5: PAC conclusion: We are concerned that the Education and Skills Funding Agency’s decision to use public money to prop up trusts in difficulty fails to address poor financial management within academy trusts. 5: PAC recommendation: The Education and Skills Funding Agency should within the Treasury Minute response, set out the criteria it uses to determine whether it is appropriate to provide additional funding to academy trusts in difficulty, or to write- off an academy’s debt. 5.1 The government agrees with the Committee’s recommendation. Recommendation implemented 5.2 Local authorities provide a support mechanism for maintained schools in financial difficulty, while the department is responsible for supporting academies in financial difficulty. 5.3 Academy trusts are responsible for managing their own finances and should have the leadership and management capability to resolve any issues themselves. The Education and Skills Funding Agency (ESFA) works closely with academy trusts and will support and challenge them to find the best outcome. Before any additional support is provided, the department expects academy trusts to make use of all support and tools and have a plan to address financial concerns. 5.4 In the most serious cases, and as a last resort, the ESFA may provide additional funding to preserve education provision. Academy trusts are expected to repay any additional funding once they have reached a stable financial position, and non-repayable funding is only used where there is no other means to protect pupils’ interests. 5.5 Provision of additional financial support is transparent. A framework for receiving additional financial support was published in November 2019. This framework sets out the different types of financial support available to academy trusts and for each type: • the eligibility criteria; • the potential conditions of funding; and • how the conditions of funding may vary depending on the value of funding. 5.6 Annual data on the provision of financial support, against this framework, is published alongside the Academy Sector Annual Report and Accounts, with further details set out in the ESFA annual accounts.