The Academy Trust Handbook has been updated. Academy trusts must comply with this handbook as a condition of their funding agreement and therefore it is important to note the following key changes:

Financial Reporting  

There is no longer the requirement to submit an academies budget forecast return outturn (“BFRO”) each May. Instead, the trust must submit to the Education, Skills and Funding Agency (“ESFA”) a budget forecast return each July in accordance with deadlines published annually (paragraph 2.15).

Special Payments

Academy trusts must obtain prior ESFA approval before making a special staff severance payment (a payment which is not contractual or statutory) where:

  • An exit package which includes a special severance payment is at or above £100,000; and/or
  • The employee earns over £150,000 (paragraph 5.12).

A guide is available for academy trusts considering making special severance payments which can be found here.


Trusts are now able to enter into indemnities which are in the ‘normal course of business’ without seeking ESFA approval (paragraph 5.19). However, the academy trust must still obtain the ESFA’s prior approval for certain transactions where the indemnities are novel, contentious or repercussive. These are covered in the handbook but an example includes entering into guarantees.

The ESFA expects academy trusts to keep an indemnity register and obtain independent legal advice before entering into any contractual agreement (where it is in the normal course of business or not).

Religious Character 

Paragraph 5.57 of the handbook has been extended from applying to dioceses to all religious authorities. For academies with a religious designation, the provision of services to protect and develop their religious character and ethos which can only be provided by their religious authority are regarded as meeting the 'at cost' requirement.

Need help?

We would recommend that all academy trusts read the new handbook to ensure compliance with the guidance and if there are any questions arising out of the above, please feel free to contact Siobhan Mulrey or Jenny Arrowsmith.