April 12, 2021

Centralisation a “strategic and cultural” philosophy for Multi-Academy Trust growth, according to new IMP Software research

There is an increasing approach by Multi-Academy Trusts (MATs) to see financial and non-financial centralisation as a “strategic and cultural choice”, according to new research sponsored by IMP Software.

A Growing Philosophy: How are Multi-Academy Trusts developing their operating models through centralisation? provides unique insight on how Trusts in different UK regions and of different sizes are approaching this question, and with what effect.

The report draws on in-depth interviews with MAT Chief Executives, Chief Operating Officers and Chief Financial Officers. Discussion explored how Trusts have developed their operating models in light of academy freedoms – specifically around GAG pooling and other forms of centralisation (financial and non-financial) to provide more efficiencies. Trust leaders were asked them about the operating model they had chosen to take (and the strategic drivers behind it), their views and experiences of implementation, and the benefits and impact this has had on their systems and the Trust as a whole.

The research, undertaken in autumn 2020, finds:

  • The importance of centralisation as a strategic decision, linked to the ethos and culture of any one MAT, and how it should be viewed as part of a bigger discussion than one about financial management and related processes.
  • Whilst centralisation can still be a controversial topic, schools within the Trusts interviewed to appear to be generally supportive of the process. This is due to their involvement from the beginning and their belief in the wider purpose of the strategy, which is further supported by the benefits being felt at school level as they are pushed back to the frontline to support teaching and learning.
  • Systems must not lead the strategy. With all of the interviews that referenced systems, these were used to help implement the Trust’s vision, which was already established and communicated to all stakeholders, not the other way round. Therefore a MAT’s systems strategy needs to ensure that core tools are able to evolve with it throughout the Trust’s journey to support implementation.
  • GAG pooling is often interpreted as one of the more explicit outcomes of centralisation. The Kreston Academies Benchmark 2020 report found that whilst the level of interest from MATs in GAG pooling is growing, it is proving harder to establish and few Trusts have adopted this approach. In the snapshot of MATs featured in this report, however, GAG pooling is implemented at a representatively high scale suggesting an increasing move for more Trusts to embark on such a journey.
  • There is clear evidence of the impact of financial (and wider) approaches to centralisation as they evolve or grow. Some common learnings have been provided for other MATs embarking on the same journey. A core philosophy appears to be the most fundamental requirement for success.

A Growing Philosophy: How are Multi-Academy Trusts developing their operating models through centralisation? follows the publication of another report, Pooling Reserves and Budget Centralisation in MATs https://cdn.impsoftware.co.uk/2020/07/IMP-Software-CJK-Associates-16.pdf, which identified that the question is not so much about whether to centralise or not, but actually ‘how’ and ‘to what extent’.

IMP Co-Founder Will Jordan said: “Our findings, and subsequent discussions with MAT leaders, identified a gap around good practice and knowledge-sharing around these issues. There was a clear appetite for better, more in-depth, insight on centralisation journeys amongst this community, hence why we wanted to strengthen understanding with a further report. This is designed to shine a spotlight on the varied approaches out there, which will give other Trusts some ideas around how things could be achieved within their own organisation, with their specific context, culture and values. In my own experience, having worked with MATs for 10 years, this is still very much an ongoing debate and a journey but the general direction of travel is towards greater centralisation.”

Leora Cruddas, CEO of the Confederation of School Trusts, added: “Trusts need to be aware of inflection points – the point where we cannot keep doing what we have been doing or the model fails – in their growth journey. For example, centralising operational functions may be one way of preparing for growth. The question around what is centralised, how and to what end, is one that is pertinent across the sector. What is key is feeling a strong organisational identity, one that is much more interconnected. It is important to set the educational and organisational philosophy early on in the Trust’s journey and the culture will be stronger for it. When this is done effectively we have seen evidence of clear impact on educational outcomes, underpinned by strong finance and operations.”

The full report can be downloaded at https://www.impsoftware.co.uk/blog/a-growing-philosophy-how-are-multi-academy-trusts-developing-their-operating-models-through-centralisation/