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<p>The department is working with the sector to continue building capacity and expertise
in financial management, particularly the prevention of a deficit. This includes supporting
effective school resource management in trusts with three-year financial forecasting
and developing buying hubs and recommended deals for all schools. We are also continuing
to work with local authorities, as appropriate, to help them identify potential financial
health issues and support schools. We have worked with them to understand how they
work with maintained schools, share good practice and use the financial data available
to them.</p><p> </p><p>In particular, the Education and Skills Funding Agency (ESFA)
have introduced Schools Resource Management Advisers (SRMAs) to provide help and support
to trusts and maintained schools. SRMAs are sector experts who will work with schools
and trusts to provide tailored advice on how to make best use of their revenue and
capital resources, and reduce non-staff spend, to deliver educational outcomes and
contribute to whole-school improvement, prioritising those schools which will benefit
the most.</p><p> </p><p>In the case of academy trusts, an academy trust having an
in-year deficit is not in and of itself a negative thing. Schools can draw on their
reserves for a range of planned and sensible reasons, for example, to spend on capital
projects or whole-school improvements. This is prudent financial planning and not
at the expense of educational delivery. The academies sector is stable with fewer
than 2% of trusts subject to a Financial Notice to Improve.</p><p> </p><p>Where an
academy trust does require additional support to manage a deficit, the ESFA will work
with them to help them reach a stronger position. Where there is a risk to public
funds, the ESFA will intervene in a way that is proportionate to the risk and preserves
education provision. This can include issuing an Financial Notice to Improve, or in
the most serious cases, termination of the Funding Agreement.</p>
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