. As a result, the bigger trusts could be waiting in the wings to gobble up lots of smaller trusts deemed non-viable.

As with most things in life, balance really is the key. Done well, three-year budgeting forecasts could help MATs to think more strategically, giving them a chance to find opportunities to generate revenue, work collaboratively with others to bring economies of scale, and possibly to consider merging sooner and restructuring the workforce to drive as much money as possible to T&L.

Planning ahead is something we know a bit about, having introduced MAT MOTs to help trusts to identify strengths and weaknesses across key areas such as finance, risk, growth, standards and people. Typically conducted over three years, we build a deep understanding of your organisation, offering considered guidance, support and external challenge to improve performance.

If you want to find out more about how J&G Marshall help trusts achieve their ambitions, just follow this link.



J & G Marshall is delighted to be launching two free CPD events to help and support education leaders; whether they be headteachers, business managers, governors or trustees.

Both events will be held on December 4 2018 at The Centre at Birchwood Park. Refreshments will be provided and multiple guests are welcome from the same organisation.

They are:

1) Academisation in an age of uncertainty: how should school leaders be planning for the future?

​9:30am – 12:00pm

This is an event for governors and senior leaders in local authority schools looking at the changing political rhetoric about academisation and the strategic considerations that need to be at the forefront of their thinking. ​

2) Future proofing your multi academy trust: how to establish, maintain and grow your trust? ​​

Delegates can either attend a presentation from 13:00 or request a one-on-one discussion and review later in the afternoon. ​

In an age where academies and MATs are under the spotlight, this events looks at best practice about how to establish a trust and put in place the structures and processes that will ensure the integrity of the MAT and provide the foundations for growth. In addition, we will look at what “good growth” looks like and how to avoid the pitfalls that some trusts have experienced. To register, simply click on the link below.

To register, simply click here.

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