21 February 2019
Multi-Academy Trusts are definitely on the rise, with 41.2% of all trusts now MATs - an increase of 3.2% on last year. The number of Academies has increased by over 1,000 on last year to 8,333, but the number of Trusts only increased to 2,806 from 2,694 last year, demonstrating that more and more schools are converting but are becoming part of a MAT rather than going it alone.
But is this a good thing?
Being part of a MAT can be a really positive experience for many Academy schools as they can benefit from support from other Academies within the Trust, share services such as finance and HR, and take advantage of economies of scale to reduce costs. A DfE survey in 2018 showed that most of the 326 MATs that it surveyed could show examples of financial efficiencies. All of this is great – but not all MATs are able to take advantage of these cost savings and many are finding themselves with large deficits.
So why is this?
There are a large number of reasons why cost savings and efficiencies are not always being achieved by MATs, but not having fully centralised services is a significant one. MATs usually start off small, possibly as a single Academy, then another Academy joins, forming the MAT, then another, and another. Before they know it, the Trust has 4 schools with fairly centralised services, in that the same accounting system is used and that there is a central finance team, but with different systems in operation at each school for purchases, a number of different bank accounts, and controls that work in one school but not another.
The MAT will still make savings on simple things such as external audit fees – but they are not reaching their full potential for cost savings. In order to be most efficient, processes and procedures should be consistent across all academies; capitalising on purchasing power and centralising this function to enable bulk buying and the discounts that ensue. Efficient MATs also don’t waste time reconciling unnecessary bank accounts and the finance team works effectively across all locations with the right people processing transactions. MATs tend to focus on reducing external costs such as professional fees, insurance and energy costs, but we all know that staff costs are the single biggest item of expenditure for Academies. Therefore ensuring that all staff, not just the teaching staff, are effective and efficient is important.
How to get it right
Getting the admin function of a MAT to work well is not an easy task – and often having a review of a MATs internal controls, systems and processes is a good way to identify what is working well and what isn’t. This may mean that additional fees will need to be incurred to get some advisors in to help, but in the long run, it can make a huge difference to how efficient a MAT can be.
This is where UHY can help. We can provide a review of your internal processes and controls and make recommendations for improvements that could make your Trust more effective. If you want to know more, please contact your nearest UHY academy specialist.
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