Top Slice vs GAG Pooling: Which Budgeting Model is Right for Your MAT?
Which Budgeting Model is Right for Your MAT?
Multi-Academy Trusts (MATs) face unique financial challenges that require efficient budgeting and financial planning. Two common financial models used within MATs are Top Slice and GAG Pooling. Understanding the pros and cons of each model can help MAT leaders make informed decisions about their financial strategy. With SBS Financial Planner, managing both models has never been easier, thanks to its automated and customisable features.
What is Top Slicing?
Top slicing refers to a model where the central MAT takes a percentage (the "top slice") of the General Annual Grant (GAG) from each academy’s funding to pay for services provided centrally, such as HR, finance, or IT.
Pros:
- Central control: Ensures the MAT can provide consistent services across all academies.
- Economies of scale: Can reduce costs by centralising procurement and services.
- Simple to manage: Fixed percentages make budgeting predictable.
Cons:
- Lack of flexibility: Individual academies may feel they don’t have enough control over their budget.
- Perceived unfairness: Academies that are financially stable or require fewer central services may feel penalised by contributing the same percentage as others.
What is GAG Pooling?
GAG Pooling is a more integrated model where the entire GAG funding across the MAT is combined into a central pot, which is then redistributed based on the needs of each academy, rather than a fixed percentage.
Pros:
- Needs-based funding: Allows redistribution of funds to academies that need it most, ensuring equity.
- Flexibility: Tailored allocations based on specific needs, providing greater support where required.
- Improved resource allocation: MATs can make strategic decisions about funding to improve performance across the trust.
Cons:
- Complexity: Managing and allocating the pooled funds can be time-consuming and require detailed oversight.
- Perceived lack of autonomy: Academies may feel less control over their individual budgets.
- Potential for disagreement: Disparities in funding distribution may lead to tension among academies within the trust.
Turning Cons into Opportunities
Every challenge presents an opportunity for growth. While each model has its potential cons, these can also serve as opportunities for improvement in your MAT’s financial strategy:
- Top Slice: While academies may perceive a lack of autonomy, this can spark meaningful conversations around the value of shared services and help academies see the benefits of contributing to a centralised pot that funds essential resources they may not otherwise afford individually.
- GAG Pooling: Though managing a pooled budget can be complex, it encourages MAT leaders to refine their processes and improve their financial oversight, fostering a culture of shared responsibility and collaboration across the trust.
How SBS Financial Planner Can Help You Decide
SBS Financial Planner's Scenario Planning feature allows you to simulate both models, giving you a clearer understanding of which financial model will work best for your MAT. You can forecast the financial impact of each model and make a data-driven decision, ensuring you choose the model that aligns with your MAT’s goals and values.
SBS Financial Planner Supports Both Models
SBS Financial Planner has been designed with the unique needs of MATs in mind. Whether you choose to implement Top Slice or GAG Pooling, SBS Financial Planner offers the tools and flexibility needed to manage either model seamlessly.
- Automated Calculations: SBS Financial Planner can automatically calculate both Top Slice and GAG Pooling models, saving time and reducing the risk of human error in your budgeting processes.
- Customisable Settings: You can tailor the software to meet your specific needs, whether you prefer to top slice by a fixed percentage or adjust funding based on individual school needs within GAG Pooling.
- Detailed Reporting: The software offers advanced reporting features, allowing you to compare and contrast the financial performance of your academies. This is especially useful for assessing the effectiveness of both models over time.
- Benchmarking Tools: Compare budgets across your schools using SBS’s benchmarking tools to identify potential efficiencies and ensure equitable resource distribution, no matter which model you choose.
Both the Top Slice and GAG Pooling models offer advantages and challenges, and the right choice depends on your MAT’s specific needs and strategic goals. With SBS Financial Planner, you don’t have to worry about the complexities of either model—the software is designed to make financial planning straightforward, efficient, and adaptable.
Are you ready to streamline your MAT’s financial management? Try SBS Financial Planner today and take the guesswork out of GAG Pooling and Top Slice.
