BUILDINGS, MAINTENANCE & REFURBISHMENT
financial hole, knowing about it is the first step. Being a larger trust there will be more scope to look at other spending and make adjustments accordingly, so this is where longer term planning comes in, to ensure that you are able to meet your future estate improvement and maintenance requirements.
For smaller trusts and single academy trusts, this can be more challenging as funding is through CIF and the uncertainty of winning a bid to undertake the work required. Planning ahead, being clear about priorities and considering designation of a proportion of reserves to contribute towards a project, or factoring in the cost of a CIF loan to enhance your bid, are going to help.
supplies, rising material costs and the logistics of finishing projects on time and on budget, but it didn’t mean that these projects did not need to be undertaken. We are now a couple of years beyond that time, which means a couple more years of deterioration, and these projects may now need to get underway. So although reserves may have grown, this is less likely due to ‘hoarding’ of reserves but more a delay in spending on necessary maintenance and upkeep. Designating reserves clearly shows the intention and thought process of trusts, so if you are holding reserves of 20% or more because you have delayed capital projects or major maintenance work, you should consider designating this now.
The forward planning of capital projects and maintenance works is backed up by the Academy Trust Handbook when talking about good estate management. The Academy Trust Handbook first made prominent reference to this in the 2023 edition where it emphasised the importance and value of good estates management (1.19), including links to Good Estate Management for Schools (first published April 2018 and updated 25 April 2024) and the Estate Management Competency Framework (published and updated at the same time as the Good Estate Management for schools).
In the Government’s guidance for school capital funding update, 11 September 2024, it is stated: “We expect bodies responsible for schools to manage their school estate strategically and maintain their estate in a safe working condition.”
For those trusts where reserves are at a higher level, the task for the trustees is to familiarise themselves with the guidance, complete an estates audit and start planning and setting aside the funds to ensure that their students continue to learn in a well maintained, welcoming and safe environment to ensure the best outcomes. But the Kreston Benchmark Report 2024 states that 75% of trusts say their reserves will be either lower or would run out entirely in the next three years. So, what about those trusts with dwindling reserves?
The Academy Trust Handbook’s emphasis on good estate management was further reinforced in the 2024 handbook, where there was an extension to the list of examples where a Notice to Improve (NtI) may be issued,
December 2024
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to include management of the school estate (6.16): “Examples of when a NtI may be issued on financial management grounds include: …
..trustees and the executive failing to manage their school estate and maintain it in a safe working condition strategically and effectively.” So, not doing anything about your estate is not an option. A good place to start is to ensure you are following the DfE guidance for good estate management for schools. Ensure you have a vision for the next five to 10 years, a strategy for the next three to five years, a management plan for the next two years and a strategic review process in place. This applies to every trust, whatever level of reserves you have, but arguably careful planning is even more important for those trusts where reserves are limited.
This will require an audit of your current estate and prioritising of maintenance and building works that need to be undertaken. This can then be used to build a budget for future spending on the estate. Without this it is impossible to understand just what funding is required and whether you have sufficient reserves for this. Larger trusts eligible for SCA funding should be well versed in planning ahead and generally have higher reserves and much more certainty over future capital funding. Where they do find a
But what happens if your reserves are already in a position that you are unable to contribute to a project or an emergency arises? There is the Urgent Capital Support funding for those trusts who do not receive SCA, but this is only for very urgent issues - as the title suggests - and should not be the default position for managing the school estate. If you are at the point of applying for this funding, other than issues that could not have been anticipated, there could be some question marks over the trust’s oversight of estate management and financial planning. So, when we consider when and how trusts should be spending or holding back on estate management, it very much boils down to prioritisation and having a strategic plan to ensure the expected costs are understood and planned for, reducing the possibility of the unexpected costs arising. Whatever the level of your reserves, not having a plan is not an option - having a clear plan and being able to demonstrate that you have followed DfE guidance puts you in a much stronger position when speaking to the DfE, should you find yourself in a position that funding is not sufficient for your needs. On a final note, trusts must ensure that all spend, including that on capital projects, is compliant with the regulatory framework. Particular note should be made of the Procurement Act 2023, which is due to come into force on 24 February 2025, bringing with it changes in procurement regulations and practices that trusts should embed into their policies and procedures.
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