Trust educating hundreds of vulnerable and excluded Norfolk children told it must improve ‘weak’ financial position

A Norfolk trust which educates vulnerable children has been told it must improve its 'weak financial position' or risk having its funding withdrawn.

The Department for Education (DfE) sent the financial notice to improve to Philip Harris, chair of trustees, at Engage Multi-Academy Trust.

Engage, which is based on Drayton High Road, educates many of the county's excluded and vulnerable children and has places commissioned by Norfolk County Council.

It runs:

• The Short Stay School for Norfolk (SSSfN), which has four main bases in Badersfield, Old Lakenham, King's Lynn and Gorleston, and educates children without a mainstream school place, many who have been excluded.

• Three Compass specialist therapeutic education centres in Belton, Lingwood and Pott Row.

• The Earthsea School, in Honingham, which educates children on a medium-term basis.

• Lodestar School, in Norwich, a short-term setting for children waiting for a SSSfN place. It was given permission to relocate to a bigger site in Norwich earlier this month.

All of the above come under the SSSfN banner - and count as one school.

• Pinetree School in Thetford, a free school for children who have struggled in mainstream education.

MORE: Almost 100 children waiting for an education as school expulsions in Norfolk soar

In the letter, Mike Pettifer, from the DfE, said the government had been monitoring the trust's progress since September.

'I recognise the cooperation and extensive discussions that have taken place between the trust and officials and the changes you have already made to strengthen accounting and internal financial controls,' he said. 'However, my concerns remain in relation to the weak financial position and financial management at the trust.'

He said there was 'continued concerns regarding the governance and oversight of financial management'.

But Mr Harris said the trust was working hard to provide its services more efficiently, and moved to reassure staff - who he described as 'truly some of the best in education' - that it would not result in job losses.

He said Engage was having 'positive conversations' with both the government and the council, and the quality of safeguarding and education provision remained strong.

But he said alternative provision was often 'overlooked', and that they were doing what they could within a tight budget.

While the SSSfN is technically made up of nine sites, it counts as one school - and is funded as such.

'We are funded for one caretaker,' he said, 'when we have five, for example. It's a national system that we are affected by, and we have to do what we can in a time of challenging financial problems.'

He said the amount spent on the SSSfN's estate was roughly eight times the amount it was funded.

The demand on the SSSfN has soared in Norfolk in recent years, as permanent exclusions continue to rise.

According to an Ofsted report from last year, there were roughly 350 children at the SSSfN, and another 21 at the Pinetree School.

MORE: Trust for vulnerable children launches training for Norfolk schools

The notice states that the trust has accrued a 'significant deficit'.

A draft finance review action plan must be provided by April 20, and the trust has been told to strengthen the executive team by replacing the business manager with a fully qualified accountant and the chief operating officer with 'someone with a proven track record in business management'.

Mr Pettifer said the notice would be lifted when requirements had been met, but that if the trust failed to do so, its funding agreement could be terminated.

In January, the trust's trading arm - Engage Educational Services - announced it would be ending its child support services for schools, leading to redundancies.

A county council spokesperson said they were working closely with the trust to ensure pupils received 'appropriate and effective educational provision'.

Accounts

In the trust's accounts, up to August last year, it says the vast majority of its income 'arises from contracts with local authorities who are stable and firm'.

In the year, the trust received £10m in grants from the Education and Skills Funding Agency (ESFA), £18,000 in ESFA capital grants.

Its total income was £11.4m. Its expenditure for the year was £12.9m. It is carrying a net deficit of £1m on restricted general funds, accounts show.

But it says reductions in expenditure of more than £400,000, a restructured model and a review will return the funds to surplus.

It says it has also negotiated an increase of £350,000 a year from Norfolk County Council.

Will you be affected? Email lauren.cope@archant.co.uk