15 Changes: The Trust Handbook 2026's £174,000 Pay Rule

So the finance meeting is on Tuesday. Right. The papers went out Friday and somewhere, I mean, somewhere on page nine of the CFO's report, there is a line that says, quote, the new handbook is effective from the 1st of October, dash, no significant changes for us. Which is exactly the sentence I would stop the meeting on. Because. Well, because I counted the changes. This is the education commute. Both voices on this show are synthesized. The judgment isn't. I am in the reader's chair today. The document we are reviewing is the Academy Trust Handbook 2026 published by the Department for Education.

Right. It is effective from the 1st of October and it stays in force until it is replaced. And I am in the chair of trustees chair today. I will deliver the scope line first so nobody wastes a commute. This is for Academy Trusts only. Exactly. If you are a maintained school, your finance rules come from your local authority scheme and this episode is not yours. For everyone else, the handbook's own what has changed list has 15 items on it. Yes, 15. And I want to know exactly which ones you or I would be asked about in that Tuesday meeting.

Well, to understand those 15 items, we first need to define the terminology the handbook uses. Because you have to read this text carefully. The document relies on two specific words, and they carry two very different weights. Okay, what are the words? The first word is must. And must is a strict requirement. There's actually a complete schedule of these musts at the back of the document. Right. The second word is should. And should, on the other hand, is defined as minimum good practice. A trust can depart from a should only if it can explicitly show a better way of doing things.

So a must goes straight into the compliance schedule. Yes, exactly. And a should requires documented proof if you choose an alternative route. That sets the baseline for everything we discussed today. It does. In total, five major areas have changed and they are not related to each other. We are looking at inclusion, buying, pay, leaving, and a January deadline. I will take them one at a time. Let us take inclusion first, because, well, that is the word I simply did not expect to see in a finance handbook.

We really don't expect it. You just don't. I mean, when you prepare for a finance meeting, you anticipate discussions on budgets, on deficits, procurement. Inclusion is traditionally positioned in pedagogical documents, not financial compliance manuals. Yeah, no, absolutely. But that shift is precisely why we need to examine it. Paragraphs 1 .16 to 1 .20 are new additions, and they sit directly in the section regarding the board's role. Right. 1 .17 states that trusts, quote, should ensure that inclusion is embedded across all aspects of their provision. And the text explicitly defines this provision as applying to all pupils, particularly those who send, those who are disadvantaged.

and those known to social care. Yeah, that specific wording requires attention. Focusing on special educational needs and disabilities, disadvantaged pupils, and those known to social care means having a deliberate, documented strategy. Exactly. The requirement is that these specific pupils are identified early, they are able to access high -quality teaching and support, and they are supported to participate fully in school life. But importantly, you noted that is a should. It is a should. Moving to paragraph 1 .18. It asks for a trust -wide approach. Okay. The text defines this approach as the consistent identification of need, the deployment of expertise across schools, the monitoring of access and outcomes for those specific groups, and the evaluation of impact.

You have to demonstrate how expertise moves across your different sites, not just within one isolated school building. And then we reach the governance impact. Yes. Paragraph 1 .19 is the specific clause for your Tuesday agenda. Right. The board should ensure that it has sufficient assurance over the quality and consistency of inclusive practice across the trust. Furthermore, trusts should designate a trustee or establish a committee to support oversight of inclusion, including SEND. Wow. Okay. A named inclusion trustee. I mean. That is a governance structure change dressed as a single paragraph.

You cannot just discuss inclusion generally anymore. Adding a designated person or a whole new committee requires formal board action. It does. It requires a nomination, a vote, and a minute in the record. Exactly. And then paragraph 1 .20 shifts the terminology from a should to a must. Oh. Trusts must comply with their legal duties to cooperate with local authorities and other agencies. A must. Yes. Following that mandate, there is another, should trusts are told to work constructively with the local authority on place planning and inclusion strategies and to engage in a timely and transparent manner with requests to develop or adapt provision.

So they require compliance with legal duties to cooperate and constructive engagement on place planning. You cannot just focus inwardly on your own trust. You are legally mandated to work with the council's broader regional strategy. That establishes the first pillar. The handbook now expects the board to be able to evidence inclusion and to be a cooperative partner to the council in writing. You have to prove the assurance exists. That is the first pillar. So what is the second? Let us move from inclusion governance to the actual procurement rules.

Because I suspect this is where that claim of no significant changes starts to show cracks. Buying. And yes, this is where the CFO's no significant changes line falls over completely. We have four new musts in a row. Four of them. Four. Paragraph 2 .27 states that trusts must consider DFE opportunities when making purchasing decisions for goods and services and record their decision making. And record it. Yes. You cannot just make the decision. The consideration itself must be recorded. So the finance office needs a paper trail showing they actively looked at the Department for Education's options before choosing a supplier.

