The anticipated supplementary bulletin has recently been issued by the ESFA. As with last year’s bulletin, it has the same status as the Academies Accounts Direction…
Following the publication of the secondary school league tables by the DFE in late January (which judge schools by ‘Progress 8’ and ‘Attainment 8’ – using raw GCSE results and other various data from the DfE), an interesting trend has emerged in relation to Multi-Academy Trusts (MATs).
Of the 62 MATs* running mainstream secondary schools examined by the DfE, 45% were found to be “performing significantly below average” while 30% were found to be “significantly above average.” It appears that MATs are either thriving and flourishing as the government model intended or they are failing, and in some cases, spectacularly so.
*Only includes trusts that have run at least 3 schools for 3 years or more.
The subject of MATs is a much talked about topic and clients are regularly asking us for advice and for insights into our experiences. It is a hugely important decision to undertake – from the perspective of both the school looking to join a MAT and the MAT/ lead school looking to take on new schools. There are many factors to consider and below we review some of the reasons why MATs have fallen into the “failing” category and note these as pitfalls to be avoided:
Rapid growth -There are now some extremely large national MATs with more than 70 schools in their trust and, following the favoured government model, the general trend everywhere is for MAT growth. There is a risk though that this growth can be too rapid and in some cases, has felt almost panicked -choose a MAT or be pushed into one. The consequence of growing too quickly has led in some cases to extreme pressure being put on central services such as finance. There has been inadequate resource to properly complete the take on procedures, new systems implementation, resolve differences and integrate uniform internal control policies while at the same time maintaining day to day operations. Often there has been a lack of thought into governance structures and delegations of responsibilities. And while these holes can be identified and patched in time, some MATs have continued to move forwards with more new school joiners before the holes have been plugged which has further exacerbated the problem and led to break downs.
Sponsoring too many failing schools -The government ideal for MATs is driven around the concept of the more successful schools sponsoring their poorer performing counterparts with the aim to improving their performance through knowledge, resource sharing and proven management. For this model to have a chance of working, sufficient time needs to be invested in this model and especially so when the schools involved are failing. This time needs to be very carefully balanced to ensure that the performance of the sponsoring school is still maintained. Throwing too many challenging schools into a MAT and/ or too quickly significantly increases the risk of overload and failure.
Too big and too far away – We feel that the benefits of being part of a MAT can only truly be realised if your partner schools are in close vicinity to you. This is certainly the case for resource sharing and meetings as well as to some extent exploitation of economies of scale. Also, more physical movement and presence between schools definitely helps the MAT to operate as one. In fact, with the MAT growth movement, we have seen some academies transferring out of national or other non-local MATs in favour of working with schools more local to them.
Indeed, the media has reported that in some areas there has almost been a feel of empire building, with some executive head teachers priding themselves on the number of schools in their MAT and receiving a remuneration package aligned to this. Related to the above point geography is another very important factor to consider. It appears that when MATs become too large, there is a loss of control over some of the ‘smaller ticket’ finances that can accumulate into more significant sums. Furthermore, with size comes anonymity and it is increasingly more likely that individual schools are not being given the focus and attention that they originally joined the MAT for.
The advantage of the MAT model works on the premise that with increasing size comes increasing economies of scale – for example, many functions can be centralised – such as admin, finance and HR and bulk ordering discounts can be exploited. However, recent findings from the National Foundation for Educational Research has found that larger MATs are significantly more likely to be in deficit than the smallest ones. It would appear that the optimisation of economies of scale would actually be at a smaller MAT size, perhaps around 20 schools.
Culture, leadership and governance – From our experiences, a factor that is often overlooked is the importance of having the right cultural fit amongst schools. A successful MAT is one where each school effectively enters into a marriage – and is there for the long term, willing to both give and take having the mind set to work together as a team. A MAT can fail if this concept is not bought into, if there is a culture of ‘them and us’ and ‘who is to blame?’ (This was a key reason attributed to the recent failing of Wakefield City Academy Trust).
Culture is often coupled to management of the lead school or the trust and so it is important that the fit is right between schools. Related to this, another factor to consider is the longevity of management. If changes or retirements are imminent, then who is likely to take over? Is the culture likely to change as a result of this change? Similarly, it is very important to consider governance, who is on the executive board and how this is run. Are board members suitably qualified/ experienced? Will they challenge decisions? Will they fairly represent your school?
Perhaps the most important factor to consider is finance. This will be explored in depth our next blog.
While the above outlines potential pitfalls and factors to consider with MATs, it is not to detract away from how successful and synergistic they can also be. Handled and managed correctly a MAT can significantly improve the educational outcomes of member schools and better financial strength can be achieved together. What this blog does underline though is the utmost importance of taking time and advice and making the right decision.
Our Academy Accounting teams can help with initial viability reviews, due diligence services or just general advice. Whatever stage of this process that you are at, we would be happy to help.