16 May 2017
School funding has recently been hitting the headlines as headteachers and school governors claim that there is a ‘financial crisis’ in education. Schools are facing tough choices and if the new national funding formula is not right then many schools will suffer as a consequence. In the light of increasing cost pressures, education leaders are pushing for more money to be ploughed into schools, however recent reports suggest further budget cuts are in the pipeline.
Many assume that academies have more money than maintained schools but academies are funded on the same basis and are equally concerned about budget pressures. Subsequently, many individual academy schools are actively pursuing different ways to generate additional income streams and are exploring their options in this area to bridge the funding gap.
Potential income streams include hiring out buildings, sports facilities and providing services to other academies. Academy schools are now being forced to become more business-like and face many challenges. Many schools already have strategies in place to make savings and many are working to efficiently steam-line their organisational structure and processes.
It must be noted that academies need to pay careful consideration to the potential tax and VAT implications of generating a significant amount of additional income, but often any additional tax cost can be mitigated if structured in the right way, and at modest levels there is rarely a tax or VAT problem. Find out more in our previous blog: Funding – if you do not try or ask then you do not get!
The multi-academy trust environment provides many opportunities for efficiencies, cost savings and economies of scale. Many multi-academy trusts have been using their access to skilled business professionals to assist them with resource management. At UHY Hacker Young, we have advised many multi-academy trusts from initial set-up and continue to do so as their auditors. We have produced our first MAT focused white paper to help you gain a greater understanding of MATs, their structure and how they operate. Download here.
As leading advisers to the academy sector, we can assist you in the following areas:
- deciding on the committee structure;
- ensuring a level of due diligence is carried out before a MAT takes on a new school;
- accounts preparation;
- choosing and setting up your financial software;
- VAT;
- external audit;
- internal audit; and
- top slicing.
Should you have any questions about this blog, please do not hesitate to contact me or your local UHY academy expert.
