The government鈥檚 claim that schools have the 鈥渉eadroom鈥 in school funding to cover pay rises and other increasing costs 鈥渄oes not resonate鈥 with academy trusts, an influential sector leader has warned. Leora Cruddas, the chief executive of the Confederation of School Trusts (CST), said her members anticipated 鈥渁 prolonged period of financial challenge and instability鈥, despite claims from ministers that schools could weather the financial storm. In its , the Department for Education estimated that schools overall could afford 拢2.4 billion in 鈥渘ew spending鈥 between 2022 and 2024 before facing a 鈥渘et pressure on their budgets鈥. 鈥楻eal concerns鈥 over financial sustainability Ministers have subsequently claimed schools could afford a 4.5 per cent average teacher pay rise next year with just 拢90 million of additional funding, after allocating 拢2 billion for each of the next two years at last year鈥檚 autumn statement. In a blog post, Cruddas said: 鈥淚n contrast to the findings of the DfE鈥, CST members anticipated a prolonged period of financial challenge. Leora Cruddas 鈥淭he DfE鈥檚 technical note and resultant conclusions about headroom in school budgets does not resonate with the experience and planning in school trusts. 鈥淭rust leaders have reported very real concerns about future financial sustainability.鈥 She warned trust budgets for 2022-23 were prepared last summer 鈥渂efore inflationary increases and before that year鈥檚 pay offers for teachers and support staff鈥. 鈥淲hilst inflation may be falling, it is not negative, and the cumulative impact across two years may only just be hitting budget plans.鈥 The DfE鈥檚 calculations also assumed that increases in top-up funding for pupils with special educational needs and disabilities in mainstream schools would cover rising costs. But Cruddas warned it was 鈥渆xtremely likely that increased costs of SEND provision in mainstream schools have exceeded increases in top-up funding鈥. The level of funding for the high-needs sector was also 鈥渧ery significantly lower than that experienced by mainstream schools鈥. And Cruddas warned capital investment in the school estate was now 鈥渦rgent and chronic鈥. Even the biggest trusts struggle The Diocese of Norwich Education and Academies Trust, which has 38 schools, said its financial position had 鈥渢ightened significantly鈥 this year, mostly as a result of pay rises from September 2022. Oliver Burwood, its chief executive, said additional funding pledged at the autumn statement was 鈥渕uch needed鈥 but came 鈥渢oo late鈥. 鈥淭his heaps additional pressure on schools when they are setting next year’s budget with us and is leading to some very difficult decisions around staffing. We continue to lobby with the sector for additional funds, but also for a longer-term financial settlement for all schools. 鈥淚t feels slightly farcical that yet again we are guessing at next year’s pay settlement, and what proportion of this will be funded. The result is felt by our leaders in academies and has a real-life impact upon those that we employ and care for.鈥 Chris Wiseman, the deputy chief executive of the 28-school E-ACT, said as a larger trust it was 鈥渁rguably more financially resilient than many鈥. It leveraged purchasing power for lower supply chain costs and pooled funding to centralise costs and move it 鈥渢o where it is most needed鈥. Calls for multi-year settlement But he said there was 鈥渘o getting away from the truth 鈥 the financial pressures facing schools are considerable鈥. 鈥淚t鈥檚 not about a single cost pressure…it鈥檚 the compound effect of all of this, at the same time.鈥 He said protecting pupils鈥 education would 鈥渞equire long-term thinking 鈥 not just a wing and a prayer from one budgeting cycle to the next鈥. One large trust finance lead, who asked to remain anonymous, said they were already running a deficit driven by high energy costs. Extra government funding did not cover costs, 鈥渨hich means that if we are to avoid insolvency then we need to reduce that cost base鈥. They also pointed to falling primary rolls, which they said were seen by the DfE as a 鈥渃ost saving to return to the Treasury鈥 but 鈥減rogressively undermining the economics of each class鈥. Cruddas urged the government to 鈥渨ork with us to build the resilience of the school system鈥. Additional funding announced in the autumn was 鈥渨elcome, but we need a sustainable, multi-year funding settlement which recognises the cost pressures on schools鈥. A government spokesperson said it s calculations showed that after accounting for pay increases in 2022, 拢2.4 billion would remain nationally in schools鈥 budgets to cover other rising costs.