Education Law Digest – autumn term 2026: Recent guidance

Academy trust handbook 2026: effective from 1 October 2026

The 2026 edition remains the DfE’s primary governance and financial control framework for academy trusts. Compliance is a contractual requirement under the funding agreement, and the document sets out:

• Mandatory financial and governance controls
• Wider statutory duties (safeguarding, SEND, estates, health and safety)
• Delegated authorities and approval thresholds
• Intervention powers of the secretary of state

You can read about the handbook and some key changes for 2026 in Emma Swann‘s, article What’s new in the Academy Trust Handbook 2026?

For HR advisors or senior leaders in schools, who may be negotiating special staff severance payments, there are some important changes of which to be aware.

Key changes for 2026.

Tighter rules on staff severance and senior pay – effective 1 October 2026

The 2026 edition of the Handbook introduces a clearer test for when a special staff severance payment (SSSP) can be justified. SSSP’s in academy trusts are strictly controlled payments made outside of normal requirements when an employee leaves public service.

Academy trusts are able to make such payments, within delegated limits, without DfE approval. However, trusts must still assess whether the payment is in the best interests of the trust, whether the payment is justified based on a on legal assessment of the trust’s chances of successfully defending the case at an employment tribunal and whether the level of payment represents value for money

Where proposed payments exceed the delegated limits or where they are novel, contentious or repercussive (NCR), irrespective of the amount, the same assessment must be undertaken and DfE approval must also be obtained prior to a binding commitment being made.

Trusts must clearly record and retain evidence of the management and approval process, including any legal advice of the likelihood of successfully defending the claim, the reasons for the decision, the supporting evidence, and how value for money was ensured.

Legal Assessment Prospects

Where a legal assessment (“Merits Report“) puts the trust’s prospects of successfully defending a tribunal claim at 50% or higher, a settlement payment should not be offered to the Claimant. However, if a Merits Report finds the prospects of losing are greater than 50%, a settlement may be justified, particularly where the cost of running a defence would itself be high. Trusts should note the payment offered must still be less than the tribunal is realistically likely to award to the Claimant. A significant amendment to the 2026 Handbook is that, if a Trust wishes to make a payment where the Merits Report assesses that the chances of successfully defending the matter in a court or tribunal is more than 50%, the transaction will be deemed NCR and prior approval from DfE must be obtained.

Confidentiality Clauses

Confidentiality clauses in settlement agreements will always be NCR and as such always require prior approval from DfE.

Separately the Handbook provisions in relation to executive pay have been updated.

When setting exectuive pay a trust’s decision must follow a robust evidence-based process and be a reasonable and defensible reflection of the individual’s role and responsibilities. The trust’s approach must be transparent, proportionate and defensible and must be documented in an agreed pay policy.

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Limits on pay increases

The Handbook introduces new limits on pay increases for academy trust executives, aligning executive pay progression more closely with wider public sector pay principles, a change that sits alongside the decision to exclude executive leaders from the new School Support Staff Negotiating Body. Under the Handbook executive remuneration must not increase at a faster rate than that of the trust’s teachers, unless there is a clear justification for it to do so. Where the trust considers there is a justification, it must seek approval in advance from DfE. Similarly, from 1 October 2026, for new appointments within academy trusts where remuneration exceeds £174,000, (or the pro rata equivalent for part-time staff), or performance-related pay above £25,000, approval from DfE must be obtained before the post is advertised.

What to implement:

• Before agreeing any settlement with a payment element above statutory or contractual entitlement, academies and trusts should ensure that they obtain and document a legal assessment of tribunal prospects, as a verbal steer from HR will no longer be sufficient evidence for ESFA/DfE purposes. Depending on the outcome of that assessment prior approval from DfE may be required for such a payment even if it is within delegated limits.
• Review and update settlement agreement templates to remove confidentiality provisons or, if they are to be retained, build DfE sign-off into your settlement timetable, however small the payment.
• Review any standing delegations to executive leaders or local governing bodies to approve severance payments, to ensure they reflect the new thresholds/provisions.
• Review pay policies to ensure that they reflect the provisions of the Handbook in relation to executive pay.

Preparing for strengthened workplace harassment duties

From 30 October 2026, employers will be required to take “all” reasonable steps to prevent sexual harassment. 

With the new “all reasonable steps” standard for preventing harassment in the workplace being introduced, as well as the new standalone duty not to permit third-party harassment of staff expected from 30 October 2026, we are advising clients consider harassment risk assessments this autumn ahead of the commencement date itself.

Schools and Trusts should map out who your staff have contact with beyond colleagues: pupils, parents, visitors, contractors, agency staff and volunteers all count as third parties for these purposes. They should also look to update their harassment policies in line with the changes, and refresh training records.

Make sure your reporting routes are genuinely accessible to support staff working across sites (catering, cleaning, grounds, trust central teams), who can be overlooked in policies written with classroom staff in mind