Why 2026 matters for MAT finance

Finance leaders in multi-academy trusts are entering one of the toughest periods since academisation. The 2025 Kreston UK Academies Benchmark Report (covering 260+ trusts and nearly 2,300 schools) shows that the proportion of trusts reporting in-year deficits has tripled in three years, and around a third of trusts now hold free reserves below 5% of their income.

At the same time, trusts are absorbing successive pay awards and higher on-costs, persistent energy and estates pressures, and rising SEND and transport costs.

So, while the National Audit Office describes a sustainable school system as one that can deliver good-quality education within the income it receives, in 2026 many trusts are finding that expectation increasingly difficult to fulfil.

The 2026 MAT finance landscape – in plain English

What the numbers are telling us

Across recent reports, several messages are consistent:

• Deficits are widespread, not just in a few outliers.

• Reserves are increasingly used to plug gaps, not solely to fund time-limited investment.

• Cost pressures are structural — pay, energy, estates and SEND-related spending are rising faster than core income for many organisations.

The NAO and the Public Accounts Committee have both raised concerns about the financial resilience of schools and the adequacy of current oversight.

What this feels like inside a trust

This pressure plays out differently among trusts in the UK, depending on things like size and context:

• Smaller trusts worry about being caught out by a sudden shock when much of the planning still lives in complex spreadsheets and personal knowledge.

• Growing trusts are trying to standardise and modernise processes across multiple schools without overwhelming small central teams.

• Larger, more complex trusts are expected to provide advanced modelling, early-warning indicators and a clear reserves strategy, often while still growing or restructuring.

The shared reality is that annual, school-by-school budgeting is no longer enough. Trusts need multi-year, trust-wide planning with shared assumptions and explicit trade-offs.

Five principles of sustainable MAT finance in 2026

1. Work from a single version of the truth

DfE guidance urges boards to use planning checks early and look at the 3–5-year position, not just next year. That’s almost impossible if:

• Each school uses its own budget spreadsheet

• Assumptions for pay and inflation differ

• Consolidation is manual and dependent on a small number of people

You need:

• Consolidated data – all schools in one trust-wide model

• Consistent assumptions – pay, inflation, grants and one-offs clearly defined

• Shared definitions – so everyone means the same thing by “staff costs % of income” or “structural deficit”

A MAT-specific budgeting platform is designed to support exactly this: one dataset, with multiple views.

2. Plan over several years, not just one

DfE resource management tools and checklists emphasise the importance of 3–5-year financial planning, not just the next budget.

While this is easier said than done in the day-to-day for CFOs and finance managers, in practice it means:

• Maintain a rolling three-year forecast as standard

• Update forecasts promptly after funding announcements, pay awards and census

• Test different assumptions for pupil numbers, pay and high-needs funding

This brings reserves strategy into the open: what happens to reserves if you accept an in-year deficit, and when do you return to balance?

3. Put curriculum and staffing at the heart of planning (ICFP)

Integrated Curriculum and Financial Planning (ICFP) is now central to DfE’s school resource management guidance. It’s about designing the best curriculum you can with the funding you actually have, by joining up:

• Curriculum (subjects, pathways, timetables)

• Staffing (teacher FTE, support staff, leadership structure)

• Finances (the multi-year envelope you can afford)

Key steps:

• Calculate core ICFP metrics: pupil-to-teacher ratios, class sizes, teacher contact ratios, leadership spans, support staff deployment.

• Identify outliers: schools with unusually high staff cost ratios or persistent small teaching groups.

• Work with heads to sketch options: redesign groups, adjust post-16 offers, reprofile support staff.

• Model each option’s impact on both finances and staffing before deciding.

This is where the biggest levers are, because staffing is your largest cost.

4. Treat reserves as strategic, not just a buffer

Recent benchmarking shows more trusts dipping into reserves to manage in-year pressures and more slipping below 5% reserves.

A strategic reserves policy should answer:

• Minimum safe level – expressed as % of income, weeks of expenditure or a cash figure.

• When planned deficits are acceptable – e.g., to fund restructuring, IT or estates investment, or to support a school in difficulty.

• Triggers for action – what happens, and who acts, if forecasts show reserves heading towards the floor?

5. Strengthen governance and early warning

Good governance relies on clear information and realistic risk assessment, not just compliance.

For MATs, that usually means:

• Concise board reports with clear visuals, not only spreadsheets

• A small set of early-warning indicators: forecast positions, pupil projections, staff cost ratios, agency spend, and the number of schools in structural deficit

• Regular, structured discussions about trade-offs between financial sustainability, curriculum, staffing and risk

A sustainable plan is a shared understanding, not just a model.

