Introduction
Academies Trust Handbook 2022 (“ATH 2022”) applies with effect from 1 September 2022. It is available on ESFA website here and it should be read in conjunction with several other documents:
- Governance Handbook – available here
- Academy Trust Governance – Structures and Role Descriptors – available here
Although the updated Handbook was only published in August 2022 (very close to the application date), the good news is that the changes in it will be of very limited application. However, the many existing requirements of ATH continue to apply and these are helpfully summarised in Part 8 to the ATH which also includes a Top 10 ‘musts’ for chairs and other trustees. We strongly recommend that you review Part 8 as a reminder of the requirements.
Prior approval for staff severance payments (paragraph 5.12)
ATH 2021 introduced a requirement to obtain prior approval for severance payments in certain limited circumstances, in accordance with H M Treasury Guidelines.
The wording has been amended slightly in ATH 2022 as follows:
Academy trusts must obtain prior ESFA approval before making a special staff severance payment where:
- an exit package, which includes a special severance payment is at, or above £100,000 and/or
- the employee earns over £150,000.
The change is to introduce the word ‘severance’ highlighted in bold. The effect is that proposed severance payments to employees earning over £150,000 will only need prior approval if they include a ‘special’ payment, i.e. an amount which is outside of statutory or contractual requirements.
Severance payments to employees at this salary level will only occur very occasionally, but it is clearly very important that HR legal advice is taken, because they are likely to be subject to ESFA scrutiny.
Financial reporting to ESFA (paragraph 2.15)
Some months ago, the ESFA withdrew the requirement to file a Budget Forecast Return Outturn in May each year, leaving the Budget Forecast Return three yearly which is due in July each year.
This change is confirmed in ATH 2022 – no surprise.
Indemnities (paragraph 5.19)
ATH 2022 confirms that trusts are now able to enter into indemnities which are in the normal course of business without seeking prior approval. (Any that are not in the normal course of business still need prior approval). Hence, if your trust is considering entering into an indemnity, it needs to consider carefully whether or not it is in the normal course of business, and you may want to seek advice from us on that matter.
Religious Character (paragraph 5.57)
This change relates to the Related Party Transaction “at cost” rules.
Paragraph 5.57 now reads as follows:
For academies with a religious designation, the provision of services to protect and develop this religious character and ethos, which can only be provided by their religious authority, are regarded as meeting the “at cost” requirement.
The equivalent paragraph in previous versions of the ATH referred to services provided by dioceses and that limited the exemption to Catholic and Anglican schools.
