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Academy trusts should ‘exchange’ back office services



Shared services are logical, Marcus Robinson, a partner at professional services firm PwC told delegates at the 2nd annual MAT summit.

“But they typically fall down because most people, and most organisations, are happy for others to share their services but aren’t prepared to go and share from others.”

As schools face squeezed budgets, shared back-office functions are increasingly seen as a way to make efficiencies.

In the 2015 Budget, the chancellor highlighted that costs for functions such as HR and finance, varied between schools “from £202 to £1,432 per pupil”.

Robinson said each school having its own services was likely to be untenable and suggested to delegates that an “exchange” model of shared services between multi-academy trusts might boost efficiency.

“Why can’t those MATs that have already invested and already have good services be able to share those out to other MATs in a way that feels commercial, but in a way that generates a surplus?”

He described how PwC “came very close” to working with a multi-academy trust on a joint venture, “where the idea was that we would create a new business that would provide all non-teaching services back into the MAT. The way that it operated was at historic cost, but it aimed to do better than that [financially], thereby creating a surplus that went back into the MAT, sharing out again into schools.”

 

Peter Lauener
Peter Lauener

In 2015, AET, which then ran 76 schools, developed a £400 million bid in collaboration with PwC to outsource its services. However, the proposal was considered “novel and contentious” by the Education Funding Agency (EFA), and was later stopped.

Head of the EFA, Peter Lauener (pictured), said the agency would not agree to the proposal because of “wider concerns”.

Robinson suggested to delegates that instead of a “monopolistic joint venture”, future policy could allow trusts to share services they had developed and then allow “gaps” to be filled by commercial organisations.



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5 Comments

  1. RogerOThornhill

    That’ll be like the shared services that Local Authorities used to run before the government decided they didn’t like that model any longer. Talk about reinventing the wheel…

  2. The recent Jaques Peretti BBC programme about how government wastes our money at every level highlighted PWC’s secret motto “land and expand” ie get into an LA or MAT, do a simple health check, find some “major” problems which only PWC can put right, then charge the earth to do some basic work that any half-competent professional could do at a fraction of the cost. Watch them hoover up the academy sector in coming years.

  3. ‘At present academy sponsors are barred from making a profit. There is no legislative reason why profit should not be allowed (these schools are simply classified as independent schools)…However, if we seek a large number of chains to drive expansion in the schools sector then this is one nettle that will need to be grasped – at least by allowing management fees between schools and private companies.’
    From Policy Exchange document ‘Blocking the Best’, published March 2010, anticipating the growth of ‘gaps’ in supplying services to schools which, according to PwC, can then be filled by commercial organisations.
    The then shadow education secretary, Michael Gove, gave the keynote speech at the document’s launch. He told the audience he would let groups like Serco run schools if they wished to do so. http://www.localschoolsnetwork.org.uk/2011/10/gove-is-in-favour-of-profit-making-companies-running-state-schools/%23sthash.hzb5uyax.dpuf

  4. ‘Each school having its own services was likely to be untenable’ – quite so. And one of the points made in opposition to the move to allow individual schools to convert to Academy status post 2010. Having a service offered to a large numbers of schools by the local authority is a much more efficient model.

    Many individual academies still make use of LA services which are now often offered on a traded basis. And of course the majority of primary schools are still maintained schools receiving such services from their LA’s (where they have still been able or willing to provide them).

    Having a large number of very small MATs is not going to fix this any time soon so we will see a disproportionate amount of school budgets being spent on these services to the detriment of spending on frontline education.