Academies

Biggest primary trust plans to take control of its schools’ funding

REAch2 said GAG pooling would allow 'strategic' decisions and 'solidarity', but unions fear dozens of job cuts and want more consultation

REAch2 said GAG pooling would allow 'strategic' decisions and 'solidarity', but unions fear dozens of job cuts and want more consultation

England’s largest primary-only multi-academy trust REAch2 plans to centralise control over all of its 60 schools’ regular funding and reserves.

The second largest trust in the country is launching a consultation on moving to so-called general annual grant (GAG) pooling, as well as pooling individual schools’ reserves.

It will also centralise finance and HR services, with a restructure expected to deliver “around £2.5 million of investment…in frontline activities”. But Schools Week has learned unions fear up to 57 roles are at risk.

Currently REAch2 schools receive funding allocated to them according to the government’s national funding formula, or local authority funding policies where those differ from the NFF.

The trust takes a 6.5 per cent top-slice of GAG funding to cover central services, including support with accountancy, HR, governance, estates, policy, performance and risk management and leadership development.

Its policy has also been to hold reserves worth 7 per cent of GAG income.

The trust said the shift to pooling all funding instead would mean REAch2 can “look at what each school needs to deliver a great education in the most efficient and effective way”.

Pooling reserves will also allow “more strategic” planning, the trust said, both through trust-wide initiatives and responses to unforeseen costs such as energy price hikes. GAG pooling would begin in September 2024, but reserves pooling from this September.

While schools would still be funded under the same formula, cash would sit with the academy trust instead – which can then dish it out based on its own measures.

GAG pooling ‘sensitive’

GAG pooling has been dubbed a welcome form of “redistribution of wealth” by former Labour minister and E-ACT chair Lord Jim Knight in a parliamentary debate last year.

Former academies minister Lord Agnew said it was one of “the greatest freedoms” for MATs.

The recent Kreston academies benchmark report found 23 per cent of MATs included in the survey were using GAG pooling, up from 14 per cent the previous year.

But it remains controversial, with another peer arguing it undermined goverment efforts to equalise funding via the NFF. The Kreston report’s authors have previously noted the “perception that in the short term some schools will gain and others will lose out”.

Cathie Paine, chief executive of REAch2, said: “Our fundamental aim is to achieve equity for every single child in our trust.

“And whilst we are incredibly proud of the work that our schools do, the reality is that the current model has a number of inequities.”

Gavin Robert, chair of the trust, said the organisation was “based on solidarity”, adding: “By leveraging the full power of our trust, we can accomplish so much more.”

Central budget gap

Schools Week analysis suggests REAch2’s move will also help plug a budget gap in the trust’s central team funding.

Accounts show REAch2 schools received a combined £87.3 million in GAG funding for everyday operations in 2021-22, and had combined reserves of £7.1 million.

DfE data indicates the overall reserves position masks a significant divide between the health of school-level and trust-level balance sheets, however.

School-level data for 2021-22 was not immediately available, but in 2020-21 individual schools had £14.6 million in reserves – whereas the trust’s central team recorded a £5.8 million deficit.

Schools’ budgets varied significantly too, from an £899,000 surplus to a £595,000 deficit – with seven schools in deficit in 2020-21.

A REAch2 spokesperson said it had been building central capacity in recent years to move to a cluster model, support new schools and offer specialist help on compliance to reduce school-level workloads. Such changes let schools “focus even more time on teaching and learning”.

Restructure planned to save £2.5m

REAch2 also said its new financial model would be “accompanied by a move to a shared services model for operations” from January 2024, covering finance and HR roles. A consultation has begun.

A spokesperson added that detailed plans are set to be agreed with school leaders, but the move would free up funding for initiatives like trust-wide educational psychologists, speech and language therapists and counsellors.

The average school finance manager nationally earns £36,500 a year, according to Talent.com, or £41,993 including pension costs. Savings of £2.5 million would equate to cutting around 60 staff on such pay.

A document sent to members by multiple staff unions claimed up to 57 of more than 200 office roles across the trust – such as school business managers, finance and other administrative staff – risked being cut.

It also voiced fears cuts could push up workloads, and called on the trust to halt the “imposition” of plans drawn up “behind closed doors”. Taking control of schools’ funding is a “huge move and needs proper consideration”.

Mike Short, Unison’s head of education, called office staff “essential” and cutbacks “unacceptable”.

