Question to the Department for Education:

To ask the Secretary of State for Education, how many Academy Trusts have received emergency funding from the Education and Skills Funding Agency in the current financial year; and the total amount of emergency funding that was allocated.

The Education and Skills Funding Agency’s (ESFA) records show that one academy trust has reported a severe deficit in the 2018-19 financial year and two academy trusts received unscheduled funding payments totalling £230,000 in the same period (as at 15 May 2018). In the most serious cases, the ESFA provide additional funding to protect the education of children. Academy trusts are expected to repay any additional funding once they have reached a stable financial position.

Academy trust accountability is founded on a clear framework communicated and regulated by the ESFA, with effective oversight and compliance based on proportionate risk assessment, and robust intervention when concerns arise. To ensure strong external scrutiny, all academy trusts must have an annual external audit of their annual accounts by a registered statutory auditor and the department expect trusts to act on audit findings as an opportunity to strengthen their systems. Auditors must apply national auditing standards set by the Financial Reporting Council as independent regulator, and this provides the department with a high level of confidence that scrutiny is professional and consistent.

The ESFA works with academy trusts to prevent financial instability and enable them to recover their financial position and return to stable governance. When we intervene, we publish financial notices to improve (FNtI) and investigation reports to be transparent so that lessons can be learned. The sector remains in a strong position, with just over 1% of academy trusts subject to an active FNtI. Published FNtIs are available at: https://www.gov.uk/government/collections/academies-financial-notices-to-improve.

The ESFA is also working with the sector to continue building capacity and expertise in financial management and forecasting. To reinforce the importance of three year financial planning, the ESFA are further strengthening budget forecasting. The ESFA CEO Eileen Milner wrote to academy trusts in March 2018 setting out the requirement for all academy trusts to submit three-year financial forecasts.