Kreston UK Academies Benchmark Report 2026
February 10, 2026
The 14th annual Kreston UK Academies Benchmark Report 2026 shows academy trusts of all sizes recorded their strongest financial performance in three years, marking a significant turnaround from the previous academic year. Just 37% of trusts reported an in-year financial deficit in 2024/25, compared with 60% in 2023/24.
Despite the improved headline figures, confidence across the sector remains weak. Almost all trust types expect reserves to fall sharply over the next two years, with secondary single academy trusts (SATs) forecasting a 43% reduction by 2026/27. The report highlights that recent surpluses have been driven largely by tight cost control and unanticipated in-year funding, rather than a reduction in underlying financial pressures.
Kevin Connor, Head of Academies and Partner at Bishop Fleming, said, “On the face of it, academy trusts have had their strongest financial year since 2022. However, surpluses have been largely propped up by tighter budgeting, and in-year funding trusts were not expecting when they set their budgets, rather than by any easing of underlying financial pressures. Beneath the surface, challenges such as rising costs and continuing uncertainty are already weighing on confidence and limiting trusts’ ability to plan, invest and grow.”
Trust size remains a key determinant of financial resilience
The report shows trust size continues to play a decisive role in financial performance. Larger multi-academy trusts (MATs) reported average surpluses of £1.1 million, while SATs and smaller MATs achieved average surpluses of less than £50,000.
Reserves followed a similar pattern. While only 25% of trusts overall held reserves below the Department for Education’s 5% vulnerability threshold, reserves in smaller trusts fell to 11.5% of income, down from 13% last year. Larger trusts maintained more stable reserve levels.
Claire Lowe, Chief Executive Officer of Inspire Learning Partnership, said, “Even in a year of relatively strong surpluses, the pressures that schools face have not gone away. Smaller trusts like ours operate with far less margin for error, which is why strong governance, tight controls and disciplined financial planning are absolutely critical, particularly in an environment of funding uncertainty.”
Growth forecasts slow as confidence weakens
While MATs continued to grow during the year, the pace of expansion is expected to slow significantly. Trusts now average just under 14 schools, but far fewer are planning to add new academies. Only 36% expect to expand over the next 12 months, compared with 61% last year.
Kevin Connor commented, “Low confidence across the sector has dampened growth predictions and raised serious concerns about whether trusts have the funding and resources they would need to turn schools with complex challenges around.”
Benedicte Yue, Chief Financial Officer at River Learning Trust, added that while scale can help manage risk, growth is not a universal solution and must be carefully balanced against local needs and organisational capacity.
Rising staff costs and SEND pressures intensify
Cost pressures continue to weigh heavily on academy trust finances. Ninety per cent of trusts identified teaching and support staff costs as one of their biggest financial challenges, up from 81% last year. Staff costs accounted for more than 75% of income across all trust types, alongside rising estate, utility and SEND-related costs.
David Butler, Executive Author of the report and Partner at Bishop Fleming, said, “Increased staffing costs, estate repairs, utilities, and SEND provision are all putting pressure on budgets, leaving trusts to operate under conditions no private sector organisation would be expected to manage.”
Limited progress on Net Zero and school meal funding
The report also highlights stalled progress towards Net Zero, with little change in per-pupil carbon emissions and uncertainty about achieving 2050 targets following the end of key public-sector grant schemes.
In addition, only 11% of trusts said funding for school meals was sufficient to cover costs, forcing many to subsidise provision from core budgets and divert resources away from teaching and learning.
Interest rates deliver short-term financial boost
Sustained high interest rates have provided a short-term benefit, generating additional income from cash balances. Average returns increased to £33 per pupil, with large MATs achieving the highest returns. However, the report cautions that this income does not offset longer-term funding pressures facing the sector.
To download the full Kreston Academies Benchmark Report 2026, click here.
