Thursday, 10 February 2011

Academy Funding & Costs of becoming an Academy

One of first question many Governing Bodies ask is how much money will we get.

The funding for academies comes in the form of a grant, known as the General Annual Grant (GAG), paid by the Young People's Learning Agency (YPLA). The GAG is made up of different elements, as indicated below:

An amount equivalent to the school's current budget share

By far the largest element of GAG is the school's core funding, know as its delegated budget share. This will be the same as the school's current budget share received from the LA. DfE make a small adjustment to reflect any reduced business rates, paid by an academy as a charitable trust, and for insurance, which is paid separately in GAG.

Local authority central spend equivalent grant (LACSEG)

This is the additional money to cover those central services that the local authority no longer provides. This is not a uniform figure across the country. It varies between LAs and will reflect the amount the LA already holds back to pay for central services. This element of grant is calculated by the Young People's Learning Agency (not the local authority), using a formula, based on an academy's pupil numbers and the amount that the relevant local authority spends on the services and costs. It is not based on the actual costs of the services supplied to the individual school.

This first link on Department of Education website explains Preliminary advice on Academy funding to maintained schools considering conversion to academies including The Principle of Academy funding and the How funding is calculated.

On the department of Education website there are two Microsoft Excel spreadsheet called the Academy funding ready reckoner to calculate the estimated funding without the need to register.

Although each and every School gets a one off grant of £25,000 as part of the Academy conversion process here are some of the ongoing costs you might need to factor in.

Legal Services & Advice

Insurance Costs

Academies are subject to company law and trust law which may attract extra costs

Academies are liable for VAT

Pay for professional premises advice

Pay for HR Services and payroll

Pay for admissions appeals

One off Land transfer Costs

One off Administration of application process

One off Cost of possible rebranding, signage etc

DfE link on Finance FAQ's

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