The latest Academies Benchmark Report arrives with a headline that has come to feel rare in recent years: academy trusts are in a stronger financial position than before.
The picture today
Only 37% of trusts reported in-year deficits during 2024/25, compared with 60% the year before, marking for the strongest performance seen since 2022. Although that sense of improvement fades fast once you look beyond that sole figure.
Confidence across the sector remains fragile, with the very cost pressures that the report seeks to highlight – including estate repairs, utilities, staffing and SEND provision – all continuing to intensify.
Decreasing reserves
The report also shows that almost all trust types are forecasting a fall in their reserves over the next two years, with secondary single academy trusts expecting their reserves to drop by an especially sharp 43% by 2026/27.
Surpluses do exist, but they’re not translating into security. This year’s positive figures are underpinned not by an easing of financial pressures, but by tighter budgeting and funding adjustments that trusts hadn’t expected when they originally set their budgets. In other words, trusts may have had a better year, but it didn’t feel like one.
Financial burdens
This tension runs right throughout the report, and nowhere is it seen more clearly than in the areas where schools have the least amount of flexibility – namely their estates, energy costs and duties to pupils with additional needs.
The Benchmark Report groups estate repairs, utilities and SEND provision alongside staffing as the core pressures currently affecting trust finances. Taken together, these costs represent the operational backbone of a school system, which means that unlike some other areas of procurement, they can rarely be reduced without consequences being felt.
Maintenance costs
Estate repairs are highlighted as a growing challenge. School buildings require continual maintenance, and as buildings age, these costs rise.
Repairs delayed in previous years often return at a higher cost, forcing trusts to prioritise urgent issues while postponing longer-term work. The report reinforces that these pressures are contributing to a wider inability across the sector to plan, invest and grow.
Carbon costs
Utilities sit close alongside estates as a notable source of financial strain. While the report doesn’t quantify year-on-year rises, it explicitly identifies utilities as one of the pressures leaving trusts operating in conditions that ‘No private sector organisation would be expected to manage.’
Energy use also connects to the sector’s stalled progress toward net zero. Nearly all trusts generated between 0.1 and 0.3 tonnes of CO₂ per pupil – almost unchanged from last year – and no further grants are expected through the Public Sector Decarbonisation Scheme.
Without financial support, reducing energy consumption any further becomes difficult, while utility costs remain difficult to control.
Costs of the core experience
SEND provision completes the trio of pressures. The report notes that the number of children with additional needs has grown to the point where ‘SEND’ can no longer be regarded as an exception within budgets.
Trusts currently face the twin challenge of rising staffing costs and increasing demand for specialist provision. This within systems and local funding structures that may not reflect the level of need they’re seeing. The pressure lies not only in staffing, but also in estates, learning spaces, accessibility requirements and the adaptations needed to support inclusion.
The common thread running across all three areas is that they shape the core experience of pupils and staff, and that their costs simply can’t be trimmed without consequences.
How trusts are coping
The report paints a picture of the sector as one that’s significantly tightened its financial systems. Trusts have benefited from careful budgeting, unexpected in-year funding and disciplined centralisation.
The data shows that 86% of trusts now consider themselves fully centralised, and nearly half of large trusts pool their general annual grant or reserves – up from 41% last year.
These strategies give trusts more control over procurement, support greater consistency across schools and allow them to share .
Big vs small
The financial variation between larger and smaller trusts also matters. Larger MATs reported average surpluses of £1.1 million, while smaller MATs and SATs averaged less than £50,000.
The impact of this difference becomes clear when reserves are considered. Reserves in small trusts have already fallen to 11.5% of income, down from 13% the year before, while larger trusts held steady at 8%.
The overall average shows that only 25% of trusts are below the 5% threshold considered to be a sign of financial vulnerability. However, the direction of travel is still downwards.
The report repeatedly highlights how rising costs of staffing, estates, utilities and SEND are affecting long-term planning. Even surpluses don’t necessarily free up resources.
With reserves forecast to plummet in many trust categories, the financial headroom is tightening further. Some trusts may end the year in the black, but many will be using those surpluses just to manage pressures already in the system.
Strategies under strain
Larger trusts also have more capacity to plan and deliver major repairs. Their average surpluses of £1.1 million and steadier reserves give them more flexibility, and they also receive School Condition Allocation. This supports them in managing the kinds of estate and maintenance pressures highlighted within the report.
Smaller trusts, by contrast, work with far narrower margins. A surplus below £50,000 will be quickly consumed by even a single moderate-scale estate issue. Rising SEND needs create additional cost pressures that can’t be distributed across a large school portfolio.
For these trusts, disciplined financial planning remains essential, but discipline alone can’t compensate for those limited reserves.
Across the sector, trusts are doing what they can to manage the pressures – centralising procurement, pooling resources, tightening oversight and monitoring their spending carefully – but these actions don’t change the fundamental challenge. Costs are continuing to rise in areas where trusts have the least ability to reduce them.
The next five to 10 years
The Benchmark Report is focused on 2024/25, but its implications stretch far beyond the immediate financial year. Several trends highlighted in the data point to the kind of long-term pressures that trusts will need to navigate.
Firstly, growth across the sector is slowing. Trusts now average just under 14 schools. However, only 36% expect to expand in the next 12 months (compared with 61% last year).
Expansion often brings with it economies of scale that support procurement efficiency; with fewer trusts planning to grow, achieving those advantages may be harder.
The issue of emissions remains unchanged. Without additional decarbonisation support, utility costs and sustainability responsibilities will continue to outpace the capital available to address them.
School meal funding remains inadequate for most trusts, with only 11% reporting that their funding covers such provision. This diverts further resources away from estates, staffing and SEND, i.e. the very areas under the heaviest pressure.
Then there are staffing costs, which accounted for more than 75% of income across all trust types, and which compound every other challenge. With 90% of trusts now reporting rising staff costs as a major concern, planning for the long term has become even more challenging.
Tackling the issues
The report concludes that greater clarity on expected funding, ideally on a multi-year basis, would help trusts budget more accurately and potentially free up more reserves for investment.
The need for that clarity is visible across all areas of pressure. Without predictable funding and sustainable support for estates, utilities and SEND, trusts may well find themselves increasingly reliant on surpluses that offer stability in the short term, but little protection in the long run.
Kevin Connor is head of academies at Bishop Fleming
