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The 2024 update to the Academy Trust Handbook has been released, effective from 1 September. This year’s edition introduces greater flexibility provided for trusts in finance leasing and new rules on internal scrutiny. Here's a breakdown of the key changes to be aware of.
5 key changes in the Academy Trust Handbook from 1 September 2024
1. Finance leases: Trusts can now enter finance leases without prior ESFA approval for assets included on a new DfE-approved list. This aims to simplify the process for trusts looking to improve their facilities.
2. Internal scrutiny: There are new requirements regarding internal scrutiny options for trusts with annual revenue over £50 million. From September 2025, these trusts must use either an in-house internal auditor or a bought-in internal audit service.
3. Qualifications for internal scrutiny: New guidelines clarify that individuals performing internal scrutiny should have relevant professional qualifications or experience. Trustees or peer reviewers involved must also have appropriate qualifications and/or experience relevant to the area being reviewed.
4. Intervention powers: The ESFA now has the authority to issue a Notice to Improve (NtI) if a trust fails to manage its school estate properly.
5. Electric vehicle salary sacrifices schemes: Trusts must seek ESFA approval before implementing new schemes or adding employees to existing ones.
Understanding the updates: What trusts need to know
Finance leases
In the past, trusts couldn't enter finance leases without prior approval from the ESFA. The updated Handbook grants trusts the ability to enter finance leases for specific assets on the new DfE-approved list, without ESFA pre-approval. This will give greater flexibility to facilitate improvements through a simplified finance lease procedure and may release the need to spend capital funding on these items.
As with any borrowing, trusts must assess their financial liabilities carefully. They will still need approval for finance leases outside the DfE-approved list and all leases surrounding leaseholds and tenancy agreements on land and buildings previously in the Handbook.
Internal scrutiny
Trusts have previously been able to use different options for internal scrutiny which weren't required to be a bought-in service. However, from 1 September 2024, trusts with an annual revenue of £50 million should use an in-house internal auditor or outsource internal audit services.
This change becomes mandatory by September 2025. The qualifications required of auditors remain the same as within the 2023 Handbook. All other trusts under the £50 million threshold can continue to use all listed options of internal scrutiny.
Intervention powers: Estate management
The largest change in this year’s Handbook surrounds estate management and safety. Poor estate management and safety could now trigger a Notice to Improve (NtI) from the ESFA. Trusts receive funding through Devolved Formula Capital (DFC) or School Conditions Allocation (SCA) for those that are larger.
Trusts can bid for Condition Improvement Fund (CIF) funding, but this is not guaranteed to be approved. Trusts will need to make sure they are using the capital funding they receive to the best of their ability, adapting plans to address issues with estates.
This is easier said than done for trusts with older buildings and very little capital funding; however, changes to financial leases may help through focusing capital funding on estates and IT. Other capital expenditure could also be financed.
Electric vehicle salary sacrifice schemes
Trusts have previously been able to enter Electric Vehicle (EV) Salary Sacrifice Schemes without ESFA approval. This was allowed where liability falls to the employee if the fulfilment of their contract with the scheme provider is not met. This has been updated in the 2024 Academy Handbook.
All EV salary sacrifice schemes must be approved by the ESFA and trusts must contact the ESFA during the planning stage. This rule applies to new salary sacrifice schemes and accepting additional employees onto an existing scheme.
