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Income down 13% at CfBT

publication date: Jan 3, 2012
Print
CfBT Education Trust (CfBT) has reported a 13% fall in income to £131m (2010: £151m) for the year ended 31 March 2011 according to accounts filed recently at Companies House. Despite the decline in income, the Trust reported a surplus on net incoming resources of £5.46m (2010: £2.6m deficit). At 31 March 2011 CfBT had net funds of £18.9m (2010: £21.3m).


The principal reason for the decline in income was a difficult trading environment particularly in the UK where income fell 24% to £77.4m (2010: £102.0m) following a 6% fall between FY09 and FY10. Recent double digit increases in income from contracts from the Middle East and South and South East Asia were not repeated in FY11 to offset the fall in income in the UK. The Middle East saw income increase 7% to £32.5m (2010: £30.3m) and South and South East Asia recorded an 8% increase to £17.5m (2010: £16.3m). Income from Africa increased 30% to £2.75m (2010: £2.11m).

 

The Middle East made the biggest contribution to CfBT’s surplus delivering an operating surplus of £3.69m (2010: £2.27m) – an operating margin of 11% (2010: 7%). The UK business delivered an operating surplus of £1.08m (2010: £6.01m deficit) – an operating margin of little more than 1%. South and South East Asia saw its operating surplus fall to £663k (2010: £955k) – an operating margin of 4% (2010: 6%).

 

The reduction in income in FY11 resulted in CfBT reducing its headcount by 100 through a mixture of voluntary and compulsory redundancies. The company also cut back its investment in some markets, closing its operations in the US (where CfBT had planned to enter the Charter School market sector) and Singapore (following the ending of CfBT’s Enhancing School English Language Programme) and transferring the management of one of its six UK schools to a parents’ group. A new core executive management team led by CEO Neil McIntosh with eight directors has been formed to provide increased clarity and greater focus for the organisation.

 

CfBT’s Consultancy services division which includes the Trust’s school inspection business saw income fall 8% to £59.3m (2010: £64.4m). Divisional costs were £52.3m (2010: £61.0m) resulting in a net operating surplus of £7.0m (2010: £3.4m).
CfBT is now into the third year of its £57.5m six-year contract to deliver school inspection services in the north of England. The contract covers all schools, state and independent, colleges, prisons, work-based learning providers and teacher training institutions. During FY11 undertook around 3,000 inspections. CfBT continues to manage the School Improvement Service in Lincolnshire which supports around 350 maintained schools and 300 nursery settings in the county and manages the City Learning Centre in Lambeth, a fully-traded service that provides support in the areas of arts, technology and family learning to teachers, pupils and parents.

In Abu Dhabi, CfBT is one of several providers working with the Abu Dhabi Education Council (ADEC) in its implementation of a Public Private Partnership in public schools aimed at improving student achievement and the quality of educational delivery. The Trust’s contract employs around 250 staff in various advisory and supporting roles to 36 schools in the Emirate.

 

During the year CfBT also delivered international consultancy projects including a contract in Bahrain to build capacity among school reviewers to inspect kindergarten and private schools in the country. And in early 2011 CfBT won an 18-month contract in Kenya with USAID to support the Ministry of Education in the decentralisation of the country’s Education Sector Support Programme to the districts and secondary school levels. In November 2011 CfBT announced that it had signed a strategic partnership with the Dubai government to work together on large scale research projects, support the development of a training hub for school inspectors and provide education consultancy and services to the Emirate’s Knowledge and Human Development Authority.

CfBT’s Teaching Services division generated income of £43.3m (2010: £40.6m) in FY11. However costs were £45.0m (2010: £42.5m excluding impairment of goodwill) resulting in a net operating deficit of £1.8m (2010: £1.9m deficit). During FY11 CfBT owned and managed six schools in the UK (one of which is now managed by a parents’ group) and an international school in South Africa, providing education to around 1,500 pupils. Additionally the Trust is currently sponsoring two state-funded academies and a Free School at junior level in Reading which opened in September 2011. CfBT has also formed a separate subsidiary charity – CfBT Schools Trust – to support all three types of state-funded academies (converting academies, sponsored academies and Free Schools) that want to join the CfBT group.

 

In April 2011 CfBT took over the internationally-respected language organisation CILT, the National Centre for Languages. Under the terms of the merger the majority of CILT services transferred to CfBT along with a number of the staff and the CILT brand. In August 2011 CILT won preferred provider status for grant funding of £3.5m from the DfE.

CfBT’s Counselling and Guidance division saw income fall 11% to £14.6m (2010: £16.4m) in FY11. Divisional costs also fell to £13.5m (2010: £17.1m) resulting in a net operating surplus of £1.14m (2010: £706k deficit). During FY11 CfBT provided the Connexions service to young people aged 13-19 in 11 English local authorities in West and South London. However, in April 2011, CfBT’s Connexions contract with the consortium of six south London councils was cancelled with three months notice, after only our days into a new three-year contract. CfBT reports it is challenging the validity of the termination of the contract and estimates that the redundancy payments due to CfBT’s former employees will amount to £1.6m – a liability which CfBT believes should be picked up by the consortium of south London local authorities.


CfBT’s Support to Educators division saw income fall 55% to £13.1m (2010: £28.8m) in FY211. Divisional costs were £12.1m (2010: £25.1m) resulting in a net operating surplus of £1.1m (2010: £3.7m). During the year CfBT continued to provide English lecturers to the Ministry of Higher Education in Oman and delivered programmes in India and Somalia.

 

In the 12 months to 31 March 2011 CfBT spent £281k (2010: £1.2m) awarding educational research grants and published 27 research papers covering a wide range of educational issues. A further £1.55m (2010: £2.33m) was spent on development costs.

Looking forward, CfBT’s is focusing on improving its financial performance and one of its aims is to be a significant provider of state-funded schooling by extending membership of the CfBT Schools Trust and supporting the opening of Free Schools. Internationally CfBT aims to grow its strategic consultancy services to support education system reform.

www.cfbt.com

 


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