NAO Report: Financial Sustainability of Schools

In November, the National Audit Office produced an important report examining the financial sustainability of schools in England, which complemented its report on school funding in England in July 2021. The Government will respond to the expected Public Accounts Committee report on school financial sustainability after it is published.

I welcome the Public Accounts Committee’s scrutiny of the financial sustainability of schools. This is an important report by the National Audit Office, and it shows that 22% of academy trusts had reserves equivalent to a fifth or more of their annual income, but on the other side of the equation, 27% of maintained secondary schools were in deficit. Does this not need to be investigated?

It is very possible that it does. Most maintained schools and academy trusts have been in surplus, but there have been significant pressures on some maintained secondary schools. As my hon. Friend says, a sizeable minority of academy trusts are building up substantial reserves, meaning that they are spending less than their annual income on their pupils. What is done about that is a policy question and thus a matter for Government, rather than for the National Audit Office.