Academy trusts across the UK are operating in an increasingly challenging environment. Rising staffing costs, tighter budgets and heightened scrutiny from regulators mean finance leaders and trustees are under greater pressure than ever to demonstrate strong financial management while continuing to deliver positive educational outcomes.

Recent sector analysis highlights that staffing costs now absorb around 76% of academy expenditure on average, while reserves continue to reduce across many schools, particularly in the secondary sector. Against this backdrop, benchmarking is becoming a vital management tool for trusts seeking to make informed, evidence-based decisions.

Why benchmarking matters

Benchmarking allows academy trusts to compare their financial and operational performance against similar organisations. This can include reviewing metrics such as staffing expenditure, reserve levels, premises costs, pupil performance, attendance and workforce deployment.

However, effective benchmarking is not simply about comparing numbers. The most valuable insights come from analysing data against organisations with similar characteristics, such as size, structure, phase and pupil demographics.

Used properly, benchmarking provides more than reassurance around compliance. It helps trust leaders identify trends, challenge assumptions and pinpoint opportunities for improvement.

Financial pressures continue across the sector

Data gathered from more than 1,500 academies for the 2026 benchmarking report demonstrates that many trusts continue to face significant financial strain despite some signs of resilience across the sector.

Although fewer trusts reported in-year deficits during 2024/25, many schools — particularly primary academies — continue to experience pressure on reserves, with some reporting substantial deficits.

Benchmarking helps trusts determine whether these challenges reflect broader sector-wide trends or issues specific to their own financial structure, governance arrangements or operational model. Without this context, there is a risk that decisions may be delayed or resources directed ineffectively.

Staffing costs remain a key concern

One of the clearest themes emerging from current benchmarking data is the growing proportion of budgets allocated to staffing.

With staff costs now representing the majority of academy expenditure, trusts need clear visibility over whether staffing structures remain financially sustainable while still supporting educational priorities.

Benchmarking can help trusts evaluate areas including:

  • staff cost ratios
  • pupil-to-teacher ratios
  • teaching contact time
  • deployment of support staff
  • curriculum delivery models

These comparisons can also support Integrated Curriculum and Financial Planning (ICFP), enabling trusts to assess how staffing changes or curriculum adjustments may improve both affordability and educational outcomes.

Even relatively small workforce changes can have a major impact on financial sustainability, making regular benchmarking increasingly important.

Monitoring reserves and cash flow

Benchmarking reserve levels and cash positions is equally important, particularly as financial resilience varies significantly between primary and secondary academies.

While some primary academies have improved cash balances, many secondary schools continue to face declining reserves and tighter financial positions.

Reviewing reserves on a per-pupil basis rather than simply looking at overall balances can provide a more meaningful assessment of financial strength. This approach helps trustees and finance teams:

  • assess whether reserves are proportionate to risk
  • review reserve policies objectively
  • justify financial strategies to regulators and stakeholders
  • understand how their position compares with sector norms

Given increased scrutiny from the Department for Education regarding both excessive and insufficient reserves, comparative data can provide valuable assurance.

Supporting strategic decision-making

Benchmarking can significantly strengthen conversations at leadership and board level by shifting discussions away from assumptions and towards evidence-led decision-making.

For example, comparing staffing structures alongside educational outcomes can help determine whether current arrangements are delivering value and supporting school improvement.

Similarly, reviewing central service costs across multi-academy trusts may support decisions around growth plans, shared services or operational restructuring.

Importantly, benchmarking should not simply focus on reducing costs. Instead, it should help trusts answer wider strategic questions, including:

  • Are resources being invested effectively?
  • Do spending patterns align with educational priorities?
  • Are outcomes proportionate to current levels of expenditure?

Improving educational performance

Although often viewed as a financial exercise, benchmarking also plays an important role in school improvement.

Comparing data such as attendance, attainment, exclusions and pupil progress against similar schools can help identify strengths, highlight areas for improvement and support targeted interventions.

For multi-academy trusts, internal benchmarking can be particularly valuable, enabling leaders to identify trends across schools, share best practice and provide appropriate support where required.

Enhancing governance and accountability

For trustees and governors, benchmarking provides an additional layer of assurance and supports effective oversight.

Access to reliable comparative data enables boards to ask more informed questions, challenge constructively and focus attention on strategic risks rather than operational detail.

Benchmarking also promotes greater transparency by helping trusts clearly explain how their performance compares within the wider sector and what actions are being taken in response.

Making benchmarking effective

To deliver real value, benchmarking should form part of an ongoing management process rather than a one-off annual exercise.

The most effective approach involves:

  • reviewing data regularly
  • analysing trends over time
  • considering local context and operational factors
  • combining quantitative data with qualitative insight
  • using findings to inform planning and decision-making

The true benefit of benchmarking lies not in where a trust ranks, but in how insights are used to improve financial sustainability and educational outcomes.

Benchmarking is now a strategic necessity

The latest sector findings reinforce that benchmarking is no longer optional for academy trusts.

In an environment shaped by rising costs, regulatory change, demographic pressures and continued sector consolidation, trusts need robust data to support proactive leadership and long-term planning.

Embedding benchmarking into governance, financial oversight and strategic planning can help academy trusts make better-informed decisions, deploy resources effectively and continue delivering high-quality education sustainably.

This article was originally published to https://www.uhy-uk.com/insights/why-benchmarking-matters-more-ever-uk-academy-sector and is shared with kind permission.