Trusts that “GAG pool” their schools’ funding to pay for central services should be more transparent, leaders have said, after it emerged one was taking around 20 per cent from some of its academies.
Latest accounts for the University of Brighton Academies Trust suggest just over 13 per cent of pooled school income is retained to pay for services such as attendance support and estates teams.
However, Schools Week understands that one of its schools is effectively having around 20 per cent of its cash retained centrally, while for another it’s 17 per cent.
Trusts have two methods to fund central services. Most top slice a percentage from their schools’ budgets.
But, a growing number are now instead pooling all their schools’ general annual grant (GAG) funding first, before deciding how much cash should be allocated to schools based on their own formula.
Unlike top-slicing, there is much less transparency about how much GAG pooling trusts are taking from their schools.
‘It overrides the funding formula’
A member of staff at the Brighton MAT – who asked to remain anonymous – branded the arrangement unfair, with some schools left “understaffed and struggling”.
“It overrides the [Department for Education’s] funding formula. Schools within the trust are having significant amounts of income retained centrally… and being forced to make constant cuts year after year whilst central teams get bigger.”
The case highlights how sensitive the issue of funding in MATs can be. Earlier this month, an academy head resigned publicly over “significant concerns” about the “high amount” his trust was top-slicing from his school’s budget.
Large trusts, on average, top slice 5.4 per cent. Some now take 10 per cent – but say this is because they provide more services centrally, and it actually means their schools save money.
A spokesperson for the Brighton trust said its model has “ensured resource allocation and economies of scale, contributing to overall operational efficiency as well as consistency of quality standards”.
‘Opacity’ makes accountability tough
Supporters of GAG pooling argue that it allows trusts to redistribute cash where it is most needed.
But the EDSK think tank called for a ban. A January report said its “opacity” makes it impossible to hold leaders “accountable for the way in which they spend public money”.
Schools Week analysis suggests that eight of England’s 50 largest MATs also GAG pool. Just one of them appeared to have published breakdowns of central team allocations in their accounts.
The Enquire Learning Trust was the only one that provided a cost breakdown of its GAG pooling arrangements in annual accounts.
It stated funds were allocated to academies “based on a standard age-weighted pupil unit rate”.
About 4.5 per cent of the allocations were retained by the trust to pay for HR and payroll and financial services, among other things.
The seven other MATs did not respond when asked by Schools Week if they would provide details of how their GAG pooling worked.
‘You need to be transparent about it’
Former NEU general secretary Mary Bousted said trusts should ensure information is published in accounts or public documents.
“There may be good reasons why trusts redistribute money [the way do] – but you need to be transparent about it. It’s even more important [at a time] when schools are having such funding difficulties.”
A survey of more than 150 MATs by IMP Software finance advisers found about 20 per cent pool their GAG. But a further 38 per cent wanted to start doing it.
Co-founder Will Jordan, of IMP Software, said there isn’t information on the average level of income retained by those trusts.
“What is spent within the centre, and what is sent to the school varies with every single trust.
“I’m not saying there aren’t things that can’t be changed, but where do you draw the line? Because transparency ultimately creates additional work.”
A University of Brighton Academies Trust spokesperson added the chain has GAG pooled since 2018, with budgets developed “by principals in collaboration with our school improvement, people, and finance teams”.
This allows it to “manage the allocation of resources according to the needs of individual academies and to invest in comprehensive school improvement and safeguarding”.
“The trust has a centralised operating model meaning that a substantial proportion of direct costs are consolidated centrally rather than distributed across individual academies.”