“The trust should halt these ill-advised plans and consult staff, governors and parents properly before any further damage is done.”

One union source said they hoped “meaningful consultation” to find alternative solutions could minimise job losses, but the dispute could escalate if REAch2 “don’t listen”.

A REAch2 spokesperson said the trust had “rolled out a comprehensive programme of engagement with our staff and wider audiences”.

Centralising important support roles would “free up schools’ time, not add to their workload”, and allow more investment in frontline activity.

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6 Comments

    • Totally agree with Seb, what have you done. If this was deemed the right way forward it should have been a staggered approach over the course of a few years, not done and dusted in months. Smacks of bad management centrally and schools being dumped on/scapegoats. Not a good move Reach2, not good for morale, not good for your reputation – thought you cared.

      • As a member the admin team in one of the Reach2 Academies I can only say I am still in shock. I do understand that we don’t know what goes on at trust level, but in the same way they clearly do not get what is happening at school level, if they did this proposal simply would not be happening. It is very short-sighted if they see this can work. Please Reach2 take your proposal off the table.

    • Oh deary dear – when things come to light.

      REAch2 restructure and centralisation of finances – Update from unions 28 March

      Following a meeting with REAch2 on Monday to discuss the restructure and centralisation of finances the unions have written to the trust calling on them to agree to halt the proposal and timeline. See letter below for full details.

      ‘Good morning
      Firstly, thank you and other REAch2 staff for your time yesterday. I am writing on behalf of the JCNC unions following our meeting.
      It is our joint position that the trust’s proposal and timeline is not fit for purpose and not achievable in the timescales set, due to the huge changes proposed to the school finances and school-based job cuts. Our specific (though not exclusive) concerns are as follows:

      Financial concerns
      There is a lack of detail and transparency about how much money schools will get and how this will be determined once their reserves are pooled in September 2023 and their GAG funding is pooled in September 2024. The trust confirmed at our meeting yesterday that the ‘central team’ £7.5m accumulated debt will be off set against reserves and any in year deficit (currently c£1million) will come from pooled funding prior to allocation to schools. This raises serious questions and is causing
      enormous anxiety about the impact on individual school budgets and job security. The trust has not provided the projected costs for central teams/clusters under the proposed model.

      Impact of staff cuts
      Staff in schools are telling us that the trust’s plan to impose cuts of up to 26% to front line office staff across all schools are unworkable and will have a serious detrimental impact on the running of schools, pupils and the workload of the wider workforce. Under the plans, up to 57 out of 216 office roles across the trust; such as school business managers, finance officers and other office staff could be cut. The roles at risk are all front-line jobs that do a wide variety of tasks in school (above and beyond their job descriptions in many cases) including contacting parents, supporting the head, admin for school trips, supporting workload of teachers etc. This means that many of these in school
      tasks will fall onto already overworked heads, teachers and support staff; or will be left undone potentially putting pupils at severe detriment.
      For these reasons we are again calling on the trust to immediately halt the restructure; to allow for more time for a reasonable level of negotiation and consultation with the unions and local schools. We propose that we use this period constructively to carry out a comprehensive review of the proposals and their potential impact on pupils and the wider workforce. For the avoidance of doubt, during these discussions we would also be tabling proposals around job security, voluntary redundancy payments and pay protection for any affected staff so that together we can support staff in REAch2.

      Given the urgency of the situation please confirm by midday of Wednesday 29th March the trust’s response to our constructive and reasonable proposal.’

      • So almost a year since this decision was shared. Has anyone bothered to look into the how this is going, the saving of money from restructuring admin staff, but creating new central role positions, and extortionate ‘away days’, clearly a way to spend the money they say they need to save. More taking money from schools, with a promise, its there if you need it – watch this space. Need someone to do a FOI request/survey on how all the schools are doing, and that is not just financially it is staff morale etc – but guess this data would be manipulated or controlled.

        Bills not being paid on time and yet more directions for schools to use certain contractors even though it is not best value.

        I hope the top dogs can sleep at night.

        • I got out of there, couldn’t even consider remaining in such an uncaring Trust. However, I am interested to see how things work out. I, personally feel, I gave my all and some, and actually thought I was appreciated. I am in close touch with a staff member that remained and from the conversations we have, all is not good. The ‘all singing, dancing, newly created central team are so far behind with their work but I guess that is okay……
          Good luck everyone, those that have remained, stay strong, those that made this decision, I have nothing to say.