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In July 2010, the Academies Act enabled many schools in England to become an academy. All those that have been approved as academies by the government have exempt charity status, with the Education and Skills Funding Agency as their principal regulator rather than the Charity Commission.

Since the Act was implemented, around two-thirds of secondary schools and a fifth of primary schools have become academies. By 2015/16, the annual turnover for academies in England was £20.5bn, which compares to £73.1bn for charities registered with the Charity Commission in December 2016. Although the government has gone back on plans to make all schools academies by the end of 2020, it is providing “support” and “encouragement” to make the transition.

Size and structure

Entities vary from the single-academy structures with one school to the large multi-academy trusts (MATs) with over 40 schools. My own MAT (the Oxford Diocesan Schools Trust, or “ODST”) is an exempt charity and has grown in the last three years from six to 29 schools. Our turnover has gone from £6m to over £30m and we now employ over 1,000 staff.

I’m also working on a part-time basis as FD to support the setup of a brand-new MAT, the Berkshire Schools Trust (BST), which has started with two schools. Neither ODST or BST is the right or wrong size, they are just different.

Talking to my fellow FDs at other MATs, there is a view that with the ever increasing pressure on costs and the pressure to deliver improvement, in the longer term many MATS will need to be over 5,000 pupils (or over 20 schools) in size to be financially and operationally viable, and to provide the specialist support and improvement services needed. We are already seeing quite large mergers take place, and as with other sectors (such as housing associations), there is a view that in the years ahead we will see a degree of consolidation and rationalisation.

The majority of the MATs work on the basis of the overarching trust charging a “top-slice” from the central government funding given to the individual schools. In many ways, this simply can be seen as the MAT replacing the local authority as the provider of services and advice. The average “top-slice” is 5.3 per cent but I have seen variations from 2.5 per cent through to 12 per cent depending on the MAT, the level of local delegation and the level of services included and provided from the centre.

Lessons learnt

I joined the academy schools sector in June 2015, having previously spent 15 years as director for finance and support services at the faith charities BMS World Mission and the Baptist Union of Great Britain. Here are some of the lessons that I’ve learnt from the last two-and-a-half years in this rapidly changing environment that can be shared with the wider charity sector. I’ve also posed some questions that you can use to assess your own situation.

Keeping “on mission”

It’s very easy in our fast-growing sector to lose sight of what it is all about and why the organisation exists. One of my colleagues judges our board meetings by how long it takes before we mention the word “child” and how much time we give to discussing their progress. It’s easy in the MAT and charity world to dive into areas such as finances and new buildings.

Next time you are in a board meeting, ask yourself: how prominent was the main objective of your charity and was it centre stage in discussions?

Flexible planning

Do you have a staffing and financial plan that can cope with different growth scenarios? We do a few things that have helped with our planning:

• We agree a detailed plan for the year ahead with outline plans for year two and three;
• We only recruit additional permanent staff when we have the guaranteed income (ie actual schools in the Trust);
• We agree criteria for taking on new schools with the board;
• In times of transition or bulge, we have used temporary staff to cover growth which has helped us cope with volatility.

Professional advisers

Arriving in this sector, I found that there were six firms of auditors and six firms of lawyers which are leaders in the sector. Having professional advisers that understand your sector and discipline rather than generalists is crucial in my opinion, particularly when setting up a new organisation. We have also sought firms that match our ethos and values.

In addition, we have agreed with them up front, as part of the tender process, a costed schedule of additional assurance work and support (eg VAT reviews, school internal audit visits) to help us provide assurance to the trustees and to make sure we do not drop any balls on the way.

Looking for diamonds

Have you established the right blend of external partnerships and supplier arrangements that enhance your reputation and best enable efficient delivery of your mission? When I joined the MAT, we initially had a very small team yet faced a large service expectation from our schools. Fortunately, I found that the Oxford Diocese had a fantastic buildings team with many years of experience in helping schools to look after their premises and sites. Rather than recruit a new person or outsource, we found the best value was to use this team.

Similarly, we felt it was important to implement a very high standard for health and safety. We went out to tender and found that the best partner was the local authority health and safety team, with which we have established an excellent and valued partnership.

In both of these cases, the service support is scalable, allowing us to grow rapidly without service dilution.

Keeping trustees on board

Is your board and the executive team on the same page or do you need to “slow down to move faster”? When the business is growing so quickly (ie over 50 per cent per annum), there is a risk that the usual four or six trustee meetings per year is insufficient. There is a risk of disconnection between the executive team who are head down and pushing ahead on growth, and the trustee team who feel behind the curve. It’s also a concern to ensure that new trustees are well inducted as they are getting onto a fast-moving train.

One of the things that our board found very helpful was to have a day offsite to talk about strategy and governance. This was facilitated independently by the governance consultant Dorothy Dalton, and meant we got quality time and space to build our relationship and make sure everyone was together before moving ahead to the next phase of our journey.

An evolving sector

The academies sector is fast-changing and evolving. While government policy will continue to change, it is crucial for the future of our communities that we as charity finance professionals face the changes robustly, bringing creative solutions and all our professional skills to bear. 

David Locke is chief operating officer at the Oxford Diocesan Schools Trust