Academy Trust Handbook 2023: Is Less More?

Sam Henson ponders the evolution of The Academy Trust Handbook and what recent changes might mean for trust governance.

Blog

06/07/2023

"The indispensable, essential guide for academy trust finance and governance"

This is the term I used a year ago when describing the 2022 release of the Academy Trust Handbook (ATH). For all trusts, compliance is a condition of their funding agreement. Without question, it remains one of the single most important documents holding together the entire multi academy trust (MAT) system. But is it too much, just right, or not enough? Some might have argued the former, but I would now sway towards the latter.

What's New for 2023?

The 2023 handbook introduces some important updates and ensures alignment with the Department's Trust Quality Descriptions. I should declare that I have the pleasure of sitting on the steering group that feeds into the ATH review and this year, like any other, there are some notable key changes:

More emphasis on health and safety: The handbook now emphasizes trusts' responsibility to ensure the health and safety of building occupants.
Clarity on the accounting officer: The handbook now clarifies that the accounting officer (CEO or equivalent) and the chief financial officer must be separate individuals.
The deadline for submitting trusts' budget forecast return has been extended from the end of July to the end of August.
Reduction of the burden on trusts for getting prior approval for related party transactions.
More information on the types of governance failures which can lead to a notice to improve.

More information on these changes is available in our briefing.

The three gone functions

The three 'core functions', so widely used and recognised, have now gone. That isn't a mistake. The focus has shifted from what trustee boards should practically focus on, to placing more direct emphasis on their purpose - but this change in emphasis is only for academy trusts. The core functions still apply for to maintained schools. Instead, we now have the following:

The academy trust board provides strategic leadership of the academy trust
The academy trust board provides accountability and assurance
The academy trust board provides engagement

Three clearly seems to be the department's favourite number! There is more description behind each one, which you can read here. Of course, despite the change in emphasis, in practice trust boards will still be carrying out the 'core functions'.

It’s not what’s in, but what's out!

The ESFA has replaced a previous emphasis on 'shoulds and musts' with mainly 'just musts', meaning:

Guidance on governance matters has been simplified and reduced
The requirement for sharing management accounts with all trustees at least six times per year has been removed (instead, accounts must be shared with the chair monthly and with the full board during their meetings)
Trusts are no longer required to explain if they fail to convene as a full board six times per year

I guess what I am saying is probably the biggest addition to this year's ATH is a whole bunch of white empty space that wasn't there last year. While this might be a positive for the chairs who still insist on printing the thing out each year, the commitment to simplification from the ESFA does mean there is now an absence of some really practical, direct best practice.

Gone but not forgotten

Don’t despair – that stuff is all still mostly there…well somewhere! Many of the best practice recommendations will, we have been assured, be retained via other documents.

It is no secret that the department as a whole is on a mission to make things tidier and simpler, more streamlined and easier for trusts to grasp. The ATH in 2023, therefore, is built around the concept that less is more. In theory, this makes a lot of sense. The sector has spent years being inundated with reams and reams of guidance and all sorts. So the concept of stripping out the 'shoulds' and only leaving the 'musts' is not without merit.

NGA has always championed the ATH as a succinct, helpful document that has consistently improved as a source of practical information. Trust central teams and trust boards can get their heads around it quickly and apply it.

But the slight worry — and it is just a slight worry at this point — is that the stripped out best practice bits won't make their journey over to guidance with the same levels of readership. Time will tell. The beauty of the ATH has always been that the stakes are too high not to comply with it — the early history of the MAT system revealed how some trusts imploded very quickly for not following both the legal and best practice framework set within it.

If simplifying the ATH means we create more scope for not just compliance but evolving good practice on a universal scale, this is a good move, but there is a lingering doubt – removing good stuff feels like a risk. The handbook’s evolution has always carried an increasing emphasis on strong governance – in theory, that hasn’t changed, certainly not intentionally, but the significance of external reviews of governance as a powerful tool for improvement, for example, is now watered down. Where the ATH previously strengthened its directive on separation between members and trustees, specifying rules, preference, rationale and potential impact, now we have a fairly limp instruction with little context or application – “the majority of members should not also be trustees”.

The Academy Trust Handbook remains an invaluable guide for trust governance, but it now needs significantly more hyperlinks to help it on its way. Governance is slightly less visible than it was in 2022, which is a real shame. The ATH is still an essential, must read. But it is pretty much just that. If you are truly wanting (as we all should) to pursue stepping over the boundary of compliant governance, and into the territory of good, highly effective governance, probably the line in the ATH you should pay most attention to is this:

“The handbook has been sharpened and shortened, and trusts should ensure that they are aware of and apply the supplementary guidance signposted throughout the handbook.”