An overview of the Academy Trust Handbook 2025: what’s new and what academy trust leaders need to know

A new Academy Trust Handbook has been published by the Department for Education (DfE) which took effect on 1 September (ATH 2025). This replaces the Academy Trust Handbook 2024 (ATH 2024).

The ATH 2025 sets out regulatory requirements concerning governance, management and audit, which academy trusts are required to comply with under the terms of the model funding agreements. Generally, the changes in the ATH 2025 are clarificatory in nature, providing further explanation on existing obligations, or referencing new/updated guidance documents which have been published since the ATH 2024, rather than seeking to substantially alter policy. Key updates concern:

• DfE expectations for digital and technology standards;
• additional guidance and focus on procurement;
• clarifying the rules regarding special payments;
• clarifying the expectations of the accounting officer with references to Managing Public Money;
• a prohibition on paying cybercrime ransoms; and
• clarifying the requirements for setting executive pay and the requirements for special payments.

There are also changes reflecting the closure of the Education and Skills Funding Agency (ESFA) and the transfer of its functions to the DfE, as well as updates to reference new guidance and other updated regulatory documents.

Those involved in academy trust governance and operations should ensure they are familiar with the ATH 2025 and the updated provisions. For advice on the ATH 2025 or other matters relating to compliance, please contact us.

Overview of the Changes

The key changes for academy trusts to consider in the ATH 2025 are as follows: 

