FEATURE FOCUS: FINANCE
WILL JORDAN, Co-Founder of IMP Software, shares his insights MAT finance: a look at how the financial resilience
of trusts is weakening under mounting pressure T
he financial health of multi- academy trusts (MATs) is under increasing strain. A convergence of cost pressures – from staff pay increases to declining pupil numbers and unfunded growth in special educational needs (SEN) provision – is stretching budgets further than ever before.
In association with the Confederation of School Trusts (CST), we have published the MAT Finance Sector Insight Report 2025, which presents forward-looking budget forecasts from 274 MATs covering the 2025/26- 2027/28 financial years. The report explores core issues including surplus and deficit forecasts, pupil number
predictions, SEN challenges, General Annual Grant (GAG) and reserves pooling, MAT finance team structures, and funding allocation in special schools. Here’s what we found:
1. A sharp rise in trusts forecasting deficits
More than half (55%) of trusts are forecasting an in-year deficit for 2025/26. This marks a significant increase from the 34% reported in the MAT Finance Sector Insight Report 2024 for the 2024/25 period. The sharp rise underlines the mounting financial pressures MATs are experiencing, with implications for operational and strategic decision-making.
2. Declining reserves signal growing vulnerability Reserve levels are also on a downward trajectory. A third of trusts anticipate ending 2025/26 with reserves below 5% of income – a threshold the Department for Education considers potentially ‘financially vulnerable’. Projections indicate that by 2028, half of all trusts could fall beneath this level. Currently, only 2% of trusts hold reserves exceeding 20% of income, signifying a worrying trend in the sector’s financial resilience.
3. Increasing uniformity in financial strain
Trusts appear to be consolidating around the 5% reserves threshold, indicating growing uniformity in financial vulnerability. This trend suggests more trusts will have limited capacity to manage unforeseen costs or make strategic investments, potentially restricting growth and innovation across the sector.
4. Deprivation and MAT size not strong predictors of resilience Interestingly, projected financial resilience does not correlate strongly with either pupil deprivation levels or trust size. While additional funding is available to support higher-deprivation cohorts, the associated costs often offset this benefit. As a result, trusts with more disadvantaged pupils still struggle to generate surpluses or build reserves.
5. Staffing pressures: Primary trusts hit hardest Staffing cuts in primary trusts present another area of concern. Teaching assistant (TA) full-time equivalents are projected to fall at nearly three times the rate of pupil number declines. In contrast, secondary trusts anticipate stable or slightly rising enrolments and relatively flat staffing budgets for teachers and TAs.
6. Disparities in per-pupil funding and costs
GAG income per pupil varies significantly across the sector, particularly disadvantaging primary trusts. These trusts often face the dual burden of higher pupil-to-teacher ratios and the need to allocate a large share of
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10. Pooling reserves more common than pooling GAG Pooling of financial resources varies across trusts. While only 21% pool GAG, 55% of trusts pool reserves. Notably, pooled reserves are associated with a better surplus/deficit outlook for 2025/26. However, this may reflect the fact that pooling is more likely to be adopted by trusts already facing financial challenges and seeking more flexibility in resource deployment.
The data presents a stark picture: MATs are grappling with tightening budgets, reduced flexibility and increasing demands. The financial outlook for the next three years should serve as a wake-up call to sector policymakers. While benchmarking and robust financial planning are more important than ever, the current funding framework doesn’t reflect the realities trusts face. Delivering high-quality education cannot be reduced to a matter of spreadsheets. Ultimately, the decisions MATs make about staffing, support and provision must be driven by a single priority: giving every child the opportunity to thrive, supported by the teachers and staff who inspire and challenge them every day.
November 2025
revenue to teaching costs, leaving less flexibility to manage other financial pressures.
7. Teaching costs rising beyond pay awards
Teaching costs are increasing at a rate that exceeds headline pay awards, driven by incremental salary progression and other contributory factors. Despite this, many trusts are absorbing these cost increases without achieving corresponding improvements in their financial positions, indicating another potential stress point for future budgeting. 8. Inequities in special school funding
A growing concern is the variation in funding across special schools, despite comparable pupil needs. This discrepancy suggests that local funding models, rather than pupil characteristics, are driving resource allocation, raising questions about equity and fairness in special educational provision.
9. Centralisation offers efficiency gains – but not universally adopted Centralisation of support services continues to grow, with 22% of trusts now fully centralising IT, Payroll, Finance, HR, Procurement and Facilities. IT is the most frequently centralised function, while Facilities remains the least. Smaller trusts often face higher per-pupil finance costs, especially when services are not centralised – whereas medium and larger trusts benefit from economies of scale.
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