Academy Trust Finances Under Pressure

Here’s the tricky thing about the latest academy trust benchmarking: 2024–25 looks better than the year before, but the next couple of years still look tight. The Kreston UK Academies Benchmark Report 2026 shows fewer trusts running an in-year deficit in 2024–25, and average results improving. But it also warns that reserves are forecast to fall across most trust types, which is where the real risk sits.

That difference matters. A surplus can happen because you’ve squeezed spend harder than usual or because you got in-year funding you didn’t budget for. The report suggests that’s what’s been going on in a lot of cases, rather than any real easing of the pressures trusts are dealing with day to day. So even if the headline position looks healthier, plenty of trusts are still operating on a knife edge.

Reserves are the clearest sign of that. The report notes that around one in four trusts held less than 5% of income in reserves in 2024–25, which the DfE treats as a warning sign. And the forecasts aren’t comforting either, especially for some parts of the sector, with reserves expected to drop further over the next two years. When reserves slide, it doesn’t just mean less “savings”. It means less room to deal with staffing gaps, SEND pressure, building issues, or any unexpected hit.

So what can trusts and academies do that actually helps?

First, boards need to be clear about what reserves are for. Not as a badge of honour, and not as something you dip into quietly to get through a rough patch. Agree what a minimum buffer should be, based on your risks, and treat it like a guardrail. If you do need to use reserves, do it on purpose, with a plan to stop the drawdown and rebuild, rather than letting them drain away through lots of small decisions.

Second, make scenario planning a normal part of the year, not something you do when things are already going wrong. The report is blunt about the uncertainty trusts face and how that drives short-term decisions. You don’t need complicated models to improve this. A small set of refreshed scenarios each term, with clear assumptions, helps leadership teams and trustees make calmer decisions and avoid being forced into last-minute cuts.

Third, get serious about the staffing picture. The report says staff costs are the biggest concern for most trusts, and that staffing accounts for more than 75% of income across trust types. That’s not news to anyone running a budget, but it does mean the “solution” can’t just be another round of trimming. Trusts need staffing models that are workable long term: sensible deployment, honest curriculum planning, and a proper grip on agency spend. And if workload and retention aren’t part of the conversation, they should be, because constant turnover costs money and hits quality.

Fourth, SEND can’t be treated like a separate issue that only shows up in a spreadsheet. The report flags SEND pressures as part of what’s squeezing budgets, alongside staffing and estates. The more consistent your approach is across schools (early identification, classroom practice, targeted support, clear pathways), the less likely you are to end up firefighting expensive crises later. MATs can do well here when they use their scale properly, by sharing expertise and being consistent, not by adding extra layers.

Fifth, estates need to move from “we’ll deal with it when it breaks” to planned risk management. Building problems are one of the quickest ways to blow a budget. A trust-wide view of condition, compliance and likely future spend helps you plan, prioritise, and avoid nasty surprises. It also makes growth decisions more realistic. The report notes that fewer MATs are expecting to expand in the near future, partly because confidence is low and capacity is stretched. If you are taking on new schools, the due diligence has to be hard-nosed, especially on estates and staffing fragility.

There’s also a straightforward point here: trusts don’t always have the internal capacity to do all of this well, especially when central teams are already stretched. One Education can help by taking pressure off in the areas that tend to cause the most strain: finance support (budgeting, forecasting and benchmarking), payroll, HR advice and casework support, SEND support focused on inclusive practice, and governance support for boards and trustees. Used properly, that kind of support doesn’t replace leadership; it just gives leaders more time and clearer information to make decisions that stick.

The report’s message on academy trust finances is basically this: some trusts have managed a decent year, but the foundations are still shaky. The best response isn’t panic, and it isn’t pretending things will improve on their own. It’s making sure your planning is honest, your staffing model is sustainable, inclusion is handled consistently, and estates risks are understood before they become emergencies. If you do that, you’ve got a much better chance of protecting provision even when the numbers get harder.