Exactly. Then paragraph 2 .28 gets even more specific. For supply staff. Trusts must use the government commercial agency, supply teachers, and educational recruitment framework unless they have a compliant alternative with rates that do not exceed it. Wait, let us discuss the reality of that rule. Every trust I know books supply staff through whoever answers the phone at 7 in the morning. When a teacher calls in sick at 645, the priority is getting an adult in the room by 830. Of course. Nobody is checking frameworks at that hour.

Well, then from October, the process has to change. The finance office needs the framework, or they need a written alternative that beats it on price. If the person answering the phone at 7 in the morning is booking outside the framework, the finance office later needs to prove that the rate charge did not exceed the framework's rates. The burden of proof is now entirely on the trust. That forces a major operational shift. The person making the morning phone calls needs a pre -approved list from finance. What is the next must?

Paragraph 2 .29 covers energy. Trusts must use the DFE energy for school service or a DFE -approved energy deal unless they have sourced comparable pricing. This applies when contracts renew. Again, the mechanism is the same. Use the central department deal or prove your alternative is comparably priced. Exactly. And paragraph 2 .30 is the long one, focused on technology. Every management information system contract must be aligned with DFE's MIS framework by September 2027. The rule is that a contract expiring before then can only be extended by 12 months as a bridge, and a trust must not use extension options that delay the move to the framework.

Let me clarify that management information system rule because this affects the fundamental operations of every school. It absolutely does. You are talking about the platform that holds all attendance, grading, and pupil data. So if our MIS contract renews in March, the CFO cannot sign the usual three -year deal. Twelve months, then the framework. Yeah. You are forbidden from signing a multi -year extension that pushes your alignment past September 2027. Wow. That creates a logistical challenge for any trust with a contract expiring this spring. You have to sign a 12 -month bridge, which suppliers rarely offer at a favorable rate, and then immediately begin the procurement process to move on to the framework the following year.

That is the second pillar, and it is the one with money attached to it. Supply staff, energy, and the system every school runs on are all steered directly towards the department's own agreements, with the decision recorded either way. The finance office can no longer operate without referencing these central deals. Third pillar, pay. Because that is where trustees actually get challenged. When public money is spent on executive salaries, the scrutiny is absolute. There are three main things here. Paragraph 2 .33 states that executive pay must not increase at a faster rate than that of the Academy Trust's teachers unless there is a clear justification.

Right. Where there is a justification, the trust must seek approval in advance from DFE. So if the teachers receive a certain percentage increase, the executive leadership team cannot exceed that percentage without going to the department first? Correct. Paragraph 2 .34 is new from the 1st of October, and it targets specific salary thresholds. Okay. What are the thresholds? For new appointments where pay exceeds 174 ,000 pounds or where performance -related pay is above 25 ,000, approval from DFE must be obtained before the post is advertised. I want to emphasize that timing.

Before it is advertised. Not before it is filled. Not before the offer is made to the candidate. Before the advert. The trust cannot even publish the job description with that salary attached without prior approval. That changes the timeline of executive recruitment entirely. You have to factor in the time it takes the department to review and approve the salary before you can even begin searching for candidates. What else is in the pay section? Moving to paragraph 1 .46. For trusts with over 3 ,000 pupils. Any CFO recruitment starting on or after the 1st of October should specify that the person should be a qualified accountant.

Okay. That explicitly becomes a must for recruitment from the 1st of September 2027. If a trust plans to appoint a CFO who is not a qualified accountant before that date, DFE must be informed in advance. So the standard is now firmly set on a formal qualification for the chief financial officer role in larger trusts. There are two smaller rules alongside these pay mandates. Electric vehicle salary sacrifice schemes are now permitted, provided there are documented mitigations. And any alternative to the teacher's pension scheme or the local government scheme needs the department's approval.

early in the planning stage and before any proposed changes are communicated to staff. Right. Well, here is my push, and it is the exact push the CFO will make on Tuesday. Let's hear it. When you look at these items, almost none of this is technically new law. True. Trusts were already told to be careful with executive pay. They were already nudged towards frameworks for their purchasing. They were already asked about inclusion by Austed during inspections. The handbook is just writing down what most good trusts do anyway.

So no significant changes for us might actually be honest. Our trust might already be doing all of this. For a trust already operating on the supply framework, already using a department energy deal with a qualified CFO already in post and named send trustee already designated. the board and no severance payments made in the last three years. Yes, it might be honest, but that sentence has to be earned item by item, not asserted. The difference between October and September is that the statement, we do that anyway, now has to be demonstrable.

It has to be proven because a must goes into the schedule and the schedule is exactly what the auditor in the department read. So the test is not, is this new? The test is, could we show it? If the auditor asks about the supply staff booked at 7 in the morning, could we show the written price comparison? If they ask about inclusion, could we show the minutes where the designated trustee was appointed? That is the whole episode in one line. You move from casual compliance to documented evidence.

