New research has shown that eight out of 10 academy schools are running a deficit.
The authors of the report suggested that some schools have just “two years” until they face the prospect of insolvency.
In total, 55 per cent of academies were deemed ‘in deficit’ before the effect of depreciation of assets, such as buildings, equipment and furniture, was taken into account.
This rose to 80 per cent when the accounts were adjusted to include depreciation, the report shows.
The document further found that staff make up 72 per cent of costs in these academies, as teachers continue to right for ‘real’ wage rises.
The figures were taken from genuine audited accounts of academy schools and represent a realistic cross-section of the academy school sector.
The report warns that schools are cutting back in many departments, such as by not upgrading outdated technology.
“The whole sector will be on the verge of insolvency if they have just two more years like this one,” said the authors.
“Accountants can work with governors to help them save every last penny possible, but without significant increases in public funding, this could become a full-blown crisis,” he added.
At The Fish Partnership, we can help schools and academies to ensure that they are tax-efficient and financially fighting fit. To find out more about our sector-specific services, please contact us.