Academy trusts are once again preparing to submit their Budget Forecast Return (BFR) to the Department for Education (DfE), with the deadline for the 2026/27 return set for 31 August 2026.

The BFR plays an important role in helping the DfE monitor the financial position of academy trusts across the sector. It also provides trusts with an opportunity to assess financial sustainability, review assumptions and identify potential risks over the coming years.

Producing an accurate and well-supported return is therefore essential.

What periods does the 2026 BFR cover?

The 2026 Budget Forecast Return requires academy trusts to provide financial forecasts covering several reporting periods, including:

  • September 2024 to March 2025 and April 2025 to August 2025
  • September 2025 to March 2026 and April 2026 to August 2026
  • September 2026 to March 2027 and April 2027 to August 2027
  • Summary forecasts for September 2027 to August 2028
  • Summary forecasts for September 2028 to August 2029

To complete the return accurately, trusts must prepare realistic projections for both income and expenditure across each reporting period.

Forecasting academy trust income

A key element of the BFR is estimating expected income levels over the forecast period.

Trusts will need to calculate anticipated funding based on pupil number projections and expected funding rates. This includes estimating General Annual Grant (GAG) income alongside other core funding streams such as pupil premium and special educational needs (SEN) funding.

In addition to government funding, trusts should also include projected income from other operational activities, which may include:

  • lettings income
  • catering services
  • trading activities
  • donations and fundraising
  • other commercial income streams

Accurate pupil forecasting remains particularly important, as fluctuations in pupil numbers can have a significant impact on future funding allocations.

Planning for expenditure pressures

For most academy trusts, staffing costs continue to represent the largest area of expenditure, typically accounting for between 75% and 80% of total costs.

When preparing forecasts, trusts should ensure they factor in:

  • anticipated salary increases
  • potential backdated pay awards
  • pension contribution changes
  • recruitment and staffing pressures

Alongside payroll costs, trusts must also consider non-pay expenditure, including ongoing contractual and operational commitments such as:

  • utilities and energy costs
  • service level agreements
  • operating lease commitments
  • maintenance and supplier contracts

Given continuing economic uncertainty, inflationary pressures should also be reflected within medium-term forecasts wherever possible.

Reviewing reserves and financial resilience

Once projected income and expenditure figures have been prepared, trusts should assess the impact on reserves and overall financial sustainability.

This includes reviewing whether anticipated reserve levels remain sufficient to support operational requirements, future investment plans and potential financial risks.

A detailed review of assumptions underpinning the forecast is equally important. Trust leaders and trustees should challenge whether forecasts are realistic, evidence-based and aligned with wider operational plans.

Key questions may include:

  • Do projected pupil numbers align with forecast income?
  • Have expected pay and pension increases been included?
  • Are inflation assumptions reasonable?
  • Do forecasts reflect known contractual commitments?
  • Is the trust maintaining appropriate reserve levels?

Why accuracy matters

The Budget Forecast Return is more than a compliance exercise. It provides academy trusts with an important opportunity to strengthen financial planning and identify potential pressures early.

Accurate forecasting supports better decision-making, improves financial oversight and helps ensure trusts remain resilient in an increasingly challenging funding environment.

Preparing your trust for submission

With the submission deadline approaching, now is the ideal time for academy trusts to review forecasting assumptions, update financial models and ensure supporting data is robust and reliable.

Early preparation can help reduce errors, improve confidence in the figures submitted and support more effective strategic planning for the years ahead.

This article was originally published to https://www.uhy-uk.com/insights/how-accurate-your-budget-forecast-return and is shared with kind permission.