DfE considers drawing up GAG pooling guidance

The Department for Education is considering drawing up GAG pooling guidance following controversies over the amounts trusts take from school budgets.

The move would give leaders “more support” over how to handle academy cash, said Lindsey Henning, director of schools financial support and oversight at the Education and Skills Funding Agency.

Most MATs top-slice their schools’ general annual grant (GAG) cash to pay for central services.

However, growing numbers are opting to pool the money, a method that offers much less transparency, but allows them to distribute funding more evenly across their academies.

Accounting expert Will Jordan, of IMP Software, said trusts are “currently having to navigate their thinking around this without any real direction” from government.

“[Guidance] would give clarity to the sector… and help demystify this area that many leaders, both trust and school, are grappling with,” he said.

‘Preventing financial difficulties’

Henning, who was speaking at the Schools and Academies Show, said government is “looking at” drawing up GAG pooling guidance “this year” to “give more support [and] informed decision making”.

She explained it is part of the ESFA’s focus on “preventing [financial] difficulties from happening”. Similar guidance was published on trust reserves.

A survey suggests a fifth of trusts GAG pool, but another 30 per cent want to do it. But it is controversial.

Unions publicly challenged plans for REAch2, England’s largest primary-only MAT, to GAG pool last year, alongside a centralisation plan that involved job losses.

Staff at the Hastings Academy, in East Sussex, are preparing to ballot for strike action over the University of Brighton Academies Trust’s “excessive” pooling arrangements.

Just over 13 per cent of pooled school income is retained to pay for services such as attendance support and estates teams at the trust. One school is having 20 per cent of its cash retained centrally.

Phil Reynolds, of PLR Advisory, said another problem lies when such schools are re-brokered – with leaders unsure how much funding a GAG-pooled school should leave with.