Key Changes in the Academy Trust Handbook 2025/26

The newly released Academy Trust Handbook 2025/26 introduces a wide range of updates that all Trust leaders, CFOs, and Trustees need to be aware of and act on. These changes reflect a greater emphasis on transparency, sustainability, digital safety, governance, and financial integrity.

At School Business Services, our professionally qualified Internal Scrutiny team is already supporting Trusts across the country to meet these evolving expectations through expert reviews, actionable recommendations, and strategic assurance.

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Here’s a breakdown of the key updates and how our services can support your Trust:

Sustainability

What’s changed

• Sustainability is now integrated into core governance expectations
• Trusts must develop and implement a climate action plan by the end of the 2025/26 academic year

Things to consider

• Appoint a Senior Leader responsible for sustainability
• Use DfE guidance: Sustainability leadership and climate action plans in education
• Develop and publish your Trust’s climate action plan

How we can help

Our Internal Scrutiny review of sustainability planning evaluates your Trust’s climate strategy, integration with long-term goals, board oversight, and engagement. We ensure alignment with DfE expectations while supporting your journey toward environmental accountability.

Digital and Technology Standards

What’s changed

• Trusts must work towards compliance with six DfE digital technology standards by 2030
• Stronger emphasis on cyber security, data protection, and resilient infrastructure

Things to consider

• Audit current infrastructure and IT security
• Create a roadmap to meet all six digital standards
• Appoint and upskill a digital lead in your Trust

How we can help

We offer Cyber Security, Data Security, and Business Continuity reviews, providing robust assurance across user access, malware protection, remote access, and incident response planning. These reviews help protect sensitive data and ensure compliance with DfE standards.

Estate Management 

What’s changed

• Estates management is now a critical area of governance oversight
• Trusts must address risks like RAAC and ensure maintenance is strategic and risk-based

Things to consider

• Update your estate strategy
• Complete condition surveys and RAAC assessments
• Ensure compliance, accessibility, and long-term asset planning

How we can help

Our Estates Management review assesses your Trust’s strategy, risk prioritisation, statutory compliance, and long-term investment planning. We focus on aligning your estate with your educational mission and sustainability goals.

Accounting Officer Duties

What’s changed

• Clearer definitions align Accounting Officer responsibilities with the Treasury’s Managing Public Money guidance

Things to consider

• Review updated duties for regularity, propriety, value for money, and feasibility
• Understand escalation responsibilities for emerging risks

How we can help

Our Financial Governance reviews assess how well Accounting Officers and Boards understand and discharge their duties, including risk management, internal reporting, and escalation.

Procurement Practices

What’s changed

• The Handbook reflects the Procurement Act 2023, demanding greater transparency, competition, and record-keeping

Things to consider

• Ensure compliance with DfE procurement guidance
• Maintain detailed procurement records and tendering decisions
• Seek external advice on high-value contracts

How we can help

We conduct Procurement and Tendering reviews, testing adherence to policy, legislation, and good governance. Our reviews help ensure value for money and reduce exposure to procurement risk.

Executive Pay

What’s changed

• The Handbook clarifies the Board’s role in setting executive pay, with higher scrutiny and expectations to align with public sector norms

Things to consider

• Benchmark salaries externally
• Avoid excessive pay growth
• Ensure conflicts of interest are fully managed

How we can help

Our Executive Pay reviews assess transparency, benchmarking, conflict management, and documentation. We help your Board establish a justifiable and compliant remuneration process.

Internal Scrutiny

What’s changed

• Income thresholds for Internal Scrutiny must now be calculated from audited accounts
• There’s more emphasis on using findings to improve risk management and governance
• Trusts with income over £50m must use in-house or external internal audit—peer review is no longer allowed

Things to consider

• Recalculate your income threshold using audited figures
• Commission appropriate, professionally qualified scrutiny
• Ensure findings influence governance and strategic decisions

How we can help

Our Internal Scrutiny team is registered with professional bodies including ICAEW, ACCA, and IIA. We deliver risk-based programmes tailored to your Trust’s strategic priorities, providing assurance, recommendations, and governance insights that meet ATH standards.

Repercussive Transactions

What’s changed

• Broader definitions now cover decisions that could set precedents or impact the wider sector

Things to consider

• Evaluate the potential impact of unusual or high-cost decisions
• Seek DfE approval where appropriate
• Refer to Managing Public Money for guidance

How we can help

We review governance over major decisions, helping ensure due diligence, challenge, and alignment with DfE oversight expectations.

Ransomware Payments

What’s changed

• Trusts are prohibited from paying ransomware demands under any circumstances

Things to consider

• Establish a clear no-payment policy
• Train ICT staff and senior leaders
• Include response actions in your cyber plan

How we can help

Our Cyber Security reviews assess your preparedness, governance, training, and response planning—ensuring compliance with the DfE’s prohibition on ransomware payments.

Related Party Transactions (RPTs)

What’s changed

• All RPTs must now be reported to the DfE in advance, with approval required for transactions over £40,000
• Stronger rules on conflict management and financial benefit

Things to consider

• Maintain a complete, current register of interests
• Ensure transactions meet ‘at cost’ rules
• Exclude conflicted individuals from decisions

How we can help

Our RPT reviews test approval processes, declarations of interest, compliance with reporting thresholds, and assurance over transparency and governance.

Financial Leases (Finance Leases)

What’s changed

• Trusts no longer need DfE approval to enter into finance leases from the DfE’s approved list

Things to consider

• Check if your lease appears on the approved list
• Ensure correct accounting under FRS 102 Section 20
• Factor lease costs into long-term financial planning

How we can help

We assess the documentation and accounting treatment of lease agreements to ensure they meet DfE guidance and align with your Trust’s budget forecasting, and test approval processes for leases against internal policies.

DfE Financial Oversight & Support

What’s changed

• Updated guidance outlines the DfE’s Regions Group role in supporting financially struggling trusts, with oversight mechanisms now more formalised

Things to consider

• Be prepared to submit monthly management accounts if under financial scrutiny
• Understand available support (e.g. recovery enablement, short-term advances)
• Know when to expect Notices to Improve or other formal intervention

How we can help

We support Trusts by providing targeted reviews in areas such as budget setting and financial monitoring. We assess whether financial plans are robust, aligned to trust strategy, and supported by effective governance and reporting – helping ensure financial decisions are sustainable and risk-informed.

Let’s Get You Ready

With these changes taking effect from 1st September 2025, with some expectations already in force, it is more important than ever for Trust Boards to evidence that they are actively monitoring compliance, identifying risks, and strengthening governance controls.

Our Internal Scrutiny programme provides independent, risk-based assurance that supports Boards in evaluating how well these updated expectations are being met in practice – from financial oversight to sustainability, cyber security, procurement, and governance.

Whether you require a one-off assurance review in a key risk area or a tailored year-round programme of scrutiny aligned to your Trust’s strategic risks, our professionally qualified, education expert team is here to help.

Get in touch now to discuss how Internal Scrutiny can help your Trust respond confidently to the latest Handbook updates.