A trust with multiple academies can amalgamate the general annual grant (GAG) for its academies to form one central fund. This practice can enhance a trust’s ability to allocate resources in line with improvement priorities and running costs across the trust’s constituent academies.
If a trust decides to pool GAG, it must consider the funding needs and allocations of each constituent academy. The trust must have an appeals mechanism and an appeal can be escalated to the ESFA, if not resolved. The ESFA’s decision will be final and can result in the pooling provisions being dis-applied. A trust must not pool PFI funding, in accordance with its funding agreement.
On 20 March 2024 the Department for Education (DfE) announced that it was giving trusts an option to add a clause to their master funding agreement. This will put the right to pool GAG funding on a contractual footing. Trusts can choose to adopt this clause without moving to the latest version of the model, Master Funding Agreement.
The permission to pool GAG funding is currently granted through the Academy Trust Handbook. This change enables trusts to include it in their existing Master Funding Agreement, bringing GAG pooling into line with the other ‘academy freedoms’.
There is no requirement for trusts to adopt this clause and trusts remain free to decide which financial operating model they use.
Trusts who wish to take up this option can do so by arranging a Deed of Variation to their existing Master Funding Agreement by contacting the DfE through their usual channels.
The next steps
If you undertake GAG Pooling or are considering GAG Pooling in the future, please contact Malcolm Winston on m.winston@uhy-uk.com, or your usual UHY adviser, to discuss how we can support you with this process. Alternatively, you can reach out to us using the button below.
