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<p>As at 1 June 2019 there are 8,678 open academies and free schools. 2,631 of these
do not have a sponsor. The majority of these are converter academies where there is
no requirement for a sponsor. There is also a small number who were formerly sponsored
but no longer have a sponsor.</p><p> </p><p>There are 161 local authority maintained
schools in the process of becoming a sponsored academy. Of these 161 schools, 83 (52%)
have no sponsor assigned to them; some of these, will be early in the conversion process.</p><p>
</p><p>Schools can draw on their reserves for a range of planned and sensible reasons.
This is not an issue in and of itself, unless it is symptomatic of a trend towards
a cumulative deficit. Cumulative deficit and surplus positions are a more reliable
overall measure of financial health. In-year spending often presents an inconsistent
picture.</p><p> </p><p>Of the 2,631 academies without a sponsor, 1,243 are recorded
as having expenditure that exceeded income in 2017/18. This can often be planned expenditure
using reserves strategically. There were 182 with a cumulative deficit. If the sums
are significant, the trust may, as appropriate, be subject to scrutiny or intervention
by ESFA. Of the 83 local authority maintained schools in the process of becoming a
sponsored academy, 50 had expenditure that exceeded income, while 28 had a cumulative
deficit.</p><p> </p><p>When a local authority maintained school with a deficit becomes
a sponsored academy, the deficit remains with the local authority, in line with our
published guidance. Likewise, when an academy with a deficit is in scope to transfer
to a new trust, any deficit at the academy at the point of transfer would ordinarily
remain with the outgoing trust in line with our published guidance.</p>
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