The Department for Education has set out its vision for creating “families of schools”, which means all local authority maintained schools becoming part of an academy trust. The Government has pointed to a number of benefits, including the cost savings and greater efficiencies schools can achieve when they pool resources for central services, such as estate management functions.
As a Trustee, I have experience of the first-hand benefits that this collaboration brings. And because I have a growing number of academy trust clients, I am also aware of some of the challenges academy trusts can face when seeking to expand by acquiring new members.
As more schools plan to join academy trusts, we will inevitably see increasing competition in the sector. What will academy trusts need to do to give themselves the best chance of success as they expand?
The role of Regional School Commissioners
The Government has delegated a number of responsibilities to Regional School Commissioners (RSC), including approving schools’ applications to join academy trusts. Therefore, if you have ambitions to expand by acquiring a new school, it is important to know what the RSC is looking for. As competition among trusts increases, it will be crucial to make any changes to systems and processes to ensure they are aligned with the RSC’s aims and objectives.
The key areas of focus for academy trusts are outlined on pages 22 to 24 of the Department for Education’s document Building Strong Academy Trusts. These range from having a “clear vision for its pupils and community of schools” to maintaining a “great record of pupil attainment and progress.”
I will focus on two, which are especially pertinent to our specialist offering at Thomas Westcott Chartered Accountants. These relate to an academy trust’s governance and financial systems.
Strong governance structure
The RSC expects an academy trust to have “a strong governance structure that can effectively adapt to the challenges of bringing in a new school.” That means it will look for good leadership and rigorous processes.
At a practical level, an academy trust should focus on having standardised processes in place for day-to-day operations. It will also involve adopting good, consistent processes across all areas of running the school, including teaching, learning and assessment, finance, IT and estates.
Reviewing (and, where necessary, improving) systems and processes is not only important for showing the RSC that the academy trust is well run. It will also be crucial for due diligence ahead of acquiring a school – ensuring that there is a strong foundation for what good looks like, which will then support the onboarding of a new school.
Before agreeing to a new acquisition, the RSC needs to feel confident in the trust’s financial position. Specifically, it will consider whether or not the trust has a “sustainable financial structure.”
The RSC will look at whether an academy trust has schools in a negative reserve position. In addition, it will assess whether or not student numbers are sustainable and ensure the school has the right staffing model with the correct balance of full-time, part-time and support staff.
The importance of an internal audit
Preparing to acquire a new school will take significant senior resource. That means it is crucial that the existing processes and controls in place are designed correctly and operating effectively. The best way to ensure you cover all areas is to carry out an internal audit. This should focus on much more than just your finances. A thorough internal audit will examine all your processes across teaching and learning, IT, estates and more. It will also cover your governance structure and your risk management processes – this can include your due diligence processes.
Commissioning an audit from external specialists will provide you with a full picture of how the trust is faring as well as identifying opportunities for improvements. This could prove vital in helping you design your due diligence processes ahead of your expansion.
If you are a growing academy trust, or a school preparing to join an academy trust, speak to our specialist team for advice.
By Adam Croney, Partner