You are here:

Last reviewed on 6 July 2018
Ref: 30048

Learn how one trust set its top-slicing strategy with a focus on investment. Get tips on designing the principles of your service, costing your investment plans and how to make this trust's approach work for you.

STEP Academy Trust is a MAT of 14 primary schools in south London and East Sussex. Chief finance and operations manager Ben March spoke to us about the trust's approach to 'top-slicing' academy budgets to fund central services.

School contributions to the central budget, and what they get for the money

STEP's academies currently contribute 7% of their general annual grant (GAG) to fund central trust functions and services.

The trust has reduced its rate from 8% as it has expanded, because economies of scale have saved money and common processes have saved staff time.

Economies of scale save money, and common processes save time

The contribution covers financial and operational services, including:

  • The CEO and CFO
  • Salaries for the heads of ICT, premises and catering
  • Compliance

It also covers an increasing amount of the teaching and learning support that the trust provides.

Looking ahead, the trust's short-term plans are for contribution levels of:

  • 7% per academy in 2018-19
  • 6% per academy in 2019-20

How the trust designs and costs its central offer

First, the trust works out what it needs to offer

Central staff work closely with senior leaders across the trust to design services to offer based on STEP's 3 'design principles':

  1. What trust leaders want their central services and support to look like now
  2. Implementing a structure for the next, not current, stage of development
  3. Directing as much resource as possible to teaching and learning

Developing your own design principles: what to think about

Get more advice on how to develop your trust's design principles in another article from The Key.

To develop their design principles, STEP combined:

  • Outcomes of business and strategic planning
  • The trust's vision and values
  • Insights gained through sector experience and knowledge
  • Lessons on service delivery and growth from outside the sector
  • Outcomes of collaboration with 'STEP SLT' (see below)

During half-termly 'STEP SLT' meetings, central staff, headteachers and school business managers discuss things like:

  • Where headteachers are feeling pressure or struggling to meet demands
  • The direction the curriculum is moving in, and how the trust is supporting its pupils
  • Challenges related to teaching and learning, such as progress or attainment for groups of pupils with certain characteristics
  • What the sector will look like in the future, and how the trust can support the vision of a self-improving school system
  • The quality of the services schools are currently receiving

Trust leaders then work together to identify what the best solutions or support structures would look like to overcome challenges and achieve the outcomes aspired to.

Costing the offer

When the services have been agreed, central trust staff determine:

  • How much each service will cost to deliver
  • What level of extra funding will be needed to support investment in future capacity
  • Whether these costs fit within the current budget for central spending

The trust always builds a cushion for investment into its schools' contribution levels, so it always has the resource to build the required capacity within the budget available.


This process is ongoing. The trust continuously evaluates the quality of its service and whether it is meeting schools' needs in the most appropriate way.

It does this using financial metrics as well as its internal self-evaluation framework.

How STEP's process has worked in practice

When STEP had only 4 schools, senior leaders in individual academies wanted the trust to free them up to devote more time to teaching and learning.

To achieve this, they wanted trust support for non-educational functions such as:

  • Finance and procurement
  • Catering
  • Premises
  • ICT
  • HR

Central staff worked closely with school staff to understand what their needs were in each of these areas. Collectively, the trust agreed on what each service should look like.

Central staff then arrived at the original 8% central contribution figure for each school by:

  • Determining the cost of each service
  • Setting an investment target
  • Assessing school budgets to set an equal contribution rate for every school

With more time to focus on teaching and learning, headteachers across the trust were eventually able to spend more time working together to identify common challenges and priorities, considering the best approaches to addressing these, and developing an idea of what the trust's future teaching and learning support might look like.

The process then repeats ...

Why it's important to focus on investment, as well as cost

STEP emphasises a focus on investment as a key element of a successful top-slicing strategy. Investment allows you to:

Investment ensures that adding more academies or services does not equal greater costs

  • Deliver value for money in the long term
  • Be insulated against sudden changes
  • Increase central trust operating capacity and scope without immediately raising costs for schools

For example, STEP was asked to take on 6 schools in East Sussex in 2016. It was in a financial position to do so, without increasing costs for its schools, because of its investment-focused approach.

It also didn't have to adjust its operating model or central team structure (with related costs to schools) because it had already invested in the central and executive capacity that allowed it to support more schools effectively.

This is evidence of effective financial management linked to strong long-term planning.

Investment in future capacity ensures that adding more academies or services does not equal greater costs to individual schools.

If the trust grows, it can direct additional contributions from new schools towards teaching and learning.

How to cost your investment plans

When planning for investment, STEP considers and calculates:

  • Salaries for additional members of staff
  • Costs of resources to support existing members of staff to expand their roles
  • Costs associated with taking senior leaders out of school to work across the trust
  • Costs to address additional training and professional development needs

Think carefully about how you communicate, to get buy-in

In the early days, STEP needed to justify the level of contribution required because it was high compared to other trusts. The trust approached this through one-to-one conversations that focused on the value to the trust of investing in the future.

However, in recent years any such push-back has disappeared. Why? In short: semantics matter!

The trust doesn't use the term 'top-slicing'. Leaders feel that this suggests reducing the whole, when the aim of a MAT is to increase the whole. For STEP, a MAT is more than the sum of its parts and the language should reflect that.

Instead, the trust talks about 'contributions to the STEP First Fund'. Using this phrasing, alongside the trust's design principles, has helped to create a culture of meeting challenges as one organisation, rather than as a collection of individual schools.

When everyone feels like they are sharing the same resources, with the same goals in mind, a culture of collaboration develops and there is less push-back at the idea of contributing to a central fund.

Make the STEP approach work for you

To adopt this approach successfully, your trust must:

  • Have clear principles to guide the function of your central services
  • Have strong strategic and business planning processes, so that you can clearly identify future challenges and think about ways to address them
  • Invest in functions and services before you need them
  • Be able to clearly communicate the value of investment to your schools

The Key has taken great care in publishing this article. However, some of the article's content and information may come from or link to third party sources whose quality, relevance, accuracy, completeness, currency and reliability we do not guarantee. Accordingly, we will not be held liable for any use of or reliance placed on this article's content or the links or downloads it provides. This article may contain information sourced from public sector bodies and licensed under the Open Government Licence v3.0.