The College Financial Handbook: ten key highlights

The much-anticipated CFH has now been published (21 March 2024) and will be scrutinised by colleges across the country.

Partner Ciara Campfield looks at the key takeaways for colleges, including the significant implications for governance and areas remaining for challenge and interpretation.

1. This is not the Academy Trust Handbook, but they are clearly at least close cousins.

2. Colleges are not burdened with the same restrictions preventing academies from entering into leases without ESFA consent (unless novel, contentious and repercussive (NCR)).  

3. The bitesize guides previously published already cover much of the information in this new handbook. 

4. The only obvious departures from those guides are a change to the NCR regime - previously transactions which could reasonably be considered to be novel, contentious or repercussive had to be treated as such. Thankfully, this wording hasn’t made an appearance.

5. Colleges still need to obtain consents such as for borrowing and for certain severance payments.

6. Whilst in some ways it is welcome that, when addressing public sector compliance, it is more about what colleges need to do rather than how to do it; it would be perhaps more helpful to have some more examples of what things do not need consent.

7. What is novel, contentious or repercussive remains a real area of challenge and interpretation remains. 

8. For many, it remains worrying that colleges have uncertainty and a lack of flexibility when it comes to refinancing but the handbook does provide some helpful detail as to how the proceeds of asset disposals can be applied.

9. The handbook isn’t quite as heavy on governance as the Academy Trust Handbook, but it still has significant implications for governance (as do, for example, Accountability Agreements). 

10. Colleges are still independent exempt charities and governors are still the trustees with ultimate oversight. The handbook does not, and cannot, change that. 

You may also be interested in Tom Morrison’s blog on the CFH which can be read here. 

Stone King will be running a series of webinars, speaking at events regionally and nationally and publishing additional articles over the coming months on this important topic. If in the meantime you have any thoughts or questions in relation to the handbook please contact Tom Morrison, Ciara Campfield or any other member of the FE Team at Stone King.