02 August 2023

New Academy Trust Handbook 2023: Key changes and how they impact your trust

Books on desk with pencils and apple

With the start of the new academic year fast approaching, the Department for Education (DfE) has recently released the Academy Trust Handbook 2023. 

Scheduled to come into effect from 1st September 2023, the updated handbook introduces changes that will have an impact on trust governance and financial management. 

In this blog post, we will explore the key changes and their implications for your academy trust.

New guidelines for trust quality

The DfE has unveiled a set of trust quality descriptions designed to guide trust boards in evaluating their effectiveness. 

These descriptions encompass five areas: high-quality and inclusive education, school improvement, workforce, finance and operations, and governance and leadership. 

Trusts are encouraged to use these guidelines as a framework for ensuring academic excellence and robust governance.

Revisions to board's purpose descriptions

The handbook introduces new descriptions for trust boards’ purpose, emphasising a strategic leadership role in defining the trust's vision, culture, and strategy. 

Boards are expected to exercise accountability and assurance, maintaining oversight of the trust's operations and performance while also being able to challenge it. 

Additionally, the board should actively engage with stakeholders and maintain a strong relationship with them.

Financial governance

The updated Academy Trust Handbook 2023 requires trustees to possess sufficient financial knowledge to effectively hold executive leaders to account. There is also confirmation that a trust’s accounting officer and chief financial officer should not be the same person.

Trusts will benefit from extra time to submit budgets to the Education and Skills Funding Agency (ESFA), with the budget submission deadline moving to the end of August.

The handbook also raises the threshold for related party transactions requiring ESFA approval to £40,000. This change simplifies transactions by removing the need for approval of goods or services supplied by state-funded schools, colleges or universities, sponsoring institutions, or the trust's religious authority (provided that the services are fundamental to your religious ethos and can only be provided by that authority).

Finally, despite no changes being made to the rules, the DfE confirmed its support for GAG pooling and fund redirection. The new handbook states that GAG pooling and redirection of funds “to meet improvements and priorities of need” can be “integral to a trust’s successful financial operating model”.

Focus on estates management

The handbook calls for increased attention to strategic and safe management of trust estates. Trusts are provided with guidance to help enhance estate management practices.

Fewer board meetings

There is also more flexibility offered to trusts meeting less than six times per year, as they are no longer required to explain how they have achieved effective oversight. 

Clarification on 'notice to improve'

Examples of situations that may warrant a 'notice to improve' from the DfE or ESFA are included in the new handbook. These include issues such as improper trust board constitution, safeguarding failures of trustees, trustees lacking the skills, knowledge and expertise to exercise ineffective oversight of the trust’s operations and educational performance, financial difficulties, irregular use of public funds, poor internal scrutiny and breaches of related party requirements.

Final thoughts

As the new academic year approaches, it's important for trust boards to familiarise themselves with these updates and implement strategies to comply with the revised guidelines. 

Here at Wilkin Chapman, our specialist education lawyers offer a comprehensive and holistic approach to all legal issues that schools, academies, and multi-academy trusts (MATs) may face. Contact us to find out more. 

Holly Hilton, Wilkin Chapman LLP
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