MATs and Financial Stability: The Challenging Journey Towards Sustainable Growth

Paolo Gattavari Governance

MATs and Financial Stability: The Challenging Journey Towards Sustainable Growth


As the report Sustainable Growth in Multi Academy Trusts, published by Primary Site in summer 2020, has shown, in 2019 and early 2020 trusts’ growth has slowed, despite the Government’s encouragement to MATs leaders to take on new schools. The bulk of the research was undertaken between October 2019 and January 2020. Additional research, focusing on the impact of COVID-19 on the education sector, was carried out after the main phase. The COVID-19 crisis, the study contended, would likely affect MATs’ expansion projects in the short term, but it is not the main reason accounting for the slowdown in MAT growth. Many MAT leaders who contributed to the report maintained that they struggled to find suitable schools to join their trusts. Whereas, before 2016, there was an expectation that all schools would become academies, in recent years the number of schools looking to join a MAT has reduced. The Education Policy Institute has disclosed that numerous MATs that had expanded rapidly before 2016 ran into a number of problems, ranging from financial instability to difficulties to achieve good Ofsted ratings.


    Financial stability is certainly one of the key aspects that a MAT looking to expand should consider. Over the course of 2020, several MATs have been issued with a Financial Notice To Improve (FNTI). These MATs, the Government warned, displayed weaknesses in the management of their cashflow and, on some occasions, did not make correct use of revenue funds to support capital projects. ‘The lack of discipline in financial management and weak financial reporting highlight a potential lack of technical skill and experience in the finance team’, said Warwick Sharp, director of the of Academies and Maintained Schools at the Education and Skills Funding Agency (ESFA).

    At the end of last year, ESFA announced that MATs would face more rigorous financial checks to prevent other episodes of financial mismanagement. The ESFA has made clear that serious action will be taken whereby MATs leaders fail to implement a strategy for sustainable growth for their organisations.

    A survey conducted by the National Governance Association in September 2020 nonetheless revealed that boosting finances remains one of the main drivers for MAT growth. This means that, despite the risks outlined above, MATs are confident that it is feasible to grow without jeopardising the organisation’s financial stability - or that the financial pressures on them are such that this is a rational risk to take.

    How can it be possible to achieve this equilibrium? There is no universal formula for growth that can be applied to every MAT, simply because every step towards growth is complexified by a number of factors, chief among them size, location and finances.

    That said, there are some crucial elements that trusts looking to grow sustainably should take into account. The first is growth in accordance with vision. Growth projects should always be in line with the vision particular to each trust. Vision is a multifaceted concept. It can be used to indicate the educational vision, that is, the programme, and the values connected with it, by which the trust intends to ensure the best possible learning outcome for pupils, or the organisational structure characterising the trust. When a MAT is willing to take on new schools, it is essential that those schools fit with its vision, in the twofold meaning here explained. This ensures convergence on the educational programmes as well as successful blending in terms of organisational structures. This, in turn, constitutes an important requisite for financial stability.

    Having a clear vision permits to set well-defined objectives for growth. A MAT committed to helping vulnerable children, for instance, may well seek to sponsor schools in challenging circumstances, so as to elevate their status and thus ensure better education for pupils. On the other hand, a MAT that aspires to advance the Christian faith will be more inclined to take on schools sharing the same religious values.

    Having a clear vision permits to set well-defined objectives for growth.

    Another element facilitating sustainable growth is leadership. It would be disastrous for a MAT to seek to grow sustainably in the absence of strong and competent leaders, responsible for devising and implementing a strategy for the medium to the long term. Effective leaders should look for growth opportunities that align with the trust’s vision and are financially viable.

    Effectiveness alone is not enough. Leaders should also have the capacity to take on growth projects and, when realising that their organisations might struggle to meet growth targets, they should take advantage of initiatives such as the Trust Capacity Fund, which makes available resources supporting trust development.   

    Before taking on a new school, it is of paramount importance for a trust to carry out thorough due diligence. Due diligence should focus on many elements, such as finance, school governance and outcomes of Ofsted inspections. In the first instance, due diligence should aim to identify all the potential risks deriving from the onboarding of a new school. The second stage should determine whether such risks are too high, and could therefore jeopardize both the reputation and the financial stability of the trust. When a trust decides to take on a new school, it should evaluate how to mitigate the risks and craft a plan to optimise the process of merging.

    To conclude, while there is no exact formula for MATs’ successful and sustainable growth, there are certainly approaches that can facilitate it. A clear strategic vision, effective leadership and rigorous due diligence are indispensable elements for expanding a trust safeguarding its financial stability.  

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