• Digital and technology standards (1.16)  – further information has been included on the expectations of the DfE regarding Digital and Technology Standards, including a specific provision that academy trusts should be working towards six core standards by 2030 for broadband internet, network switching, wireless network, cyber security, filtering and monitoring and digital leadership and governance.
• Estate management (1.20) – a new reference has been included to School estate management standards which academy trusts should be aware of and apply as relevant to their estate management.
• Value for money (1.20) – the obligation that academy trusts must ensure regularity and propriety in the use of academy trust funds has been slightly clarified to make clear that academy trusts must also ensure ‘value for money’ (which was previously referred to but is now clearer).
• Accounting officers  (1.32) – additional wording has been included that accounting officers must be able to assure ‘DfE’s accounting officer’ of high standards of probity in the management of public funds (as well as Parliament and the public, which was a previous requirement of the ATH 2024). Further, it has also been clarified that this particularly applies to ‘regularity, propriety, feasibility and value for money, including economy, efficiency and effectiveness – the three elements of value for money’ rather than just regularity and propriety. The ATH 2025 also now specifically defines regularity, propriety, value for money and feasibility (as per their definitions from Managing Public Money), and provides further definitions to clarify the meaning of ‘economy’, ‘effectiveness’ and ‘efficiency’ in this context.
• Accounting officer’s duty to raise concerns (1.37 & 1.38) – wording has been added to the obligation that accounting officers must advise their board of trustees (in writing) if the board is considering an action which is incompatible with the academy trust’s articles of association or funding agreement. The additional wording clarifies that: ‘This includes where such action conflicts with the duties of the accounting officer, to ensure regularity, propriety, value for money and feasibility’. Further guidance has also been referenced on the role of the accounting officer in Managing Public Money.
• Trust websites (1.49) – it is clarified that whilst academy trusts must publish the register of business and financial interests for members, trustees, local governors and the accounting officer, there is discretion as to whether to publish the interests of other individuals (i.e. the obligation to keep a register of interests applies to ‘senior employees’, but the obligation to publish on the website does not apply to senior employees unless they hold one of the other roles where this does apply).
• Setting a budget (2.11) – the wording has been clarified to make clear that ‘budgets’ (for the current year and beyond) and ‘revised outturns’ (for the full year) must be complied accurately, based on realistic assumptions and be reflective of previous lessons learned. Previously, the obligation just referred to ‘budget forecasts’.
• Investments (2.23) – the ATH 2024 indicated that the board of trustees should follow Charity Commission Guidance CC14 Investing charity money: guidance for trustees. This guidance is still referenced in the ATH 2025 for information, but it no longer explicitly states that the board should follow this.
• Procurement (2.24 and 2.26) – there is an additional requirement that academy trusts must ensure ‘appropriate due diligence is in place’ as a procurement basic. There is also an additional provision that academy trusts ‘should consider DfE opportunities when making purchasing decisions for goods and services’. Various additional guidance documentation is also referred to in relation to procurement.
• Setting executive pay (2.27 and 2.28) – the obligations of the board of trustees regarding the discharge of its duties when determining executive pay, have been clarified to make clear the board’s approach must be ‘defensible’. It has also been made clear that this must be documented in an agreed ‘pay policy’ which sets out a process for determining executive pay. The requirements for the pay policy though are materially the same as the previous requirement to set out a process for determining executive pay.
• Income generation (2.34) – the previous obligation that mainstream boarding places ‘must’ charge on a full cost recovery basis, applying a rate of return of 8% on boarding charges, has been amended to state ‘should’ instead of ‘must’.
• Audit and risk committee (3.6) – the previous obligation, that academy trusts with an annual revenue income over £50 million must have a dedicated audit and risk committee, has been clarified to note that the £50 million threshold is based on the academy trust’s last audited accounts.
• Audit and risk options (3.16) – the ATH 2024 flagged that academy trusts with an annual revenue income over £50 million from 1 September 2025 would be required to be deliver internal scrutiny using any combination of an in-house internal auditor and/or a bought-in internal audit service. This has now been added as a ‘must’ in the ATH 2025 rather than being a ‘should’.
• Accounting officer’s statement (4.12) – it is clarified that this statement is a declaration regarding the responsibilities to ‘DfE’s accounting officer’ as well as to Parliament.
• Requirement to obtain DfE approval (5.1 to 5.3) – the requirements concerning DfE approval for transactions, above delegated authority limits, have been amended to make clear where part or all of a cost is covered through insurance, the relevant limits still apply. It has also been added that for transactions which require advance approval by the DfE or HM Treasury, approval must be obtained before the transaction is agreed and occurs (the ATH 2024 previously stated before the transaction takes place). As DfE may refer some proposals to HM Treasury, it has also been made clear that time should be allowed for this when seeking approval. References to specific transactions which need to disclosed in the academy trust’s audited accounts, have been removed from the ATH 2025 (the academy trust should instead consult the Academies accounts direction on what is required).
• Novel and contentious transactions (5.6) – it has been clarified that novel and contentious transactions must be approved by the DfE before the transaction is agreed and before the transaction occurs (previously the ATH 2024 just stated before the transaction occurred). Additional detail has also been added explaining the circumstances of a ‘repercussive’ transaction – reflecting DfE guidance on novel, contentious and repercussive transactions.
• Special payments (5.6, 5.16 & 5.17) – the ATH 2024 provided that ‘special payments’ included: staff severance payments, compensation payments and ex gratia payments. Rather than stating ‘ex gratia payments’ the ATH 2025 expands this referring to ‘other types of special payments, including ex gratia payments’. Such other special payments are stated to include ‘ex gratia payments’, ‘extra statutory payments’, ‘extra contractual payments’ and ‘extra-regulatory payments’. It is also made clear that such other special payments must be referred to DfE for approval.
• Cybercrime (6.15) – the ATH 2024 provided that academy trusts must obtain the consent of the ESFA to pay any cyber ransom demands. The ATH 2025 now makes clear that academy trusts must not pay any cyber ransom demands.
• Oversight, support and intervention (6.16) – additional wording has been included to reference the Financial support and oversight for academy trusts guidance noting that this explains the approach of DfE for working with trusts to identify financial issues affecting an academy trust.
• Intervention powers (6.17) – the examples of when the DfE may issue a Notice to Improve (Ntl) have been amended to remove the example of ‘trustees lacking the skills, knowledge and experience to exercise effective oversight of the trust’s operations and performance, including educational performance’. The ATH 2024 references to engaging with the sector on the approach to the future intervention regime have also been removed from the ATH 2025.
• Recovery of funds (6.21) – a new section has been included to make clear that the DfE may recover funds where there is evidence of irregularity or fraud.
• (Definitions and Further Reading (Deleted Part 7 and 8) – the glossary of terms included in the ATH 2024 has been removed, as has the final list of further reading documents (although links to relevant guidance is now included in the main body of the ATH 2025 instead). It would also appear that the ATH 2025 is not published as a separate pdf, unlike the ATH 2024 and previous iterations of the handbook.