GAG pooling - time for the one Trust approach

News of pay increases after budgets have been approved by Trust Boards means that this summer is likely to one where budgets are completely re-drawn by Academy Trusts who look to balance the books.

Whilst some savings will be possible by reviewing suppliers, reducing curriculum budgets or delaying certain works not many will be achieved. One that perhaps can be achieved is looking to make your central trust offering and function more efficient and streamline.

GAG pooling is often spoken as one of these solutions. If you “google” the definition you will be met with the following: “GAG pooling can help Trusts to allocate resources based upon need or to deliver Trust priorities”. Not very exciting but you can see why many believe it to be a potential solution to budget pressures.

However, most of the sector continues to adopt the “top-slice” approach. But the biggest flaw with this approach is that many Trusts have not actually costed out what their central function offering is worth to member schools. Those with central Trust functions in deficit in their accounts are proof of that.

The central Trust function should be your big “sell” to entice schools to join your Trust. Not forgetting your culture of course. But what exactly will schools receive for their “top-slice”? Will it represent value for money? Therein lies an element of the problem. Some schools will receive an awful lot of support for their say, 5% charge, but some schools won’t.

Once costed, many Trusts will find they need to charge member schools way in excess of the popular 5% rate to break-even. Will that encourage schools to join Trust A when Trust B down the road offers similar at a lower rate? Probably not.

And let’s not get started on adding in recharges for other “extras” not previously budgeted for! A significant administrative burden and nightmare for the finance team.

This is why the “top-slice” is holding the development of the sector back. Time and money are wasted in being fixated on what is effectively an arbitrary rule.

This brings us back to GAG pooling. There are many arguments against it – mainly around culture – but these should always play second fiddle to the organisational benefit. Trusts can achieve far more for their schools when they act as one. 

You can help level the playing field across your schools, not literally, but you can bring more equality throughout. You can also share risk which is key when estates or ICT services need differing levels of investment across the Trust.

Adopting GAG pooling can be done via plenty of methods. With little ESFA guidance out there (still…I continue to poke their ribs over this) many Trusts are developing their own method of approach. 

There are even some Trusts who set school budgets without balancing them, effectively achieving the objectives that GAG pooling sets out to achieve but without adopting the GAG pooling policy. So are they in affect, GAG pooling without officially GAG pooling?

In summary, does any of this matter? You are one entity. If the money improves educational outcomes and your Trust balances overall – does it matter what your policy is?

If you want to discuss further how you can improve your Trust’s central offering or know how to introduce GAG pooling, then please get in touch by booking a discovery call today.

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