We move to the fourth pillar leaving. Paragraphs 5 .7 to 5 .14 on severance payments have been expanded and the thresholds are strict. Severance is always a sensitive topic at the board level. What are the new mandates? Any staff, severance with a non -statutory element of 50 ,000 pounds or more, needs the department's prior approval before making any offer to staff. Okay. An exit package of 100 ,000 pounds or above, or an exit package for an employee earning over 174 ,000 pounds, or anything deemed novel, contentious, or repercussive requires prior approval.

And paragraph 5 .14 specifies something vital regarding the terms of these departures. It specifies in the special severance payment, confidentiality clauses are always novel, contentious, or repercussive, and so must not be used unless the trust has obtained prior DFE approval. So the quiet settlement with a confidentiality clause, the agreement where someone leaves the trust and both sides agree not to discuss the circumstances, is a department approval every single time. It is never a decision the trust can make in isolation anymore, and it is never one that stops whistleblowing.

Paragraph 5 .7 also names the rationale test. There can be no severance that could be seen as a reward for failure. Furthermore, for gross misconduct, the only acceptable reason for a payment is legal advice stating that the claimant is more likely than not to win at tribunal. The era of the quiet exit is effectively closed unless the department signs off on it beforehand. You cannot use trust funds to make a problem go away quietly. And the fifth pillar, the January deadline. Paragraph 5 .32 introduces a new transparency measure.

Multi -academy trusts must publish on their website a summary statement by the 31st of January accompanying the trust's annual accounts outlining how funds are distributed across their schools. This statement must match the notes in the accounts, and there's a department example to follow. Let us consider the practical outcome of this rule. Every parent, every head in the trust, and every counselor will be able to read what the center takes and what each school gets. They will see the exact financial distribution across the entire multi -academy trust.

Yes, they will see the percentage retained by the central trust team versus the funding allocated to the individual academies. That is going to start conversations in the heads meeting. When head teachers see the numbers laid out side by side, they will inevitably ask questions about resource allocation. It is meant to. The visibility is the point of the rule. And there is one more line. from Part 6 because it is the enforcement change. What does Part 6 say? Paragraph 6 .17 states that where a trust breaches a duty in its funding agreement, the Secretary of State may issue a direction to the trust specifying the required action.

The trust must comply, and if it does not, there's enforcement by a court order. That is the ultimate escalation. If the trust fails to comply with the direction, the enforcement moves to a court order. We apply the same idea to the three rooms context. How does this handbook update affect different types of trusts when they sit down to review their operations? Well, we can break it down by the specific challenges each setting faces. In a primary trust, a small one, maybe six schools, the inclusion trustee is the live issue.

Paragraph 1 .19 wants a name or a committee, and a small board may currently have neither. That becomes a nominations item for the autumn term, not just a finance item. They have to actively recruit or assign a board member to this specific role to provide the required assurance. In a secondary trust, it is the MIS clause. Paragraph 2 .30 is the exact sentence to put in front of whoever owns the system contract this week, because the three -year renewal that was going to be signed in the spring now has a strict 12 -month ceiling.

Absolutely. The IT and finance departments in the secondary trust have to coordinate their procurement timelines immediately to hit that September 2027 framework alignment. And in a specialist or alternative provision trust, it is the supply framework and the local authority cooperation duty together. The settings that are most reliant on supply staff and the settings most bound into council place planning are the ones where paragraph 2 .28 and paragraph 1 .20 land the hardest. They have to prove their supply rates daily and they have to prove their cooperation with the local authority continuously.

Back to Tuesday then. Page 9 of the report. You are sitting in the meeting and you are looking at the line that says, no significant changes for us. What is the immediate action? Ask the CFO for the 15 -item list from the handbook's own What Has Changed section and put one column next to it. Evidence we already comply or action and date. If the column is blank, no significant changes is not a finding. It is a hope. You need the documented evidence for this schedule. At break, ask whoever is next to the kettle.

Who books our supply staff and do they know the name of the framework they are now required to use? Because if the person making the calls does not know the framework, the finance office is already out of compliance. And the trustee question. If a trustee asked in the December meeting to see the January funds distribution statement in draft form and to see the inclusion assurance the board is supposed to hold, would there be two actual documents or just two conversations about who should write them? The handbook requires the documents.

Four things off the drive. One, the handbook is effective from the 1st of October, Academy trusts only, and its own change list has 15 items. No significant changes has to be proved per item not asserted. Two, inclusion is in the handbook now. It requires a designated trustee or committee, trust -wide assurance, and a must to cooperate with the local authority. Three, buying and pay have new musts. the supply framework, department energy deals, MIS aligned by September 2027, and approval before advertising any post over $174 ,000.

Four severance with a confidentiality clause needs the department's approval every time, and every multi -academy trust publishes how it distributes funds by the 31st of January. Everything is linked in the show notes. We're the trailer, not the film. Both voices on this show are synthesized that judgment isn't. Safe trip in. See you at the gates.