School finance – has your MAT considered GAG pooling?

Mat Smith, chartered certified accountant and solutions architect at PS Financials, part of the IRIS Software Group, puts a spotlight on improving school finance through General Annual Grant (GAG) pooling.

Lord Agnew, the under-secretary of state for the school system, suggested that GAG pooling – where a multi-academy trust (MAT) collects general annual grant funding centrally and allocates budgets to individual schools – is an effective way to improve best practice. Research has shown that more centralised trusts perform better financially too.

However, only five per cent of MATs are considering taking this route, according to one survey.

So, what three areas should MATs explore when considering GAG pooling? GAG pooling - Mat Smith on improving school finance

1. Champion achievement for all

One advantage of GAG pooling is the opportunity for MATs to even out the funding schools receive in different postcodes, which enables more targeted financial support for weaker schools. If managed well, this can raise standards across the group.

What’s needed is a culture where MAT schools are encouraged to champion the achievement of all children in the group. A commitment to communication and transparency about how funding is allocated, and why, would be essential too. This would ensure headteachers’ agree allocated school budgets, which would then enable them to make collective informed decisions about where investment will bring the greatest improvement to the group as a whole.

2. Small changes in school finance management

More centralised trusts have shown to perform better financially, but going for all or nothing can be a big step for trusts to take. One option is to centrally manage specific functions on a group-wide basis as a starting point. This would bring economies of scale to areas such as maintenance and utilities and reduce high administration or premises charges. Local purchases and more specific resources could then be managed through a school’s own individual bank account to coincide with the leadership team’s control. 

3. Focus on developing your teachers

Another way for MATs to take a step towards GAG pooling is with their greatest assets – their teachers. Some trusts employ newly qualified teachers (NQTs) who are given the opportunity to provide cover and support where it is needed across the group. This approach can help to cut high agency costs, provide students with a familiar face during teacher absence and enables NQTs to gain teaching experience beyond a single school, supporting their professional development.

A successful move to GAG pooling requires vital synergy in the values, cultural fit and ethos of a trust and its schools. There can be strength in numbers and by getting centralisation right, trusts can ensure better resources are available to more schools, benefitting more children.    

For more information on school finance management solutions for MATs visit PS Financials.

 

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