Carbon and COVID reporting

For the academic year to 30 August 2020 two significant areas of financial reporting were noted for the first time; carbon and COVID reporting. While the carbon reporting requirements are due to remain with us, hopefully the COVID reporting will only be required for 2020 and 2021. 

This article attempts to summarise the disclosures seen across a sample of our Multi-Academy Trust (MAT) clients and covers 20 MATs based on disclosures made in their 2020 accounts. The average MAT in our sample had seven schools and just under 4,000 pupils and the schools were located around the UK.

Carbon reporting

The new carbon reporting disclosures applies to Trusts which meet two or more of the following requirements, in either the current or previous financial year, and do not qualify as low energy users:

• turnover - more than £36 million (or £43.2 million gross for a charitable group)
• balance sheet total - more than £18 million (or £21.6 million gross for a charitable group)
• number of employees - monthly average more than 250.

If academy trusts report at a group level, the thresholds should consider these figures at aggregate level, including subsidiaries.

Charitable companies which qualify as low energy users (defined as a company which consumed 40,000 kWh of energy or less in the United Kingdom) during the period for which the directors’ report is prepared are exempt from the detailed disclosure requirements, although they must state in their report that this is why the information is not disclosed.

We found that most of the Trusts in our sample managed to calculate the amounts for disclosures in-house using the Education and Skills Funding Agency (ESFA) guidance, with only three Trusts choosing to employ a 3rd party consultant to produce the figures for them.

The average total energy consumption used to calculate emissions was 5,400,000 kWh, approximately 800,000 per school equating to 1,063 kWh per pupil being 1 tonne of CO2e per pupil. 

Clearly there is some variation in the sample with older buildings resulting in higher energy requirements and carbon outputs.

All of the MATs in the sample had plans to improve their energy requirements and cut their carbon emissions. These included ongoing projects across schools to replace fluorescent lighting with efficient LED equivalents, replacement roofing with efficient insulation capacity and new windows. 

COVID-19 has also had a positive impact with schools planning greater implementation of video conferencing for staff and board meetings, reducing the need for travel to and between sites. In the short term many schools had been running at partial heating loads, others had drained swimming pools to lower heating and electricity requirements and were reducing lighting in all areas not in use. The increased use of computers and technology had resulted in some schools buying more energy efficient laptops and chromebooks along with new IT servers with better energy efficiency.

Some Trusts were also installing smart meters across sites to improve the Trust's understanding of energy consumption. 

For some new teaching blocks, new boilers and new radiators were planned, whilst others were actively reducing the number of their diesel vehicles.

Some of the planned improvements were expected to reduce the carbon output by up to 25%.

Others plan to carry out an energy audit in order to understand actions that could be taken to reduce their carbon footprint, working with Salix to secure funding from the Public Sector Decarbonisation Scheme to analyse ways to reduce their CO2 footprint.

One Trust had established an Eco Council to monitor energy usage and run 'save energy' campaigns.

Several Trusts had utilised the Salix Energy Efficiency Fund (SEEF) and entered into Salix loans during the year to support energy saving LED lighting projects.

COVID Reporting

Using the same sample as for the carbon reporting we have looked at some of the disclosure made in respect of COVID-19. Across the sample just under £1 million had been claimed for Coronavirus Exceptional Support equating to just under £50,000 per Trust. The costs claimed predominantly related to the provision of online learning and enhanced cleaning costs. Others reported that the additional costs associated with the reopening of schools and associated cleaning had to be absorbed from the school's existing budget.

Approximately two thirds of our sample had made use of furloughing claiming £464,000 in total with an average claim of just under £6,000 per MAT for catering, support, breakfast and after-school club staff.

Many of the Trusts had supplied supermarket vouchers to families normally in receipt of free school meals, ahead of the government introducing a national scheme. 

Most Trusts had also worked to ensure their schools remained open during holiday periods to support key workers and vulnerable children within the local community during the COVID lockdown when other childcare options were not available. 

COVID had resulted in many expansion plans being delayed, whilst many Trusts had seen a loss of rental, catering and fundraising income.

Some Trusts reported seeing a high increase in the cost of supply staff 

Unfortunately, COVID-19 will have a continuing impact on schools this year. The effect will be both financial and operational. It looks unlikely that all schools will be returning at the February half term, with many schools believing that restrictions will continue until Easter. What we have seen is that Trusts have developed their strategies for dealing with remote learning and most are in a much stronger position this year than they were at the start of the Pandemic. The speed at which the sector has adapted should be commended. Whilst the Trusts, schools, teachers, pupils and parents are all looking forward to things getting back to normal later this year, in the meantime Trusts will continue to adapt.

For more information on how this could impact your business, contact Darren Rigden or your usual Crowe contact.