Taking your finance step-by-step – starting today

Step 1: Build a clean, trust-wide baseline

Objective: Agree a consistent picture of where you are and what happens if nothing changes.

Actions:

1. Consolidate all schools into a single three-year model.

2. Standardise assumptions for pay, inflation and grants.

3. Categorise schools as structurally surplus, broadly balanced or structurally in deficit (on a three-year view).

4. Plot reserves over the next three years on current assumptions.

Smaller trusts gain resilience and reduce the risk of nasty surprises. Growing and larger trusts can use this as the “before” picture to show the impact of improvements.

Step 2: Define what “sustainable” means for your trust

Objective: Turn general concern into specific targets.

Actions:

1. Agree a small set of metrics – e.g.:

- Minimum reserves % of income

- Maximum acceptable in-year deficit (and for how long)

- Target range for staff costs % of income

2. Set a time horizon – for example, “back to at least breakeven with reserves of X% by 2028–29”.

3. Build a “do-nothing” scenario: your baseline, made explicit.

4. Use DfE’s planning checks as prompts for board discussion.

For some boards this is about protecting stability; for others, about enabling responsible growth.

Step 3: Use ICFP to tackle staffing and curriculum

Objective: Identify changes that support both sustainability and educational intent.

Actions:

1. Calculate key ICFP metrics at school and trust level.

2. Identify outliers and priorities for change.

3. Co-design options with heads and principals.

4. Model options in your trust-wide tool, showing both financial and staffing impact.

5. Focus on a small number of high-impact changes first.

This provides you and the wider trust with a clear line of sight from curriculum and staffing decisions to the multi-year financial plan.

Step 4: Plan for growth, change and risk – not just a steady ship

Objective: Integrate change and risk into the plan.

Actions:

1. Map probable changes over 3–5 years: new schools, major capital projects, central restructures.

2. Create best, base and worst-case scenarios for each.

3. Include transitional costs: double running, redundancy, systems change.

4. Stress-test against external shocks: higher-than-expected pay awards, changes in funding, SEND pressures.

Smaller trusts focus on ensuring one difficult project doesn’t overwhelm the organisation; larger trusts tie this directly into strategic planning.

Step 5: Turn numbers into a clear board narrative

Objective: Help trustees understand and own the plan.

Actions:

1. Structure the story:

- Where we are now

- Where we want to be

- How we’ll get there

2. Use simple visuals: reserves graphs, RAG-rated school summaries, a small set of recurring KPIs.

3. Be honest about trade-offs: what you will protect, what may reduce, and what triggers a review.

4. Agree review points (termly or half-termly) and re-baseline annually after major changes.

With this in place, you can test its effectiveness by establishing whether the trustees can now explain the trust’s financial story in their own words.

Rethinking deficits: from “failure” to “managed recovery”

In this environment, it’s not realistic to assume that every trust can avoid deficits entirely.

The key distinction is between:

• Unplanned deficits – no clear cause, no agreed recovery timeline, no explicit reserves strategy.

• Planned, time-limited deficits with a business case – linked to specific transformation or support; underpinned by multi-year modelling; regularly reviewed with clear triggers if benefits don’t appear.

The aim of this playbook is to move you from drift to governed recovery.

What success could look like as you approach the new academic year in September

By the end of the 2025/26 academic year, a trust applying this playbook might reasonably say:

• “We use a single, consolidated budgeting and forecasting model across all schools.”

• “Our board has agreed clear financial sustainability metrics and understands where we stand.”

• “We use ICFP metrics to inform a small number of significant curriculum and staffing changes, with a three-year plan.”

• “Our three-year forecasts show either a credible path back to balance or a clearly defined gap and set of options.”

• “Trustees see concise, comprehensible dashboards and can describe the financial story themselves.”

Whatever your size or stage of development, the shift is the same: away from hoping things will work out, and towards using your planning power to manage risk, support schools and protect pupils’ experience as far as possible.

And finally - where tech fits into your plans

Software doesn’t change funding levels – but trying to deliver this level of planning on fragile spreadsheets quickly becomes unsafe.

A MAT-focused budgeting and forecasting platform can:

• Bring all schools into one aligned model

• Support multi-scenario forecasts

• Link ICFP metrics, staffing and budgets more clearly

• Produce board-ready reports and dashboards without rebuilding everything from scratch

The big calls remain with you and your board. Technology simply makes it easier to see the whole picture, test options and explain the plan with confidence.

Want to dive further into the benefits of the right budgeting platform for your trust’s finance setup? Speak to our team today to hear about how we’re helping more and more UK academy trusts budget better.