Academy Trust Handbook
Details
The Department for Education (DfE) has released the Academy Trust Handbook (Handbook), the successor to the Academies Financial Handbook. It comes into force on 01 September 2021. Academy trusts will be quite familiar with the annual release, however this year signals a clear shift towards also actively policing governance, as well as financial management.
In the foreword, Baroness Berridge says: “My aspiration is for all schools to have this support and to thrive by being part of a confident and successful multi-academy trust”. This comes off the back of the secretary of state’s speech to the Confederation of School Trusts setting out his ambition to have all academies within a family of schools. As the government moves towards a firmer policy to join academies into a MAT, all trusts should be alert to their obligations under the new Handbook.
The Handbook remains a key document for all academies. The change of name shows that the government is moving its remit beyond finance and deeper into governance. The DfE views the new Handbook as a ‘one stop shop’ for trustees, governors and leaders to access information and guidance. Academies should be aware that the Handbook gives the Education & Skills Funding Agency (ESFA) more power to hold academies and their governance to account.
What do the key changes mean for trusts?
There are various updates to the Handbook summarised on pages 9 to 10. The key updates allow greater power for intervention by the ESFA with the governance of academies. Trust boards are now obliged to approach the regional schools commissioner in advance of the senior executive leaving to allow for advance discussions to take place concerning a trust’s structure, options and plans for recruitment. The Handbook also emphasises the role of parents on trust boards to ensure that the board remains accountable to the local community.
Trusts are now obliged to authorise third parties to hand over documents to the ESFA if it is looking into concerns about finance and governance. It is unknown to what extent this obligation will be drawn down by the ESFA however, it appears to be a broad and wide-reaching tool to obtain third party documentation. Caution should be exercised by any trust before releasing legally privileged documents should they come within the scope of an ESFA request.
Most importantly, the ESFA has moved to a Notice to Improve instead of a Financial Notice to Improve. This broadens the remit of when such regulatory action may be issued and could be confined to concerns over governance alone.
It is clear that with the increased powers given to the ESFA to monitor and impose greater sanctions on academies that the government is keenly eyeing up the potential to impose restrictions on trusts that do not fall in line with their desire for a consolidated academy estate across a range of larger MATs. Even for MATs, the revised Handbook raises concerns that their governance structure can be called into question with a Notice to Improve used to force change.
Finally, there is clear emphasis on trusts obtaining external governance reviews. These can be an excellent opportunity to take stock with fresh eyes to ensure the academy trust is operating in accordance with regulatory requirements across company, education and charity law. It gives a clear opportunity to upskill the trust’s governance knowledge and rectify issues before they lead to enforcement action by the ESFA.
We are experienced in supporting academy trusts in regulatory matters and undertaking detailed governance reviews. If you require any further support on these issues, do not hesitate to get in contact with us.
