A multi-academy trust has made a £1.2 million return - equivalent to funding for an entire primary school - by using a cash management technique called “credit sweeping”.
Northern Education Trust, which runs 30 schools across the North East, North West, and Yorkshire, says it has used the money to invest heavily in estates and to fund trust growth, school improvement and curriculum development.
It has done this through “zero-risk credit sweeping” with Barclays Bank, whereby excess funds are held in an overnight market, which has resulted in £1.2 million of interest being raised.
Northern’s chief operating and financial officer Gareth Edmunds told Tes the trust is working with the Department for Education to share the practice.
“Notionally, it’s equivalent to one of our primary schools being funded for free,” he said. The trust has 17 secondaries and 13 primaries.
“Whilst other banking services are available, they can be free of charge but fail to deliver the innovation and higher-performing financial services that can support MATs to realise this type of return on their cash balances,” Mr Edmunds added.
The DfE is “keen for other MATs to establish similar practices to support priorities in education and school improvement”, he claimed. The DfE has been contacted for comment.
Leaders ‘becoming more creative’ to maximise income
Mark Blackman, director of education consultancy Leadership Together, said using zero-risk accounts to generate interest like this can be seen as a good use of public funds.
He added £1.2 million is “a very significant return” and would be innovative practice for some trusts with big cash balances.
“I think it’s a sign of leaders becoming ever more creative to maximise the income to support the day-to-day experience of children.”
Northern Education Trust underwent a period of significant growth during 2023-24, according to its latest which were recently posted.
Overall, the trust made a surplus, continued reviewing its governance structure and improved its key stage 2 results.
Six new schools added and more to join
The trust added six schools during 2023-24: Farringdon Academy, Thornaby Academy, Chesham Academy, Hazlehurst Academy, ESSA Primary Academy and ESSA Academy.
Buile Hill Academy joined on 1 September 2024 to bring the trust to 30 schools and it is further expected Denton Community College will join sometime in 2025.
Any new schools would be taken on “after close consideration by trustees” of the growth strategy, the geography, current capacity and due diligence”, the accounts say.
“We mapped out exactly what the structure would look like as we took on more and more schools, and how many posts we would have to create and when we would create them,” CEO Rob Tarn told Tes.
”That initial period of growth was done over the last 15 months. By and large, it was a mixture of half the schools joining us because they were inadequate and the other half voluntarily wanting to join us.”
Mr Tarn added the trust continues to support schools across the areas it operates in that are not part of the trust.
Trusts should take ‘pairings’ of schools
Changes for the academy sector are on their way under Labour. The Children’s Wellbeing and Schools Bill brings academies onto the same footing as maintained schools in many respects and failing schools will no longer be automatically forced to join a trust.
“I think we’ll see less churn in the system now, because there will be fewer schools that are in scope for intervention” under the changes to forced academisation, Mr Tarn said.
Over the past decade, the sector should have been making larger MATs with “deep pockets” take on “a mixture of schools that make a financial contribution to the trust and schools that are a financial liability to the trust”, he said.
He added: “It is clear that some trusts have exercised their civic duty to take on schools for the benefit of children even if they will need to be subsidised over time, but when commissioning sponsorship I believe that pairings of schools could be made a requirement.”
“For example, we recently sponsored a 1,600 place special measures secondary alongside two small inadequate primary schools.”
Reserves grow by £768k
Northern Education Trust made a surplus of £768,000 during 2023-24, its accounts show. This brought its reserves to £13,532,000 as of 31 August 2024, up from £12,764,000 the previous year.
However, the trust set aside £700,000 of that to deliver new buildings at Thorp Academy to support an increased number of students coming from new housing. This left the final surplus of the year at £68,000.
Each school in the trust has kept £15,000 of reserves.
Mr Edmunds said the trust’s growth helped to increase its reserves. It has also made use of integrated curriculum and financial planning (ICFP) and consolidated purchasing.
The trust has decided to invest its in-year surplus in two primary schools it has taken on in the North West.
“Financial challenges for primary-only MATs can be significant, however, the use of ICFP should mean that finances are not a concern to mixed MATs or individual secondary schools, of say 750 pupils or above,” Mr Tarn said.
“It is frustrating that ICFP health check data (used by trusts) indicates that some large secondary schools may be as much as 15-20 teachers overstaffed, while schools nearby are complaining of a recruitment crisis.”
CEO pay up by £15K
Northern Education Trust employed 2,293 members of staff in 2023-24, up from 2,012 in 2022-23.
Its direct and support staff costs grew to £99,186,000, which represented 87.9 per cent of the general annual grant (GAG).
Mr Tarn received remuneration of £247,822 during 2023-24 - up from £232,576 the year before. The roughly 6.5 per cent rise reflects what teachers were offered under the national pay deal.
Attainment: KS2 up, KS4 down
The trust saw a five percentage point increase in its key stage 2 results from the previous year.
At key stage 4, 48 per cent of Year 11 students achieved a grade 5 or better in English and maths in summer 2024.
This was three percentage points down on 2023, but above the national average of 45 per cent.
Central team expansion
As it grew during the year, the trust expanded its central team, particularly to increase its school improvement capacity.
No central team staffing numbers are provided in the accounts, which state that the trust appointed secondary and primary directors of learning and subjects.
It has also invested in central functions like finance, HR, IT and business managers.
Attendance tsar ‘quite pleased’ with performance at own trust
Mr Tarn serves as attendance ambassador to the DfE, and works with schools and leaders to share effective practice and help develop attendance hubs.
The trust said its primary attendance by the end of 2023-24 was equal to the national average. At primary, it also decreased the attendance gap between all children and children on the pupil premium to 1.1 per cent.
At secondary, Northern Education Trust said further work is still required to bring attendance to the national average, though progress was made in 2023-24 in closing the gap.
Attendance was 88.9 per cent across the trust at secondary, compared with 90.9 per cent nationally.
“I’m quite pleased with attendance, given 50 per cent of our secondary kids are disadvantaged and our attainment is way above national,” Mr Tarn said.
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