Academy trust top slicing is on the up (but do schools get better deal?)

As two trusts top-slice almost 10%, chiefs say running services in-house saves time and money for heads

As two trusts top-slice almost 10%, chiefs say running services in-house saves time and money for heads

23 Feb 2024, 7:00

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Two of England’s largest academy trusts now top-slice almost 10 per cent from their schools’ budgets to fund beefed-up central teams.

But trust chiefs say running more services – like estates management and IT – in house frees up time for headteachers, as well as providing more cash for their schools.

In all, 13 (26 per cent) of the 50 biggest MATs increased their top-slice charges, analysis of annual accounts for 2022-23 shows. Only two cut their fees, while 21 held them at the same level as the previous year.

Daniel Kebede
Daniel Kebede

Top-slice charges pay for the central services provided by academy trusts.

National Education Union general secretary Daniel Kebede said that “academisation was sold as schools… [having] more money and freedom. The reality is the opposite.

“Worse still, schools in MATs have no say over how their money is spent and no way of challenging the level of top-slice.”

‘It makes us more efficient’

Greenwood Academies Trust increased its top slice last year from 5.5 per cent to 9.25 per cent.

Chief executive Wayne Norrie said this was to manage finance and site management teams from the centre, meaning schools aren’t actually paying more.

“Instead of having a traditional site manager… we’ve got 24-hour coverage.

It will save schools money in the long term by being more efficient, but it will also release leaders to concentrate on teaching and learning more.”

Wayne Norrie
Wayne Norrie

The Unity Schools Partnership lifted its top-slice from 7.25 per cent to 9.5 per cent so that it could “bring together all IT hardware spend”.

It also centralised tech support, putting an end to schools having to buy it in “from a variety of sources”.

The Co-operative Academies Trust raised its top-slice from a 4.5 per cent flat rate to up to 8 per cent for its largest schools.

CEO Chris Tomlinson said this was to introduce a trust-wide IT system and an increase in central contracts.

But he added: “I reckon, for a one-form primary, we save them between £40,000 and £60,000 because they are no longer having to pay for things like ICT and HR.”

The Kreston accountancy group annual report found the average top-slice among large trusts stood at 5.4 per cent.

Small chains, meanwhile, tended to slice 7.4 per cent, suggesting that “synergies are being achieved” as chains grow. 

Centralised trusts spend more on kids

Data confirms that centralised trusts get more bang for their buck.

Kreston revealed that such trusts spend £7,289 on total costs per pupil, compared with £7,159 for non-centralised trusts – £130 more per pupil. They also have higher average free reserves.

Sir David Carter
Sir David Carter

The study found 61 per cent of trusts have “fully” centralised functions – such as HR and finance and estates management – across their schools. This compares with 55 per cent the year before.

Kevin Connor, head of academies at chartered accountants Bishop Fleming and one of the Kreston report’s authors, believes the search for “every extra percentage of efficiency” has “got to be a consequence of the current financial position”.

But Sir David Carter, the former national schools commissioner, said “building a robust operating model is the way to survive these challenges and to build for the future”.

United Learning Trust CEO Jon Coles, whose 89-school MAT is England’s largest, saw his top-slice return to 2018-19 levels in cash terms last year.

The trust charges schools based on a per-pupil amount.

But, after accounting for inflation, the trust said that income spent at the centre has dropped from 3.7 per cent to 3.1 per cent.

“We actually do more at the centre now than we did then,” Coles said. “The reason for that is growth. As we’ve grown, we’ve been able to do things more efficiently.

“For example, we pay teachers more. The scale we do [back-office functions] at means we’re able to save money.”

‘Schools aren’t excluded from decisions’

Leora Cruddas
Leora Cruddas

Confederation of School Trusts chief executive Leora Cruddas added that running services centrally also did not mean “schools, principals or other leaders are excluded from decisions in these areas, but more often that they are supported by experts who work across the trust”.

As well as top-slicing, trusts can fund their central services by GAG pooling – where they collect all their schools’ budgets first before dishing out funds based on their own formula, which does not have to be published.

Seven of the 50 biggest MATs employ this method, but more are considering it.

Councils also top-slice schools to fund their central services but up-to-date figures are hard to come by.

The services provided are also likely to be less substantial.

However local authorities now have additional powers to top-slice school budgets to cover the shortfall created by the government scrapping the £50 million school improvement grant.

In 2018-19, we revealed that 36 LAs had top-sliced more than £22.4 million alone.

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One comment

  1. Johnny Kyriacou

    Hello, there is a slight inaccuracy at the end of your article regarding LAs top slicing for school improvement. They cannot top slice, they need to ask their schools for permission and it needs to be voted on to be accepted. This is in contrast to top slicing where schools don’t have a choice.