Collapsed academy chain WCAT expected to wind up solvent with reserve cash

A collapsed Yorkshire academy chain which has handed over its schools to other trusts is expected to wind up solvent and with a pot of reserves, according to its latest accounts.

Wakefield City Academies Trust is expected to wind-up solvent

Wakefield City Academies Trust (WCAT), which ran 21 primary and secondary schools in the region, had a cash balance of £2.054m and reserves totalling £656,000 for the year ending August 31, 2018.

Its annual report and financial statements, published on Tuesday, say: “It is envisaged that the Trust will be financially solvent beyond the point of re-brokering and until the point of wind-up.

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“There are reserves held as at the 31 August 2018 and the 2018/19 budget anticipates there will be reserves at the point the Trust is wound up.”

In a statement to The Yorkshire Post, the Trust said any surplus would be used for “the benefit 
of the children”, but did not specify how it could be allocated or spent.

Just days into the new school term in September 2017, WCAT’s board said the Trust did not have the capacity to bring about rapid improvements its academies needed and would work with the Department for Education (DfE) to transfer them to new sponsors.

A total of 18 of its schools had made the formal transition from WCAT by the end of the accounts period.

During the year, £84.7m worth of assets, including land, buildings, furniture and equipment, were transferred to the takeover trusts, which were also handed £17.3m in pension deficits.

As of the August year end, WCAT held funds of £37.6m, incorporating its assets as well as pension deficits totalling £7.5m.

Three schools – Carr Lodge Academy, Balby Carr Community Academy and Mexborough Academy – were still run by the trust at the time, but the former two moved to their new sponsors on September 1 last year and the latter in November.

The report notes that property and assets valuing around £43.6m were transferred over to their new trusts, after the accounts period, together with pension fund deficits of around £6.7m.

Staff costs in the year to last August totalled £35m and the salary costs for an interim chief executive, who resigned last June, were recorded as £120,000 to £130,000. A total of 323,000 was made in redundancy and severance payments.

The report states: “All academy staff have transferred to the new sponsors via TUPE arrangements.

“The majority of the Trust staff have left either via a settlement agreement or redundancy, or alternatively by obtaining work elsewhere.”

A spokesperson for WCAT said: “The Trustees have been committed to ensuring WCAT is wound up solvently and we are pleased the latest accounts reflect this objective remains on course to be fulfilled.

“It has been a difficult period for the trust and its staff but we are pleased the transition of our academies to new sponsors has run smoothly, with no disruption to children’s education.

“We are now working to ensure the solvent winding-up of WCAT within a reasonable timeframe.

“Provisions have been made within the accounts in respect of staffing and legal costs associated with winding up the Trust’s activities.

“Any surplus, complying with our charitable status, will be used for the benefit of the children.”

The accounts for WCAT, which has previously been accused of “asset-stripping” its schools, were given a clean audit with no regulatory issues.