It's come to our attention the fact that a number of schools risk losing, in some cases, significant surplus revenue funds if converting to academy status before September. Given this fact, we wanted to clarify the situation to those schools this may affect. Read on for further clarification.
If your school applied for academy status prior to 7th April, you will be aware that there is a financial incentive to convert before the 1st September so you'll be eligible for the Government's LACSEG funding guarantee. But by converting so late in the academy financial year, you're left with little time to spend your grant and, under current academy rules, you'll only be allowed to carry forward 2% of your revenue surplus into the next financial year.
Our Market Insight Manager, Dr Dale Peters, has written an excellent post on this subject and clarifies the situation as follows:
Some schools [considering applying for academy status] may be concerned that under current academy rules they would only be allowed to carry forward a revenue surplus of two percent from one year to the next, whereas state schools can currently build up a significant revenue surplus before it is considered excessive (eight per cent of their annual funding for primary schools and five percent for secondary schools), allowing them to create a significant contingency fund. With the academy financial year running from 1st September to 31st August, those schools converting late in the financial year, particularly those converting on 1st August, will have little time to spend their grant.
If you find yourself in this situation, and need advice on how to invest additional surplus funds in the most effective way, we can help. Over the last ten years we've helped hundreds of schools in similar circumstances take the time needed to make the right decisions on how to spend funds, using services like our pre-invoicing process.
We've spent a great deal of time developing solutions specifically for academies so do make use of our experts. Call us on 08450 700300, post a comment on this blog, email us or browse our web site.