Pam Tuckett, Head of Education at Bishop Fleming, stresses why it is crucial for Trusts to approve budgets that enable them to be agile, to cope with the constantly changing demands on the sector
Decision making during the pandemic has been difficult, with Multi-Academy Trusts (MATs) showing their strength in dealing with continual changes in guidance. This continues to be the case during lockdown 3.
The strongest and more centralised Trusts continue to lead the sector by sharing best practice across all areas of operation and have adapted quickly to manage new guidance and information.
The annual rate of sector growth slowed from 10.8% in 2019 to 7.8% in 2020, reflecting the impact of COVID on Trusts to focus more on operational matters rather than strategic decisions. Some of the below points indicate that strong leadership and knowledge has helped Trusts throughout the year:
- Having a central leadership team with the time and expertise to respond quickly to external events improves the impact a Trust can make across all areas of operations.
- Whilst MATs are still growing, it is the fully centralised MATs that are growing most, whilst the decentralised Trusts have decreased in size, indicating that some Trusts have either re-brokered individual schools or the Trusts themselves have been re-brokered.
- The skills and knowledge required of a Trustee continue to increase. Trust Boards are required to be far more effective in the way that the business of governance is undertaken. They must understand their legal as well as moral responsibilities, both as an employer and as a support to leaders. Specialist Trustees are vital, and well-balanced Trust Boards with a full skill set are better able to cope in a crisis situation.
- It has been non-educational issues that have highlighted some of the benefits of being in a MAT, particularly the larger MATs. However, the Academy sector has many stakeholders to consider, which can slow the necessary changes to the delivery of education.
These are all consistent with client feedback that moving to a more centralised model is often part of the conditions applied to a business case by the Head Teacher Board.
It is crucial that Trusts can approve accurate budgets, enabling them to be effective when dealing with constantly changing demands.
Despite the operating environment being incredibly tough, the first lockdown resulted in many schools saving money, helping to improve the financial position of the Academy Trust.
So far 2020 and the start of 2021 has been full of difficult choices, and tough decisions are still on the horizon. What is important is how Trusts make these decisions, how their resources are spent and how effective are their decisions.
Even Pre-COVID, Trusts were ensuring they spent their budgets as efficiently as possible. They will now have reviewed their staffing levels and identified potential cutbacks in non-essential expenditure, such as building maintenance. Lockdowns have also created a decrease in the need for supply cover, however, this is likely to return in the future.
Whilst the additional income from Government has been welcomed, it makes it impossible for Trusts to budget accurately. As a result, it is difficult to predict the financial outturn for 20/21.
In these increasingly challenging times, it is crucial that reliable management accounts are produced to aid decision-making. Trusts must also forecast their financial outturn to allow Trustees to make informed decisions.
Our continued advice to our clients and those within the sector remains as:
- Trustees should be prepared to robustly challenge the management accounts, budgets and forecasts to ensure the delivery of educational objectives in the most cost-effective way.
- When preparing budgets, try to avoid falling into the trap of automatically placing incremental increases on actual costs incurred in the previous year, but to remain focussed on the financial challenges, as this leads to fresh thinking and the consideration of alternatives. This has never been so important as it is right now.
- Budgets to be based on the Trust Improvement Plan to ensure resources are deployed in the most effective way.
The advantages of more centralised decision making have been welcomed by many schools who have been able to concentrate on the provision of education, without being distracted by decisions and implications of reopening.
The move to virtual governance has brought benefits such as time-saving, increasing inclusion and accessibility, yet poor internet connections and the risk of feeling more detached can be very real.
Whatever your view, the challenge for Boards is to pursue good practice and to allow virtual governance to feature in the continued quest for more effective governance. There is no doubt that the world of governance has changed and is unlikely to return to the way it was done pre-pandemic.