Date posted: 5th Feb 2026
Academy trusts in England continue to face growing pressures despite achieving their strongest financial performance in three years, an education state of the nation report has revealed.
The 14th annual Kreston UK Academies Benchmark Report, encompassing the 2024/2025 academic year, reported that just 37% of trusts reported in-year financial deficits in 2024/25, a dramatic reversal of the state of academy finances in the 2023/24 academic year, when 60% of trusts were in deficit.
However, these buoyant results have done little to boost confidence across the sector as almost all trust types forecasted reserves to plummet over the next two years. This bleak outlook is particularly stark in secondary single academy trusts (SATs), where reserves are expected to fall 43% by 2026/27.
Chris Beaumont, Partner and Head of Academies at Clive Owen LLP, is a co-author of the report, with Clive Owen LLP currently acting for 60 academy trusts across the North, comprising more than 350 schools.
The latest Academies Benchmark Report showed that larger multi academy trusts (MATs) have returned average surpluses of £1.1 million this year. In SATs and smaller MATs, surpluses were much more modest at less than £50,000 on average.
Only 25% of trusts overall were holding less than 5% in reserves, the level the Department for Education (DfE) considers may be a sign of financial vulnerability. However, reserves in small trusts fell to just under 12% of income (11.5%), down from 13% last year, while in larger trusts, reserves remained steady at 8%.
MATs continued to grow this year, but there are clear signs that the pace of expansion is forecasted to slow across the sector. Trusts now average just under 14 schools, up 8% from just over 11 in the previous year, but far fewer are planning to add new academies in the future. Last year, 61% expected to gain at least one school in 2025/26, rising to 83% by 2026/27. This year, just 36% expect to expand over the next 12 months, a drop of 25 percentage points.
It also revealed that costs of teaching and support staff continue to place enormous pressure on academy trusts, with 90% now reporting this as one of their biggest financial concerns, up from 81% last year.
Rising salaries for teaching and support staff, along with additional tax burdens, have made budget planning increasingly difficult. This pressure is particularly evident given that staff costs in 2024/25 accounted for more than 75% of income for all trust types, a commonly used benchmark for financial health and sustainability.
Only 11% of trusts said the funding they received for school meals was sufficient to cover the cost of providing them. Local authorities are increasingly introducing automatic enrolment or opt-out initiatives for free school meals, which could have a significant impact on their ability to support more families and ensure trusts receive the funding they are entitled to.
However, there were some positives to draw from the report, as sustained high interest rates over the past four years generated significant extra income from financial surpluses across academy trusts.
Large MATs led the way with a return on investment of £39 per pupil, but returns were strong overall, averaging £33 per pupil. This is an increase on last year’s £29 returns per pupil, reflecting trusts’ ongoing commitment to maximising income and strengthening financial resilience.
Other key findings included:
- Nearly all academy trusts generated between 0.1 to 0.3 tonnes of CO₂ per pupil this year, with trust size having almost no impact on emissions. With little change from last year, the sector’s progress on cutting emissions has plateaued, leaving the prospect of meeting the 2050 net zero targets in doubt.
- The average large MAT CEO salary crossed £200k for the first time in our survey
- 86% of trusts now consider themselves to be fully centralised
- 49% of large trusts reported pooling GAG or reserves, up 8 percentage points from 41% in 2024
Commenting on the report’s findings, co-author Chris Beaumont said: “The latest Kreston UK Academies Benchmark Report once again provides a measured snapshot of the sector, with this year’s analysis continuing to underline the increasing financial pressures facing academies.
“Although it is encouraging to see a year-on-year reduction in the number of trusts reporting deficits, confidence across the sector remains fragile. It is particularly concerning that a quarter of trusts hold less than 5% in reserves, while also dealing with rising operational and staffing costs.
“As in recent years, it is essential for trusts to examine their budgets even more closely, with difficult decisions likely as the sector navigates a range of ongoing challenges.”
Published annually by Kreston UK academies group, a network of accounting firms, the report is a financial state of the nation survey of almost 250 Trusts representing more than 2,500 schools and almost one fifth of all children educated in academies in England. The survey covers the 2024/25 academic year.
