Publication of the Academy Trust Handbook 2021

  • Gemma Archer
  • 22 September 2021 11:35

Whilst preparations for academy trust year-ends and upcoming audits are underway, the sector needs to be aware of the changes in the latest iteration of the Academy Trust Handbook (also known as the Academies Financial Handbook) which comes into force on 1 September 2021. Compliance with the Handbook is mandatory as a condition of the funding agreement.

A new name

The Academies Financial Handbook has been renamed this year and will now be known as “The Academy Trust Handbook (also known as the Academies Financial Handbook)”. Baroness Berridge, the Parliamentary Under Secretary for Education outlined this change in her letter to the sector on 10 June 2021, explaining it is “to ensure the title of the Handbook accurately reflects the full range of important content it contains”. This change is intended to emphasise that the responsibilities of trusts and their boards are broader than financial oversight. The Financial Notice to Improve has been renamed the Notice to Improve to reflect that the ESFA can intervene on governance issues beyond financial matters.

New requirements – the ”musts”

Trusts must carry out checks to ensure that their members (and those they are seeking to appoint as members) are not subject to a direction under section 128 of the Education and Skills Act 2008 prohibiting them from taking part in academy trust management.

Trusts must make the agenda for every meeting of the trustees, local governing bodies and committees, the approved minutes of each meeting and any report document or paper considered at each meeting, available for public inspection. Trusts may exclude material relating to named employees or proposed employees, students, pupils or candidates for admission or referral to the academy or any matter which, by reason of its nature, the trustees are satisfied should remain confidential.

In accordance with HM Treasury’s Guidance on Public Sector Exit Payments, academy trusts must obtain prior ESFA approval for staff severence where the exit package which includes a special severance payment is at, or above, £100,000; and/or the employee earns over £150,000.

During an investigation, the ESFA may wish to obtain information or documents from third parties for the purpose of that investigation. Trust must provide ESFA with written authority giving permission for any third party to provide such information and documentation to ESFA or its agents on request of ESFA.

Academy trusts must be aware of the risk of cybercrime, have proportionate controls in place to address the risk and take appropriate action where a cyber security incident has occurred. Permission must be obtained from ESFA to pay any cyber ransom demands.

Other changes

From 1 March 2022, newly appointed senior executive leaders can only be appointed as a trustee by the members, they agree to be appointed and the trust’s articles permit this.

The scheme of delegation should be reviewed annually and immediately when there is a change in management or organisational structure.

Trusts should retender their external audit contract at least every five years.

Confirmations and clarifications

The Handbook includes several areas where existing requirements have been confirmed or clarified to make them clearer.

  • Trusts should have reserved places for parents, carers or others with parental responsibilities in their governance structure and hold elections to fill these as appropriate. Single academy trusts should have at least two such places on the board, whilst multi-academy trusts should have at least two such places on the board, or on each local governing body, where these have been established.
  • The term “clerk” has been replaced with “governance professional”.
  • The information published on the trust’s website relating to employees earning over £100k includes employers’ pension contributions.
  • Where an off-payroll arrangement with an individual exceeds £100k should be included on the website disclosures as if the individual was an employee.
  • Where a trust has a separate finance committee and audit and risk committee, the chair of the audit and risk committee should not be the same person as the chair of the financial committee.
  • Whilst internal scrutiny may be carried out by a trustee, it must not been carried out by the accounting officer, chief financial officer or other member of the senior leadership or finance team.

Reminding trusts of their governance obligations

For the first time, the Handbook includes reminders of a board’s responsibilities in relation to safeguarding, health and safety, and estates management, with links to other guidance and publications.

Trusts are also reminded that they must ensure that enhanced Disclosure and Barring Service certificates are obtained for all staff and supply staff. An enhanced criminal records certificate must also be obtained for academy trust members, trustees and individuals on committees, including local governing bodies.


The Handbook advises Trusts to:

  • Carry out an external review of governance prior to the Board undertaking significant change or where concerns around governance arise.
  • Approach their Regional Schools Commissioner (RSC) in advance of the retirement or resignation of the senior executive leader to discuss their structure and options.

What should I do next?

If you act for academies, you should familiarise yourself with these changes and ensure your clients are aware of them.

How Mercia can help

Our Academies: Audit and Accounts Update course will cover these changes in detail. As well as covering up to date accounting and financial reporting regimes.

You can book the course here.

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