As a result of the move to a single tier state pension scheme, employers will  have to increase NICs by 3.4% to 13.8% of salaries, UHY Hacker Young says. The firm estimates this could typically cost secondary academies £100,000 a year more and primary academies £15,000 to £50,000 extra a year depending on the size of the school.

From 2016, the  current two tier state pension system, which had allowed people to contract out of the state second pension and therefore pay lower NICs,  is to be scrapped in favour of a flat-rate scheme. As part of this, the opt-out that allows employers to not pay NICs  into the second state pension for those enrolled in occupational schemes will be abolished.

UHY Hacker Young says that academy trusts pay into different defined benefit pension schemes for their teaching staff and non-teaching support staff, but both of the schemes are contracted out of the second state pension, and so currently academies, in common with most public sector bodies, can take advantage of the lower rates.

Allan Hickie, head of academies at UHY Hacker Young, said: ‘These changes are going to have a massive impact on academies’ budgets. Some tough decisions are going to have to be made - and soon, so that the necessary plans can be made ahead of time. Substantial efficiency savings are going to have to be identified and built into academies’ three-year financial plans now.’

There are currently almost 1700 secondary academies in the UK and over 1450 primary academies. UHY Hacker Young calculates the total deficient could reach around £200m and says that as staff costs can account for up to 80% of an academy's annual expenditure, there is little opportunity to make substantial savings elsewhere in the budget.

UHY Hacker Young  points out that academy governors are responsible for the financial oversight of the school, unlike the governors of local authority maintained schools. In addition, they are subject to the duties and responsibilities of company directors as well as being charitable trustees under charity law.

Hickie said:  ‘The weight of responsibility on academy governors is so high that some academies are already struggling to appoint suitable people, particularly those who are prepared to take on key roles such as “responsible officer” or chair of finance. The additional burden that these new pensions changes will bring with them is going to make it that much harder to recruit and retain academy governors going forward.’