Only a tiny fraction of multi-academy trusts are planning to pool their schools’ funding centrally despite ministerial urgings, according to a new report.

A major new survey reveals that just 5 per cent of MATs are planning to centralise their general annual grant funding  - a process known as “GAG pooling”.

Under this approach, the trust collects the money earmarked for each school centrally and then shares it out between them, rather than top-slicing school budgets to manage the costs of the trust.

Today’s Kreston Academies Benchmark report says the approach has been supported by the Department for Education but remains unpopular with trusts.

It says: “From a pure logistical perspective, it makes a lot of sense for the MAT to receive the funding which it can then allocate in the way that it considers will be the most effective to all of the pupils within the trust, and so would be based upon need.

“[Academies Minister] Lord Agnew supports this approach and highlighted in his letter to academy auditors that MATs are single financial entities and GAG pooling would simplify the provision of support to weaker schools in a MAT.”

Managing academies’ funding

However, the report says “this requires a significant shift from local governing bodies thinking about the pupils in their school to thinking about all of the pupils in the trust”.

It adds that it has proven very difficult for trusts to attract new schools to join them when they plan to remove all of their budgetary control.

A survey of MATs shows that just 5 per cent were considering GAG pooling.

“Internal political challenges” were cited as the reason not to do so by 46 per cent, with trustees or local governing boards not wanting to give up control of their school finances.

Another 22 per cent said their financial position prevented them from doing it, and 14 per cent said that it was too difficult to implement.

Before it was wound up, the troubled Wakefield City Academies Trust sparked controversy after it moved its school surpluses into a central trust account.

Wakefield Council referred the matter to West Yorkshire Police but no charges resulted from this.

And it has since emerged that WCAT was actually advised to centralise its funds by the DfE.

The Kreston Academies report, published today, also highlights a change in the way MATs are run, with some operating on a far more commercial basis.

The report says: “While this may feel uncomfortable, it is a necessity if more efficiencies are to be found. To enable financial governance to continue to improve, it is essential that MATs become more centralised.”

The report says it expects GAG pooling to increase over time as part of this change.

The DfE has been approached for a comment.