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Last reviewed on 21 June 2021
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The Academies Financial Handbook has been refreshed and renamed. There are no major changes, but you should still be familiar with what’s different in the new handbook. Use our summary to get up to speed.

The Academies Financial Handbook has been renamed as the Academy Trust Handbook.

This article refers to the Academy Trust Handbook 2021, which comes into effect on 1 September 2021. It summarises the changes highlighted on page 9 and 10 of the handbook.

Be aware of the risk of cybercrime

You must:

  • Put in place proportionate controls
  • Take appropriate action where a cyber security incident has occurred
  • Get permission from the Education and Skills Funding Agency (ESFA) to pay any cyber ransom demands

This is set out in sections 6.16 and 6.17 of the handbook.

The ESFA links to further guidance which you might find useful:

The ESFA may obtain information about your trust from third parties

It might do this where it has concerns about financial management and/or governance.

If requested by the ESFA, you must provide it with written authority, giving permission for any third party to provide it with information and documents.

This is explained in section 6.5 of the handbook.

You must get ESFA approval before making certain staff severance payments

This is for severance payments where:

  • An exit package which includes a special severance payment is at, or above, £100,000; and/or
  • The employee earns over £150,000

This is explained in section 5.12.

Your trust is advised to review certain areas more frequently

Your trust should retender its external audit contract every 5 years

As it did under the 2020 handbook, your trust must appoint an auditor to give an opinion on whether your annual accounts give a true and fair view of your trust’s financial position. 

What’s new is the recommendation to retender the contract at least every 5 years. Your trust must consider the relevant points set out in section 4.17 of the handbook when evaluating.

This is set out in section 4.5.

Your trust board should review its scheme of delegation annually

It should also review it immediately where there’s been a change in trust management or organisational structure.

This is set out in section 2.4.

Find out how to write your scheme of delegation here.

Your trust board should have routine external reviews of its effectiveness

While the 2020 handbook recommended an annual review of your board, including its effectiveness, the new handbook emphasises the importance of independent external reviews

These are particularly important before the board undertakes any significant change (e.g. trust expansion), but they should also be conducted routinely as part of a wider programme of self assessment and improvement.

Reviews should also consider the interaction between members and trustees, including the extent to which members can assure themselves that trustees perform their duties effectively.

This is explained in section 1.32.

Other, minor changes introduced in the handbook

The other changes from the 2020 handbook are relatively minor – they mostly either add additional details or change the wording of certain sections.

Changes that are new

  • From 1 March 2022, any newly appointed senior executive leader can only be a trustee if:
    • The members decide to appoint them as a trustee, and
    • The senior executive leader agrees, and
    • The trust's articles permit it
    • (The change here is that you need to meet all 3 criteria – previously it was just up to the members to decide)
  • Where your finance committee and audit and risk committee are separate, the chair should not be the same person (3.10)
    • Your chair of trustees still shouldn't be chair of the audit and risk committee (same as under the 2020 handbook)
  • Internal scrutiny must not be carried out by anyone on your senior leadership team (3.15)
    • It mustn't be carried out by your accounting officer, chief financial officer or finance team either (same as under the 2020 handbook)
  • What you must publish on your website:
    • If your trust has an off-payroll arrangement with someone who’s not an employee, but whose payment exceeds £100,000, the amount paid by the trust for their work must be included in the information your trust is required to publish, as if they were an employee (2.32)
  • If your senior executive leader is planning to leave your trust, your board of trustees should approach your regional schools commissioner (RSC) in advance to discuss its structure and options, including plans for recruitment (1.36)
  • A reminder that your trust should manage its school estate strategically and maintain it in safe working condition, as it’s an asset and a mechanism to deliver outcomes for pupils (1.20)
  • The financial notice to improve (FNtI) has been renamed as the notice to improve (NtI) – this is to reflect that the ESFA can intervene in broader governance issues (6.18)
  • The term ‘clerk’ has been replaced with ‘governance professional’ (1.49)

Changes that are ‘new’ to the handbook, but not to you

The handbook now includes information about trusts' existing responsibilities in a wider range of areas – the ESFA wants it to be more of a one-stop-shop for trusts, so a lot of what’s ‘new’ for the handbook isn’t new for your trust:

Your trust board has a duty to safeguard pupils

The handbook adds a reminder that your trust board has a duty to:

  • Safeguard and promote the welfare of children
  • Have regard to any statutory guidance on safeguarding issued by the Secretary of State 
  • Ensure the suitability of staff, supply staff, volunteers, contractors and proprietors

It also adds that you must make sure you have DBS certificates for:

  • Staff
  • Supply staff
  • Members
  • Trustees
  • Individuals on committees and local governing bodies

And you must make sure trust members aren’t subject to a section 128 direction (this is more explicit in this handbook, but was mentioned in the previous handbook).

This is explained in sections 1.4, 1.15, 1.51 and 1.52 of the handbook.

These requirements were already in place under The Education (Independent School Standards) Regulations 2014 and Keeping Children Safe in Education.

You're responsible for health and safety

As the employer, your trust is responsible for the health and safety of staff, pupils and visitors (section 1.17).

This was already the case under the Health and Safety at Work etc. Act 1974, and was mentioned briefly in the 2020 handbook.

Get more advice on managing health and safety in your schools here.

You should have parents on your board

The handbook makes it clear that you should have ‘reserved places’ for parents, carers or other individuals with parental responsibility in your governance structure (section 1.11).

But, having parent trustees and/or parent local governors was already a requirement in the model articles of association (article 53), and set out in DfE guidance (page 14).

You must make certain documents available for public inspection

These are:

  • The agenda for every meeting of the trustees, local governing bodies and committees
  • The approved minutes of each meeting
  • Any report, document or other paper considered at each meeting

The trust may exclude from any item any material relating to:

  • A named teacher or other employee or proposed employee
  • A named pupil or student at the academy, or candidate for admission or referral to it
  • Any matter which, by reason of its nature, the trustees are satisfied should remain confidential

This has been added as section 2.51 of the handbook, but was already covered in the model articles of association (articles 124 to 125).


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