The 2026 edition of the College Financial Handbook (CFH) and Academy Trust Handbook (ATH) did not introduce any major new requirements. Yet they tell us something important about the direction of travel.

While some approval mechanisms vary and certain requirements apply differently between the two sectors, the handbooks present a consistent message.

The Department for Education (DfE) appears increasingly focused on five themes:

• Stronger financial leadership
• Greater organisational resilience
• Tighter scrutiny of public expenditure
• Increasing regulatory oversight of areas historically regarded as matters of institutional autonomy
• Greater transparency and accountability.

Individually, these developments may seem unrelated. Collectively, they give useful insight into how the DfE defines good governance today.

Five key DfE priorities for colleges and academy trusts in 2026

Perhaps the clearest message from both handbooks is that financial leadership will need to demonstrate more clearly its capability and that the governance structure has sufficient appropriate knowledge and skills for effective challenge and oversight.

DfE has set clear requirements for larger colleges and trusts: CFO recruitment exercises should specify an appropriately qualified CFO from 2026, and must do so from 2027. Organisations proposing to appoint a CFO who does not meet the relevant qualification requirements must notify DfE in advance and explain their rationale.

Tied to this are stronger expectations around board financial expertise, committee effectiveness and developing the skills of those involved in financial oversight.

Of course, qualifications alone do not create effective leaders. Many highly regarded CFOs have built successful careers through experience, judgement and deep sector understanding. The message from the DfE is clear - as financial and regulatory complexity increases, financial leadership should be recognised as a specialist profession.

For colleges and trusts, a key challenge will be finding enough qualified people to fill the posts.

The 2026 handbooks firmly place cyber security on the agenda of governors, trustees and audit committees.

Cyber Essentials certification is now an explicit requirement, with annual renewal expected. The DfE has also strengthened its position on ransomware and extortion payments, making clear that such payments must not be made.

While this stance may feel like common sense, it reflects a much broader shift in thinking.

Cyber incidents are now viewed as governance events, not simply technology failures. They can disrupt teaching, affect learners, compromise personal data, create safeguarding risks and significantly damage organisational reputation.

The key question for boards is moving away from, ‘do we have adequate IT controls?’ towards, ‘what assurance do we have that the organisation is resilient when, not if, a cyber incident occurs?’.

Both handbooks significantly raise expectations around the approval, documentation and scrutiny of severance settlements. There is a clear emphasis that such payments should be exceptional, not a way to avoid dealing with difficult management issues.

There is understandable logic behind this approach. Public bodies should be able to demonstrate that decisions involving public funds are justified and capable of withstanding scrutiny.

However, the changes highlight a tension that many leaders will recognise. Sometimes a pragmatic settlement appears the most preferred way to avoid a lengthy, costly and disruptive dispute. The DfE is not ruling out those situations, but it is re-enforcing that pragmatism alone is no longer enough to justify it. The decision must also meet the tests of propriety, regularity and public accountability.

Several changes in both handbooks touch on areas that colleges and academy trusts have historically handled using their own judgement, reflecting a shift towards greater regulatory oversight.

Pensions are a clear example. Both handbooks strengthen expectations around compliance with public sector pension arrangements, and state that trusts and colleges must involve the DfE early if they are considering alternative arrangements.

Supporters will argue this protects employees, promotes consistency and reduces risk. Critics may see this as a sign that the DfE is taking a more hands-on approach in areas where institutions have historically had more freedom.

Whichever side of the coin holds the most truth, it is difficult to dispute that the DfE expects visibility over decisions that could create financial, legal or reputational consequences for the wider sector.

Accountability is a clear theme that connects all the others.

Whether discussing CFO capability, cyber resilience, severance settlements, pensions or senior pay, the underlying question remains, ‘can this decision withstand public scrutiny?’.

Senior pay controls are a useful example. While the latest changes are relatively modest and introduce some welcome flexibility in some circumstances, they reinforce an existing principle rather than changing direction. Decisions involving significant public expenditure must be transparent, evidence-based and capable of being justified.

The DfE increasingly wants organisations not only to make good decisions but also to demonstrate transparency by answering:

• Why the decision was made
• What alternatives were considered
• Who approved it
• How it represents proper stewardship of public funds.

One final signal: electric vehicle salary sacrifice schemes no longer need DfE approval

Hidden amongst the governance requirements, pension controls and approval processes is one small but welcome regulatory message.

Both handbooks confirm that electric vehicle salary sacrifice schemes can go ahead without DfE approval, as long as suitable safeguards are in place.

In a year characterised by stronger controls, this development feels like a rare regulatory green light.

While the new requirements introduce additional oversight, organisations can at least support staff in switching to an electric vehicle without needing to seek permission.

Progress, it seems, now comes with a charging cable attached.

What the 2026 handbooks mean for governance

The most interesting aspect of the 2026 handbooks is not any individual change, but what those changes reveal about the DfE's broader expectations:

• Strong financial leadership
• Organisational resilience
• Transparent decision-making
• Effective governance
• Evidenced stewardship of public money.

Colleges and trusts know that expectations are rising and now need to act fast to make sure governance arrangements evolve quickly enough to keep pace.

How prepared is your organisation for the next phase of education governance?

The expectations placed on colleges and academy trusts continue to evolve. If you would like to discuss the implications of the 2026 handbooks for your organisation, please contact Richard Lewis to explore how RSM can support your governance, risk and compliance priorities.

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