Last reviewed 7 December 2021

Having last done so in 2016, the UK’s spending watchdog has produced a report on the financial sustainability of schools.

The National Audit Office (NAO) explains that schools are financially sustainable when they successfully provide a good-quality education to all their pupils within the income that they receive.

In its latest report, available here, it finds that the financial health of the mainstream school system has held up well despite the funding and cost pressures that schools have faced in recent years.

However, the data does not yet reflect the impact that the Covid-19 pandemic may have had. Most maintained schools and academy trusts are in surplus, but there are significant pressures on some maintained secondary schools.

The concern in relation to the academy sector is that a sizeable minority of trusts are building up substantial reserves, meaning they are spending less than their annual income on their pupils.

While Ofsted inspection ratings suggest that mainstream schools have generally maintained educational quality, the NAO notes that there are indications that the steps schools are taking in response to financial pressures may adversely affect aspects of their provision.

“Since we last reported in 2016,” it concludes, “the Department has implemented a range of sensible programmes to support schools to improve their resource management and achieve savings, which have generally been well received by the sector. The programmes have added value and helped schools to achieve savings.”