Planning and managing academy budgets: the complete guide for trusts

Untitled design 49 | Planning and managing academy budgets: the complete guide for trusts
By Toby Lester | 6th March 2020 | 10 min read

In real terms, per-pupil school funding has shrunk over the past decade. However, demands on trusts are ever-growing.

Consider Amanda Spielman’s recent school funding blog post claiming that schools and trusts are ‘squandering’ cash, and the need for proper accountability and budgeting becomes clearer than ever. Even the most prudent of budget-setters needs to consider how their budgets will be perceived by the DfE.

To help you get it right, here’s the complete guide to balancing the books for multi-academy trusts.

Budgeting for trusts

Balancing income and expenditure can sometimes feel like standing on a knife-edge. Performing this balancing act across a trust without any top-down visibility is nigh impossible; that’s why it’s important to start with improving your visibility on a per-school basis before you start to wade into your budgets.

You need accurate data to work with and absolute financial confidence. Before you start, consider cloud-based financial management packages that could help you to get a clear view of the bigger picture and work across multiple sites easily.


When calculating this, split your figures in two. You want to look at staffing expenditure and non-staffing expenditure separately.

Non-staffing expenditure would include equipment, assets, premises, and even contracts and examination costs. Again, a robust financial management and purchasing system will make this task easier.

If non-staffing expenditure is excessively high, consider how you could share resources between trust schools, such as vehicles or even premises. If your trust is more spread out, consider contacting local schools to see how you can pool resources to the benefit of both schools – it never hurts to ask!

Staff expenditure

Look at how much is spent on staffing on a per-school basis. How does this compare to your school’s progress score and pupil attainment? This figure is crucial, as theoretically, more spend should mean better results.

Typically, you should spend no more than 80% of your total spend on staffing. If your figures are higher than this and you’re not seeing amazing results, you may need to consider how many staff you have and the proportion of highly paid staff on your books. You may also consider saving by leveraging your trust’s resources and spreading facilities teams across several academies.

Check the schools financial benchmarking service; if your average teacher cost is unusually high compared to other schools, it may be time to consider how you grade teacher pay and performance across the trust. This will help you to make tough decisions when it comes to budgeting.

You should also compare leadership pay across your academies. Consider how the decision has been made to allocate funding to leadership and whether it’s proportionated across every school.

The past and the future

Trust budget holders need a plan. Look through old budgets and see how they’ve been balanced in the past. Identify any points for improvement and work on them first.

It’s also useful to peer into the future. How could your budgets look in several years? Trusts should do this as part of their budget forecast three-year returns but being thorough and properly completing a robust projection can also be a huge help to balancing this year’s budget.

You never know what’s going to happen in the future, so it’s important to be prepared. Political decisions such as funding levels or even regional issues like a new school opening nearby can have a dramatic effect on your year-on-year funding, so you need to be prepared across all your schools.

Budgeting planners like IRIS Financial Planner can be a huge help, as they support 5-year projections as standard. Consider creating cautious, likely and optimistic scenarios, so you have a plan for any situation. This provides trusts like yours with the flexibility they need to keep up with whatever’s thrown at them.


Keep up to date on the latest legislation. As the political situation shifts, legislation can change on a routine basis. A robust financial management system like IRIS Financials can help with this by providing up-to-date chart of accounts and legislative compliance reports.

You should also consider subscribing to DfE legislation updates at the website. You can have them fed through to your email inbox on a basis that suits you, so you’ll always be up to speed.

Other relevant figures

  • Exam results – see which departments, if any, are struggling and may need additional financing
  • Costs – how much will you need to shell out for essentials, like maintenance? What existing contracts do you have, and when will they renew?
  • Pupil intake – are you at maximum capacity? This will affect funding and the amount you have to spend on common amenities.

Once you identify which schools and departments are most at need, you’ll want to allocate funding to support them. This is made significantly easier if you have the infrastructure to allocate funds to at-need areas as and when they need it.

Consider using IRIS Financials; it can help trusts of any size to manage their finances thanks to its cloud-based unified ledger technology.

Use IRIS Financial Planner in conjunction with IRIS Financials to help you manage your budgets across the entire trust. We’re on hand to discuss your trust’s needs and to figure out how to make your trust’s budgeting easier and more accurate, so don’t hesitate to get in touch.