Our recent report, ‘A Growing Philosophy: How are multi-academy trusts developing their operating models through centralisation?‘ uncovered a debate around centralisation, as well as clearly laying out what it is, its benefits, and how to implement it. Many models are available, so how do you know what’s best for your trust?
The pooling of General Annual Grant (GAG), where a trust receives its funding centrally and then allocates budgets to the individual schools, is often interpreted as one of the more explicit outcomes of centralisation. Whilst the textbook definition is a straightforward one, the reality is that culture, values and context will drive what GAG pooling means to each individual trust.
In the snapshot of MATs featured in our Autumn 2020 report, GAG pooling is actually being implemented at a considerable rate, demonstrating an increase in trusts embark on the journey. Here, we’ve rounded up a few spokespeople for trusts who’ve taken the leap on GAG pooling – and their reasons for doing so.
At the heart of MATs’ reason for being
Leora Cruddas, CEO of the Confederation of School Trusts, emphasised the importance of GAG pooling being “motivated by the principle of creating a single organisational culture as well as fairness and equity”. That is the ethos at Cornerstone Academy Trust, for example, whose operating model is to pool everything – educational, financial and operational – and therefore GAG pooling is a simple extension of that. “If my motivation is to give the best to every child in the trust, then the distribution of the money is on a needs basis,” CEO Jonathan Bishop told us in the report. “I have three children in my family, and I do not necessarily buy each child the same thing at the same point every time. It is the fairness based on the need at that point in time for the good of the family.”
Levelling the playing field for all schools
Academy Transformation Trust spoke about the benefits of centrally collecting funding and allocating according to need. “The key objective was to operate as a MAT should, which is as one entity,” revealed CFO Peter Wilson. “We felt this was required because our academies operate under 10 local authorities, with different funding levels for primary and secondary schools and that is providing inequality to each of the academies. Some academies were really struggling, others were doing better financially, so GAG pooling across the Trust gives everybody that even keel.” Aspire Academy Trust’s Operations Director Tim Hooper concurred with this sentiment: “We felt that GAG pooling was more appropriate to meet the needs of all schools across the trust as it is more in line with our organisational ethos of being all in it together. All schools contribute to these budgets.”
Removing uncertainty at trust level
Aspire Academy Trust and L.E.A.D. Academy Trust both expressed GAG pooling as partly a response to issues around the National Funding Formula (NFF). “The NFF will come, and in our case there is a lot of volatility in that 10 of our 25 academies are based in Nottingham which currently has the highest funding per pupil outside of London,” said L.E.A.D Deputy CEO Bobby Thandi. “There will be a ‘level down’ at some point and it got to the stage where we felt we needed take control of the NFF and ensure there is no negative impact on our academies.” Tim Hooper agreed: “Whilst all of our schools are based in the same region and we share the same NFF, there are a lot of discrepancies within that, so this reflects the needs across the Trust rather than schools directing resources.”
Flexibility for local level responses
Despite not following the exact approach of others, Dartmoor Multi-Academy Trust is moving towards what it describes as a “GAG pooling way of working”. Chief Finance and Operations Officer Susanne Kiff outlined the rationale: “This gives us the opportunity to become more flexible and, for instance, use this approach to focus on schools which may have experienced a dip in outcomes and use our funding to resource an extra teacher or move another teacher across from another school if needed. It is about the ability to support schools as needed, and that need may change from year to year, with different schools requiring a focus.” Bobby Thandi also told us that, for L.E.A.D. Academy Trust, GAG pooling meant they could have funds to allocate with AWPU in future years and “therefore be in a really secure place”.
Effective monitoring and reporting
Cornerstone Academy Trust highlighted how reporting “gets a little bit easier when you pool”. Jonathan Bishop explained: “At that top level you are not needing to examine more and more schools depending on the size of your MAT in terms of income and expenditure. You also start to get into very infrastructural conversations when you start talking about pooling resources – and that, for me, is where we are starting to see those real benefits. You get into those efficiencies once you start looking at what you are going to pool.” Peter Wilson added: “For us GAG pooling was needed to redistribute funding fairly and help with monitoring and comparisons across the trust. The biggest thing is trying to get Principals and local academy committees to understand we are one MAT and the fact that one academy might have reserves is irrelevant if the whole trust does not.”
Last July, our ‘Pooling Reserves and Budget Centralisation in Multi-Academy Trusts’ report found that 18% of trusts surveyed pool all their GAG and a further 27% would like to. However, the Kreston Academies Benchmark Report 2020 published last month here noted that whilst “the level of interest is growing”, the “shift to GAG pooling has been a lot slower than some would have hoped”.
What we have seen in our ‘A Growing Philosophy: How are multi-academy trusts developing their operating models through centralisation?’ report is that for those trusts which have yet to embrace GAG pooling it often remains an option being explored by boards, as trusts consider their wider approaches to financial management.
