Joining, growing 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 their report – The Economic Benefits of Joining, Establishing or Growing a Multi Academy Trust.
Running expenses, which includes everything from back office and admin costs to cleaning and catering, are a significant part of school expenditure. At secondary level, schools in MATs spend £1,490 per pupil in comparison to £1,539 in LA schools – that’s a saving of £49 per pupil. At primary school level, savings can also be seen but reduces to £6 per pupil. However, per pupil expenditure on teaching staff in primary schools as part of a Multi Academy Trust is still £23 per pupil higher than in Local Authority schools.
The report also identified that with larger MATs (those with between 11 and 70 academies) having higher average distances between academies, technology can actually 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 found that costs rise by 0.5% per pupil, per kilometer. But size matters – with medium sized MATs (6 to 10 academies) spending less than smaller MATs (less than 5 academies).
Jon Andrews, Director for School System and Performance at EPI, comments: “As the number of academies continues to grow, Multi Academy Trusts are playing an increasingly important role in education. As schools come under more and more pressure to find efficiencies, our analysis looks specifically at the extent to which schools joining a Multi Academy Trust 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’s potential to reduce costs further. If more MATs are able to realise these savings, it will mean more money for teaching and learning.”
Simon Harbridge, CEO at Stone, also comments: “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.”