As funding increases remain below inflation, coupled with rising costs for staff and estate management, there is a growing interest in the sector to move from the traditional top slicing model to a GAG pooling model.
Transitioning to a GAG pooling model requires a shift in mindset. Academy leaders must recognise that the Trust is the legal entity responsible for all funds. Successful implementation depends on transparency, open communication, and a commitment to fair fund distribution across the Multi-Academy Trust (MAT).
By embracing innovative fund management strategies, MATs can better address the financial challenges they face, ensuring that all students benefit from the collective strength and resources of their Trust.
What is GAG pooling?
GAG pooling is a fund management strategy that provides an alternative to top-slicing. It enables a Trust to offer more financial support to financially weaker constituent academies, ensuring a more equitable distribution of GAG funding.
This model hinges on the principle that academy leaders prioritise the well-being of students across the entire MAT, rather than focusing solely on their individual schools.
The benefits of GAG pooling
The principles of GAG pooling foster collaboration within MATs and offer several key benefits:
Unified community
Promotes a shared belief of 'all in this together,' strengthening the sense of community within the Trust.
Strategic resource allocation
Encourages a needs-led approach to resourcing, ensuring that the interests of all students are considered.
Flexibility
Allows for a more agile response to specific needs within individual academies, compared to the rigidity of top slicing.
Confidence and collaboration
Builds trust among constituent academies, reassuring them that they will receive support when needed.
Focus on education
Frees academy leaders from budget concerns, allowing them to concentrate on educational improvements.
Why haven't more trusts adopted GAG pooling?
Despite its advantages, GAG pooling has not been widely adopted due to instances of mismanagement, which have led to negative perceptions. Many leaders fear that GAG pooling might be perceived as the MAT taking control of their funds, requiring a significant cultural shift to overcome these concerns.
Approaches to GAG pooling
Currently, the Academy Trust Handbook provides limited guidance on GAG pooling, primarily requiring an appeals mechanism and prohibiting the pooling of PFI funding.
Trusts that have implemented GAG pooling have done so in various ways, some even extending beyond GAG pooling to include other funding sources.
Types of pooling models
Different MATs have adopted various pooling strategies, including:
Needs-based
Allocates resources based on individual school staffing needs and estate conditions.
Bottom slice
Central management of all funding, with education budgets allocated to individual academies.
Top slice
Maintains individual budgets but pools significant funds for central services and reserves.
Fund pooling
Centralises all reserves for planned projects and contingencies, including additional income streams beyond GAG.
The next step
If your Trust is considering a move away from the top slice model, exploring GAG pooling, or seeking an external review of existing pooling policies, we are here to help. Please contact Luke Grubb at l.grubb@uhy-uk.com, or reach out to your usual UHY adviser, to discuss how we can support your Trust in navigating these changes.
Visit our academy sector page for more information on how we can help you prosper.
