Spending more on central teams does not inherently mean that trusts are diverting money away from teaching and learning.
The recent Schools Week article, Academy trust central teams gobble up £200m, raises an important question: does centralisation in academy trusts drive up costs, or does it actually save money? The reality is far more nuanced.
The key issue is not where the money sits (central or local) but whether the overall end-to-end cost is lower, and whether the trust is providing better services as a result. In other words, are trusts delivering more for less?
Consider a trust with a minimal top slice, just enough to cover the statutory roles of the chief executive and financial officers. This looks cost-effective on paper. Schools retain control over their own budgets and purchase what they need individually.
Now, let’s compare this to a trust with a higher top slice, which may be perceived as less efficient because it appears to be taking more money away from teaching and learning.
What if this trust is paying for almost everything which is non-teaching: heating, lighting, insurance, catering, health and safety, governance, IT, HR, estates and finance support?
And what if these items cost less because the trust has negotiated better discounts with suppliers, shared the costs of more expensive staff and invested in smart systems and automated workflows.
In this model, schools are not losing money; they are benefitting from centrally-negotiated cost efficiencies, accessing professional expertise that they might not afford individually, and freeing school leaders from non-teaching responsibilities.
As one CEO of a trust of between five and ten schools told me recently: “Centralising our operational functions has worked really well, and we have no desire to return to the old systems.”
The goal is not just about saving money
Headteachers see the value in the specialist expertise they can draw on, he explained, and there are more opportunities for career development, positioning the trust well for long-term success.
Where centralisation is done well, our CJK Aurora data shows that the cost of the service when assessed on a ‘like-for-like’ per-pupil basis tends to be lower.
In highly centralised trusts (with an 80-per cent or more level of centralisation), average per-pupil end-to-end costs are typically ten to fifteen per cent lower than in decentralised trusts. In fact, they can be as much as 40 per cent lower.
However, centralisation is not a panacea. Shared finance services are not always more efficient. For example, our benchmarking data also shows that smaller trusts with mainly secondary schools can be efficient if they are happy to leave most finance activity at school level and limit themselves to a very small central team.
In short, a well-structured trust empowers headteachers to focus on education while ensuring operational efficiency. The goal is not just about saving money, it’s about doing things better and ultimately ensuring that every pound spent enhances outcomes for pupils.
This highlights some key challenges:
- First, centralisation does not automatically save money; it must be carefully designed and managed.
- Next, some activities are best delivered locally. A one-size-fits-all approach can be inefficient if it removes flexibility where schools need it most.
- Avoiding duplication is also crucial. If trusts are not careful, central teams may end up replicating tasks that are still being handled at school level.
- And clear accountability is essential. Lack of clarity about who does what can leave school leaders feeling frustrated, believing they are paying more to the centre while still carrying the same operational burden.
- Finally, service quality matters. Central teams must be held to high service standards. If schools feel underserved, resentment towards centralisation can build.
In sum, academy trusts should not be judged by how much they spend on their central teams, but by what they achieve with that investment.
A trust that strikes the right balance – eliminating waste, enhancing service quality and ensuring that every pound is spent wisely – will be one that truly delivers the best for its pupils.
