Transactions under National Common Mobilization in educational institutions and academy trusts
New Guidance for Further Education and Academy Leadership
From August 1, 2025, key figures in the UK's further education colleges and academy trusts will be expected to adhere to a new set of financial and governance guidelines, as outlined in the College Financial Handbook 2025. This comprehensive guide, along with governance codes and financial regulations provided by the Department for Education (DfE) and sector bodies, will shape the responsibilities of principals, accounting officers, chief executives, finance directors, and other senior officers.
Governance Requirements
Under the new regulations, colleges must comply with at least one prescribed governance code, such as the Charity Governance Code, the Association of Colleges (AoC) Further Education Code of Good Governance, or the UK Corporate Governance Code (until August 2026, after which colleges will need to adopt either the Charity or AoC FE Code).
Governance Structure
The governance structure of colleges is defined by the Instrument and Articles of Government and Standing Orders, which outline the responsibilities of the Corporation (Board of Governors), the Principal, and senior staff.
Principal/Chief Executive/Accounting Officer Responsibilities
These officers are tasked with financial stewardship, ensuring compliance with funding agreements, managing risk and controls, and reporting financial irregularities or solvency risks to the DfE or funding bodies.
Finance Directors and Financial Leadership
Financial leadership roles, such as finance directors or chief financial officers, must possess the necessary skills, qualifications, and professional membership relevant to publicly funded education. This ensures robust financial management, internal controls, risk management, and oversight processes are in place.
Financial Controls and Oversight
The guidance emphasizes sound governance with clear policies, internal controls, risk management frameworks, whistleblowing arrangements, and both internal and external audit processes to ensure proper use of resources and accountability.
Governance Reform
To enhance governance effectiveness, reforms are being introduced, including term limits for governors, independent recruitment, clearer accountability, and training through national governance qualifications. These measures aim to avoid complacency and improve scrutiny within boards.
Applications and Entities
Applications for academies should be submitted using the customer help portal, while applications for college approval should be made using the Department for Education approvals form. The guidance is intended for colleges, academy trusts, their subsidiaries, academy trustees, college governors, college and academy trust governance professionals (often referred to as 'clerks' or 'directors of governance'), and college and academy trust auditors.
Further education college corporations, sixth-form college corporations, and institutions designated as being in the further education (FE) sector under section 28 of the Further and Higher Education Act 1992 (as amended) fall under the category of colleges.
In summary, the new guidelines aim to ensure that further education and academy trusts maintain financial integrity, adhere to prescribed codes of governance, actively manage risks and financial controls, and uphold accountability both internally and to funding bodies. These requirements are supported by governance structures that emphasize transparency, effective oversight, and continuous improvement through reforms and professional development.
- To enable financial integrity in further education and academy trusts, the new guidelines emphasize the importance of finance directors and other financial leadership roles possessing relevant skills, qualifications, and professional membership.
- In the realm of education-and-self-development, governance reforms are being introduced to improve governance effectiveness, including term limits for governors, independent recruitment, clearer accountability, and training through national governance qualifications.
