MAT financing is becoming a bigger issue after several scandals revealed that trusts were taking large amounts of cash from their academies while seeking to cut staff.
The problem is that there is a lack of transparency in the way that MAT finances operate – it is difficult to find out how much a MAT might be taking from each of its schools, and how funding is being allocated within the trust.
How does funding work in MATs?
The key thing to understand is that the board of the MAT (i.e. its trustees) – have ultimate power to decide the way in which funding is retained for central services and distributed to each of its academies. Schools, staff and communities do not have any say in these decisions or a right to be consulted.
There are two ways that MATs organise their finances:
1. Top slicing
In most cases, MATs take a ‘top slice’ percentage from their schools’ budgets to pay for central services. The MAT’s central team, functions and services may provide HR, IT, legal services etc.
A normal level of top slice for a large trust would be about 5.4%, but the general trend in MATs is that the top slice is increasing, and some now charge 10% or more.
MATs have to provide a figure for how much they top slice in their annual accounts, although this does not have to be a precise percentage for each school. They also have to say what this was used for, but again, this is just in terms of the broad areas for which funding was used.
MATs can also change the rate of the top slice from year to year – there is no requirement to consult with schools or staff about this.
2. GAG pooling
A growing number of MATs no longer take a top slice from their academies, but instead pool all their schools’ general annual grant (GAG) funding. The grant is then used to fund central services and is distributed based on the trust’s own views of the needs of each school.
This is often justified on grounds of efficiency. It can also allow MATs to provide differing levels of funding to their schools. For example, MATs have been known to transfer funding from one academy to support another one with falling roles.
With GAG pooling there is much less transparency about how much trusts are taking from their schools - there is no requirement to publish the amount each school in the MAT receives, or how much is used to fund the MAT’s central services.
How does this differ from local authority schools and why does it matter?
The MAT system of finances is very different from the one that local authorities (LAs) operate with their schools.
LAs also use school funding to pay for some services. However, maintained schools are involved in deciding what proportion of their funding goes to the LA. This is done via the local Schools’ Forum, a democratically constituted body in which each maintained school can vote on funding decisions.
The Schools’ Forum also publishes minutes of its meetings, where decisions taken are recorded publicly.
Why should I care about how my MAT funds its schools?
In some cases, the amounts of money MATs take from their schools have been hidden from staff and communities, while cuts were being imposed. For example, in 2021, NEU members took action at Tendering Community College, part of the Academies Enterprise Trust (AET), over a restructure and cuts to the school’s budget that were being imposed by the trust due to the large amount it was taking from its funding allocation – equivalent to £1,260 per pupil.
The NEU thinks there needs to be a lot more transparency in MAT finances, so that individual academies know how much is being taken by the MAT, how money is being spent and to ensure this is being done equitably so that schools get what they need.
One way to ensure that MATs are held accountable on finances is through effective union pressure and scrutiny.
How can I find out about how funding works in my MAT?
MATs are legally required to publish their annual accounts, often referred to as ‘financial statements’, on their website. It is usually possible to find these via a web search, or a search on the trust’s website.
The accounts will say whether the school operated a top slicing system or GAG pooling in the previous financial year. This information is usually published under a section headed ‘central services’, where the trust will set out what services it provided to its schools, and how it charged for these services.
If your MAT top slices, you can look back at previous financial statements to see if the amounts have been increasing.
If the information in the statements does not seem to tally with what you know about the funding situation in the MAT, this could be a way to put pressure on your MAT to be more open about its finances.
If your MAT is GAG pooling and you are worried about how much is being kept for the central MAT team or the allocation to each school, you can ask them to provide a detailed breakdown of amounts spent and the reasons for decisions.
MATs are often resistant to being open about their finances, but staff and parents deserve to know how their schools are being funded. Controversial decisions should be challenged when a MAT is not being forthcoming.
Reluctance to be open about finances could itself be an important motivating factor in any campaign within a MAT.
