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GAG Pooling has hit the news again recently with the REAch2 Academy Trust announcing plans to centralise the funding and reserves of its 60 schools. The ability to pool GAG monies has been around since 2013, albeit at first this required government approval. These days the Academy Trust Handbook sets out what a Trust must do if it pools its GAG monies. This includes considering the funding needs of each academy and having an appeals mechanism in place for schools that are not happy with the outcome. | | | |
GAG pooling is an alternative to top slicing, where MATs take a percentage of income (usually between three and five percent) from their schools’ budgets to fund their operational costs. This money goes towards paying the central team and providing central services such as school improvement, HR, IT and finance. However, many Trusts have not considered pooling as an option despite their Trusts running on a centralised basis. Often this is because of resistance (or potential resistance) from individual school heads or governors who feel that they might lose out under this system or risk losing their autonomy.
Advocates of pooling would say that pooling means that they can allocate funding so each school has the resources it needs to properly support its pupils, rather than being constrained by a budget that would put an artificial barrier around the school and reduce the Trust’s ability to support it. Other benefits include: - Successful GAG pooling can achieve a strategic approach to resourcing
- It promotes the ethos of one trust looking after all pupils’ interests
- It can give confidence to constituent academies that they will receive help in the future if needed, strengthening the sense of collaboration
- It targets funding to areas of greatest identified need
- Offers greater flexibility to respond to specific needs in individual academies, compared to top slicing
- May help trusts in financial difficulty, strengthening their financial sustainability
- A shared belief of an ‘all in this together’ mantra: the strongest will help the weakest
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On the other hand, challenges include: - High-performing schools may resist the loss of autonomy and control over their finances
- There may be a fear among schools that all their reserves would disappear
- Pooling is much harder to achieve if all academies are under financial pressure
- It requires everyone to be satisfied that all schools within the trust are working efficiently
- Weakens accountability in individual academies, enabling those with poor leadership to blame the removal of resources
- It may cause resentment within the Trust
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Probably the most important features of successful GAG pooling are openness, transparency and trust in distributing funds. For pooling to work it is important to have an objective set of criteria for collecting and allocating funding – one that everyone understands and believes is fair. There should be robust measures in place to monitor and evaluate the impact of spend and review processes. MATs must also be able to justify spend decisions and as mentioned earlier there is a requirement to have a process for appeals in place. Introducing GAG Pooling will not be without challenge. However, for Trusts with a clear vision and strategy it might be the way to deliver real benefits and change within all the Trust schools. | |
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If you would like to arrange a virtual meeting to discuss your specific circumstances in relation to any of the above, please get in touch with your usual contact within James Cowper Kreston or contact me using the details below.
Alex Peal Joint Managing Partner
Tel: +44 (0)7771 826264 | E: apeal@jamescowper.co.uk | |
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The information in this newsletter must not be relied on as giving sufficient advice in any specific case. | | | |
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