The Pros and Cons of GAG Pooling

In academy finance, GAG pooling is now an important topic of discussion for multi-academy trusts (MATs). Pooling was once seen as a niche or controversial practice. Now, it is a key way strong trusts manage their resources and plan for growth.

The Evolving Definition of GAG Pooling

In 2025, the Academy Trust Handbook (ATH) defined GAG pooling as the process to "allocate to meet improvement priorities across the trust." This marked a notable shift from its 2022 definition, which simply described pooling as a way to "form one central fund for running costs."

That change in wording signals a deeper cultural shift. Pooling is no longer seen just as a technical finance system, but as a strategic tool to drive improvement across schools. This shows a shift from managing budgets on a school-by-school basis to working as one to see how to achieve the best outcomes for all pupils within a trust.

Who is pooling?

GAG pooling is no longer an afterthought. Research from Schools Week in 2024 found that 43.6% of large MATs, 42.4% of medium MATs, and 26.5% of small MATs were pooling their GAG or reserves. This shows a large increase from 2022, when only about 30% of large and medium trusts and 15.9% of small trusts did this.

The data suggests that pooling is becoming more common, particularly among larger and more established MATs that have already developed the systems and cultural alignment needed to make it work effectively.

In recent years, discussions about GAG pooling have become more important. They are now a central part of the finance strategy for multi-academy trusts (MATs). People now see it as part of what makes a "strong trust." A strong trust thinks strategically and works as one organisation, not just a group of separate schools.

What are the alternatives to pooling?

Not every trust is ready to pool its GAG funding, and several alternative funding models continue to be used across the sector. These include:

• Recharging costs: Each cost is charged back to individual schools as it accrues. This allows for autonomy but can be highly administrative.
• Top-slice model: A set percentage of funding is retained centrally to cover shared services.
• Partial pooling: Centralisation of specific cost centres (e.g. estates or IT).
• Hybrid pooling: Often used for reserves only, where schools can bid to access central pooled funds. Many trusts start here before moving to full pooling.
• Full pooling: All GAG funding is aggregated and allocated trust-wide, enabling complete flexibility and equity – but requiring deep cultural alignment.

Most non-pooling trusts operate a top-slice or hybrid model, offering a balance between autonomy and shared benefit for their school budgets. These models often act as a stepping stone towards full pooling, which aggregates all GAG funding and allows allocation based on trust-wide priorities.

The benefits of GAG pooling

When done well, GAG pooling can bring both financial and cultural transformation. It protects financially weaker schools and ensures that every pupil benefits equally from the trust's collective resources. Operationally, pooling can deliver greater efficiency through economies of scale, enabling trusts to make long-term investments in staff development, estates, and curriculum.

Pooling also increases transparency and accountability by aligning financial decisions with the trust's strategic priorities. Perhaps most importantly, it strengthens the sense of shared identity across schools. Leaders can focus more on improving education rather than on "survival budgeting," and a genuine "one trust" culture can begin to take root.

When Pooling Works Best

Pooling works best where there is a shared sense of purpose and a strong "trust-first" culture. When all schools understand and believe in the trust's collective vision, financial decisions are seen as part of a bigger picture rather than a zero-sum game.

It also tends to be more successful in trusts with a shared context. For instance, those operating in similar localities or phases. In mixed or geographically diverse trusts, differences in need and expectation can make perceptions of fairness harder to manage.

Above all, effective governance is vital. Boards need to understand the rationale, the risks, and the implications of pooling so that when challenges arise, they can respond confidently and consistently.

When Pooling Might Not Work

Pooling may not suit every trust. Early-stage MATs that are still forming their identity often need time to build alignment before taking this step. Similarly, trusts with a history of strong school autonomy may struggle with the cultural shift pooling requires. Mixed-phase trusts that include both mainstream and special schools may also find it harder to develop a single model that fits all contexts.

Trusts whose growth strategies depend on voluntary joiners should also proceed with care, ensuring that potential partners understand how the system works and why it benefits the wider trust.

Pooling isn't without its challenges, and for some trusts, the perceived risks still outweigh the benefits.

• Loss of autonomy: Schools may feel they no longer have control over "their" budgets, or fear that hard-earned surpluses could be redistributed.
• Fairness questions: Particularly around how reserves are redistributed.
• Recruitment challenges: Converter schools may resist joining a pooled trust if they fear losing surpluses. Potential new joiners may see pooling as "the trust taking our money," particularly if communication is not handled carefully.
• Benchmarking difficulties: Comparisons between schools become more complex.

Clear governance structures and transparent decision-making processes are essential to mitigate these concerns.

Practical Next Steps

For trusts considering pooling, the process should be phased, transparent, and collaborative.

1. Clarify purpose and policy. Define why pooling supports your trust strategy.
2. Consult openly. Engage headteachers, business managers, and governors early.
3. Pilot or phase in. Start with reserves or specific cost centres before full pooling.
4. Align systems. Ensure finance processes and reporting structures are consistent.
5. Embed ICFP and fairness metrics. Data and evidence underpin trust.
6. Review and adapt regularly. Pooling should evolve with the trust.
   
   

A phased or pilot approach can help build confidence, particularly when starting with reserves or specific cost areas. Aligning finance systems and reporting structures early will make implementation smoother, while embedding fairness metrics and ICFP principles ensures decisions remain evidence-based. Finally, regular review and adaptation keep the system responsive as the trust evolves.

Final thoughts

At Keystone Knowledge, we've seen how GAG pooling can be both transformative and challenging. It isn't a "silver bullet", and it's not right for every trust. But when it's planned carefully, communicated clearly, and aligned with culture and strategy, pooling can unlock enormous potential – financially, operationally, and educationally.

As Benjamin Franklin famously said, "By failing to prepare, you are preparing to fail." Success with pooling is all about preparation: building governance confidence, engaging stakeholders, and ensuring fairness is at the heart of every decision.

Whether you're exploring pooling for the first time or refining an existing model, Keystone Knowledge is here to help. Our team supports trusts with financial planning, governance development, and strategic change management, helping you make the right decisions for your schools and your pupils. Contact us to find out how we can help.