Multi-Academy Trusts (MATs) are facing the most challenging financial landscape in over a decade.
After years of absorbing real-terms funding cuts, cost inflation, and unfunded pay awards, many MATs are now seeing reserves fall and in-year deficits become the norm. For trust boards, this isn’t just about cutting back – it’s about whether the financial model is sustainable at all.
The current outlook
According to Tes Magazine, nearly 60% of MATs are forecasting an in-year deficit in 2023/24. The combination of rising staff costs, energy bills, and SEND-related pressure is leaving many trusts with little room to manoeuvre.
Common cost pressures include:
- Unfunded teacher and support staff pay awards
- Increased pension and NI contributions
- Rising energy and estate maintenance costs
- SEND funding gaps, pushing extra responsibility back onto trusts
Many have relied on reserves and procurement savings to stay afloat in recent years. But those options are running out.
GAG pooling: an effective tool or a risk?
In response, some MATs have turned to GAG pooling – redirecting a share of school budgets to the centre to help balance the trust’s finances as a whole. While permitted under the Academy Trust Handbook, this can be contentious.
Schools Week reports some trusts deducting up to 28% of individual school budgets via GAG pooling to cover central services or offset deficits.
Without clear communication and evidence of impact, pooling can lead to:
- Tension between central teams and school leaders
- Concerns over fairness and autonomy
- Reputational damage with staff, parents, and unions
Reserves are no longer a safety net
The Department for Education has made clear that reserves should be used for investment and risk, not day-to-day running costs.
But many trusts are now relying on them to plug annual gaps. The IGPP reports that over one-third of MATs may see their reserves fall below 5% of income by 2026/27.
Low reserves mean:
- Reduced resilience against future shocks
- Difficult audit questions about going concern
- Lower confidence from trustees, funders, and the ESFA
What trust leaders are asking us
From CFOs to CEOs and Chairs of Finance Committees, the same questions keep coming up:
- Are we legally and strategically right to use reserves this way?
- What happens next year – and the year after?
- How do we explain the position clearly to trustees, heads and staff?
- What can we benchmark against to give us confidence?
How to respond strategically
There are five key actions MATs can take now:
- Develop multi-year financial forecasts
- Review your GAG pooling policy
- Define a reserve strategy
- Improve financial literacy on the board
- Consider external support
How Botham Accounting supports MATs
We work with Multi-Academy Trusts of all sizes to build financial confidence at board level. Our work includes:
- Budget and scenario modelling across 3–5 years
- Reserves and risk strategy reviews
- GAG pooling design, review and impact reporting
- Audit and assurance services aligned to ESFA expectations
- Trustee workshops on financial reporting and scrutiny
If your trust is heading into a deficit – or just trying to make the numbers add up – we can help you strengthen governance and improve planning.
If you would like support with your Multi-Academy Trust, reach out to Charles Burrell at [email protected] or another member of our team.
