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MATs spend less on expenses and more on teaching staff

The report identified how technology can help overcome geographical barriers, improve efficiencies and reduce costs

Posted by Hannah Vickers | February 02, 2017 | Law, finance, HR

Joining or establishing a Multi-Academy Trust (MAT) can result in economies of scale and efficiency savings, concludes new research by the Education Policy Institute (EPI). Overall, MATs spend less per pupil on running expenses and more on teaching staff than local authority (LA) schools, according to the report: “The Economic Benefits of Joining or Establishing a Multi-Academy Trust”, prepared for Stone Group, IT solutions provider for the public sector.

Running expenses, which includes everything from back office and administrative costs to cleaning and catering, are a significant part of school expenditure. At secondary level, schools in MATs spend £1,490 per pupil compared to £1,539 in LA schools – that’s a saving of £49 per pupil. Savings are also made at primary level but this figure reduces to £6 per pupil, but per pupil expenditure on teaching staff in primary schools in MATs is still £23 per pupil higher than in LA schools.

With larger MATs (those comprising of 11 academies up to around 70) having higher average academy distances, the report identified how technology can help overcome geographical barriers, improve efficiencies and reduce costs. 

Geography is significant in determining the extent to which economies of scale exist, with schools in MATs more closely clustered spending less per pupil on back office costs. The report finds that costs rise by 0.5 pence per pupil per km. But size matters – medium sized MATs (6 to 10 academies) spend less than smaller MATs (5 or fewer).

As the number of academies continues to grow, multi-academy trusts are playing an increasingly important role in education in England - Jon Andrews, Director for School System and Performance at the Education Policy Institute

Author of the report, Jon Andrews, Director for School System and Performance at the Education Policy Institute, commented: 

“As the number of academies continues to grow, multi-academy trusts are playing an increasingly important role in education in England. As schools come under increasing pressure to find efficiencies, our analysis looks specifically at the extent to which schools joining multi-academy trusts can save money through ‘economies of scale’.

“We find that secondary schools in MATs are currently spending £49 per pupil less on running costs than local authority schools and that MATs can save money by standardising practices and services including computer systems.  

“This effect is strongest once MATs reach a critical mass of around 3-6 academies. There is however, striking variation in back office spending between MATs of similar sizes, suggesting that there is potential to further reduce costs. If more MATs are able to realise these savings, it will mean more money for teaching and learning.”

Simon Harbridge, CEO at Stone Group, commented, “Protagonists of MATs have pointed to the financial benefits gained through economies of scale. But, until now, this was largely unproven and unquantifiable. The EPI report confirms what we believed to be true. By pooling resources, centralising back office services and using technology effectively, savings can be made and efficiencies gained, freeing up financial resources for teaching staff. 

“We were particularly interested in findings around clusters. We know that more geographically dispersed academies tend to incur greater costs but we also know first-hand that these MATs stand to benefit most from ICT to not only overcome barriers, but flourish in a collaborative environment. There’s a lot to be gained from joining with schools across the UK and we support MATs wishing to grow in this manner.”

The report: “The Economic Benefits of Joining or Establishing a Multi-Academy Trust” is free to download here.

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