Thinking of Centralisation and a move to GAG Pooling? – get the “pre nup” right

27th November 2019

There are a number of reasons to consider a change in financial policy and a move to a collective approach to funding within a MAT, but whatever the rationale, the overwhelming conclusion is, there is absolute need to be clear from the start on the why, the how and the when. There are occasional reports of Multi Academy Trusts (MATs) in the news where centralisation and GAG Pooling has gone wrong, trusts are disbanded and schools are left with previous reserves used within the Trust.

Within the continuous drive for school improvement, financial efficiency and greater transparency comes organisational strength and control. 

A MAT taking in a failing school into the family may need to make strong budgetary decisions and pull support from across the trust on a number of angles, with financial freedom to make those decisions with full knowledge of the wider trust capacity and needs.  Efficient financial governance can facilitate swift support and deployment of resources for rapid improvement, yet comes against a potential loss of autonomy at school level.
Equally, a good or outstanding school may be choosing to join a MAT and benefit from the collective opportunities and resources, adding its own expertise to the organisation it joins and could welcome the opportunity to focus on school improvement without the burden of the central service obligations.

When considering the change from “top slice” to centralisation and ultimately GAG pooling there is much for MATs and individual academies to consider. With increasing numbers of MATs considering a move to full GAG Pooling it is important to highlight the benefits of a formal protocol and policy, a transparent journey and the appropriate consultation.

The practical journey begins with the centralisation to one central bank account and central budgetary processes. Pooling the in-year GAG income comes next and finally the consideration of pooling reserves, whole or in part.

The best way to approach any significant change to financial management is to consider all the angles of entry and exit within a robust and thorough policy. This is no easy task and is an exercise that will incur professional fees that need to be planned for.
The benefit of such a policy is rarely felt in the normal course of “business as usual”, however in the event of transfer into or out of a MAT, will be invaluable.
The equivalent of an education “pre nup” serves to offer protection, transparency and prior mutual agreement to all financial considerations.

If you are considering the move towards centralisation or wish to explore the idea of GAG Pooling, contact our education team.
 

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