Multi-academy trusts are increasingly using new freedoms to pool their schools’ budgets into one central pot before dishing out funds to academies they think need the cash most.
A Schools Week investigation has uncovered that more trusts are using, or eyeing-up, this controversial budgeting method known as general annual grant (GAG) pooling.
It’s a major departure from the method used by most trusts, in which funding goes directly to schools first before the trust top-slices a percentage to fund its central operations.
Now, trusts are taking tighter control of schools’ purse strings, with funding going directly to the central team.
Trust leaders say pooling the cash means they can iron out funding inequalities by shifting money from richer schools into those that need it most.
However, heads are uneasy about the loss of autonomy over their budgets, with one source telling Schools Week they now have to beg the trust for funding.
Valentine Mulholland, head of policy at the National Association of Head Teachers, said heads in trusts that pool cash were concerned their school was being “prejudiced” in terms of “getting their fair share of funding”.
“It’s not very palatable as a head to know they are giving funding to a neighbouring school, particularly at a time of a funding crisis.”
Of 52 trusts that responded to freedom of information requests, five had some sort of pooling arrangement or were considering one.
E-ACT switched this year to pooling all general cash given to its schools, apart from student bursaries. It then redistributes the money based on “education priorities”.
The cash is handed out to schools based on a “zero-base budget”, which requires heads to justify all their planned expenditures.
E-ACT said the “comprehensive transformation” would “align budgeting closely with curriculum planning to address the education needs of each academy”.
The CfBT Schools Trust, which runs 16 schools, pools any budget surplus posted by its academies at the end of the year into a central pot.
This is then redistributed to support schools “in times of need”, with a proportion held back as a contingency for “unforeseen events”.
Plymouth Cast, which runs 35 schools, said it was also looking into pooling school budgets.
David Morris, chief executive of the Diocese of Coventry multi-academy trust, said it would also have to move to pooling because it was the “only way we can sustain small schools”.
If we want to create equity of funding based on pupil characteristics, then more room for flexibility puts that at risk
A study by think tank Reform last year, Academy Chains Unlocked, found 13 of 65 trusts surveyed (20 per cent) said they pooled their funding.
However, nearly a third that didn’t pool cash said they would like to. Many have held off because of resistance from heads and governors.
Ben Dobson, the author of the Reform report, said trust chief executives saw “many useful ends” from pooling funding – including moving cash to poorer schools and paying for building work.
But while many trusts had an overall surplus, the additional cash sat mostly at school level so the trusts did not “feel empowered to use this to improve other schools in the chain”.
“This seems to me inconsistent with the aim of creating a collaborative structure that helps to drive school improvement.”
The think tank called for funding for all academies to be handed straight to the central trust team.
Mulholland, however, said this would be a “step in the wrong direction” and against the new national funding formula, due to be introduced next year and designed to bring greater equality to the cash going directly into schools. “If we want to create equity of funding based on pupil characteristics, then more room for flexibility puts that at risk.”
Pooling also undermines the government pledge that no school will have their budget cut under the new funding plans as trust bosses will have the final say on how much any school gets.
Trusts have been allowed to pool funding since 2013 on the condition they first get government approval. However, rules state those trusts must give “individual consideration” to the funding needs of each constituent academy. An appeals mechanism must also be in place for heads that feel they have been unfairly treated. If this is not resolved by the trust, it can be escalated to the secretary of state who will make a final decision – and can overrule the trust.
The Department for Education said it had not been asked to intervene in a dispute in the 2016-17 financial year, but could not provide figures for earlier years.
A spokesperson added: “MATs have the freedom to amalgamate a proportion of GAG funding to meet the normal running costs at any of its constituent academies. However, in doing so they must give individual consideration to the funding needs and allocations of each constituent academy, and have an appeals mechanism in place should it be required.”