The Academy Trust Handbook 2025: What Will Be Changing?

As academies will be aware, the Handbook sets out the framework for financial governance, management and other controls, for academy trusts in England. Compliance with the requirements set out in the Handbook is a condition of academies’ funding agreements, so it is important to understand the Handbook, changes from current version, and be prepared to implement any necessary changes to policies and procedures.

So, the key question is: what has changed in the 2025 version?

Roles and responsibilities

In terms of roles and responsibilities, the Handbook confirms that academies should understand and be working towards, meeting the 6 core digital and technology standards by 2030. The standards relate to, amongst other matters, broadband internet, wireless network, and digital leadership and governance.

Academies are also provided with further guidance on estates management. The Handbook confirms that an academy trust’s estate is both an asset and a mechanism to deliver outcomes for pupils. It is expected that academies will manage their school estate strategically and effectively and maintain their estate in a safe working condition. In doing so, they must comply with statutory duties to ensure the health and safety of building occupants.

The duties of the accounting officer and the definition of regularity, propriety, value for money and feasibility have been updated to more accurately accord with the guidance “Managing Public Money”. Schools should ensure an understand of the guidance and update their policies and procedures as necessary ahead of the implementation of the Handbook in September.

Main financial requirements

In terms of the main financial requirements set out in the Handbook, when carrying out procurement exercises academies have an additional duty to ensure that appropriate due diligence is in place, and should consider Department opportunities when making purchasing decisions.

When it comes to setting executive pay, the Handbook clarifies that decisions about executive pay may be challenged by Department. There is also an explicit requirement to document the academy’s approach to ensuring that levels of pay and benefits is transparent, proportionate and defensible in an agreed pay policy. Schools which do not have an agreed pay policy will need to ensure that a suitable policy is prepared ahead of implementation of the Handbook in September.

Internal Scrutiny

Academies will be aware that they must establish an audit and risk committee which is either a dedicated committee where the academy trust has an annual revenue income over £50 million; otherwise, they may otherwise combine their audit and risk committee with another committee. This position has not changed, although the Department has clarified that the annual revenue income threshold is based on the academy trust’s last audited accounts.

Similarly, the £50 million annual revenue income threshold for internal scrutiny delivery is based on the last audited accounts.

Delegated authorities

In terms of novel, contentious or repercussive transactions, the Handbook sets out that  a repercussive transaction may be a transaction where the trust’s proposal could cause additional costs to arise for other parts of government. The Handbook also provides a helpful link to the Managing Public Guidance, which provides further information in respect of novel, contentious and repercussive transactions and consents.

Cyberattacks

As with any other sector, schools are increasingly at risk of cyberattacks. Previously, when dealing with cyber ransom demands, academies were directed to obtain permission from the ESFA before making any payment. However, the Handbook now explicitly states that trusts must not pay any cyber ransomware demands.

The update to the Handbook likely reflects the unfortunate fact that making payment of ransomware demands rarely leads to the situation being resolved, and with the increased risk of cyberattack schools risk significant losses if demands are paid. Instead, schools should focus on ensuring that steps are taken to keep systems safe from cyberattack. This should include:

·       maintaining and regularly testing your school’s incident response and recovery plan

·       backing up critical data to secure locations that are isolated from your school’s main network

·       training all staff on phishing, data handling, and cyber hygiene, with clear reporting routes for suspected breaches or threats

Intervention

The Handbook also includes a link to new guidance “Financial support and oversight for academy trusts”, which sets out how the Department will work with trusts to identify, at an early stage, any financial issues that might affect the trust, as well as available support and potential action the Department may take.

Potential action includes requesting an action plan and assessing what other actions may be required to improve the trust’s financial oversight and compliance; seeking to recover funds related to fraud or irregular transactions (this is also now confirmed in the Handbook); and issuing Notices to Improve. The Department may therefore consider recovering any funds paid in respect of a ransomware demand.

In terms of the areas where a Notice to Improve may be issued, educational performance will no longer be a governance area pursuant to which a  Notice to Improve may be issued.

A Notice to Improve may still, however, be issued on governance grounds in cases of:

• the trust board not being properly constituted

• trustees failing to comply with their safeguarding duties

• trustees and the executive failing to manage their school estate and maintain it in a safe working condition strategically and effectively

The Handbook also includes a link to guidance and support on sustainability to help academies to have a climate action plan in place by 2025. Again, schools should ensure an understanding of the guidance on sustainability ahead of implementation of the Handbook.

Prepare your school

Academy trusts will need to ensure that they are well placed to comply with the obligations set out in the updated Academy Trust Handbook when it becomes effective in September 2025.

We are well placed to provide advice and guidance to trusts to ensure a full and thorough understanding of their obligations, and to support with the preparation of policies and procedures to ensure compliance, including on Environmental Sustainability and Environment and Climate Education.