Size matters

I often see the question asked – “Why can’t a Local Authority be viable but a MAT can, even when it will generally be larger?” There are a lot of moving parts to such a question but here are a few reasons why this will often be the case.

Firstly there is the issue of bulk buying discounts. It is often assumed that because LAs are larger they must be able to negotiate larger discounts than a smaller MAT. The important point here is about certainty of supply. An LA has limited power to force a school to do anything. Consequently when they are acting as a central buyer they often either are not negotiating for all their schools, or they are negotiating some form of “call off” deal. In this latter case a supplier will offer discounts based on a potential to supply, rather than a certainty. In both cases the LA is not negotiating with the buying power of all its schools. A supplier dealing with a MAT will generally know required purchase quantities which will enable them to offer higher discounts. I have seen this often enough.

Secondly, and I’m sure LAs won’t like this one, the levels of bureaucracy will differ widely between a MAT and an LA. This is not to suggest that one or the other of them has necessarily got it right or wrong, it’s just a fact based on personal observation. Bureaucracy costs money and adds to overhead. A smaller organisation will often be leaner than a larger one simply because the larger an organisation is then, generally, the more layers of management/administration it requires. I would argue as a part of this that perhaps many MATs have yet to get their central services right and this element of their cost base will increase rather than decrease.

Thirdly, and this applies to most  organisations, the newer the entity the less legacy operation it has and the the more automated and tech-enhanced its operation are. Where these are properly developed they are not only cheaper (relying as they do on computerisation rather than personal) but they are more efficient in delivery.

Fourthly, the more homogenous an organisation is the cheaper it is to deliver services. An LA has to consider the needs of all types of schools. Even in the least diverse LA there will be PRU’s, special schools, infant schools, primary schools, 11-16 schools, 11-19 schools and so on. Each of these could be any where on the spectrum from outstanding to being in special measures. Such range requires that there are central services to match all possibilities.Only the very largest MATs come anywhere near such range. Consequently the mid-sized MAT, which is focused on a particular type of school, can be much more coherent in developing its central offer, with less slack required.

None of this is to say that a MAT will always be more viable than an LA, or that there aren’t non-financial arguments that need to be aired, but where a suitably sized MAT organises itself effectively my view is that it can often be more financially efficient than an LA.