Academy Trust Handbook 2026 and Updated Executive Pay Guidance: Key Staffing Changes Trusts Need to Know

Authored by Michelle Gabriele, Associate Director of People Advisory Services

The Academy Trust Handbook 2026 comes into effect today (1 October) bringing significant changes for academy trusts. While much of the focus is on governance and finance, several changes have key implications for staffing, workforce planning and employment decisions.

On 29^th September 2026, the government also published 3 updated relevant guidance documents relating to executive pay.

•  Setting executive salaries: guidance for academy trusts
• Senior pay controls for academy trusts – guidance to support Trusts in applying senior pay controls for executives
• Approval for senior pay and reward packages in academy trusts: application form and guidance

Key workforce implications include:

Stricter controls on executive pay and pensions (2.33, 2.34 and 2.40 ATH)

Greater scrutiny of executive pay increases. This means that executive pay must not increase at a faster rate than teachers' pay within the trust, without clear justification and prior, written approval from the DfE. On 29^th September, the government produced guidance expanding on this by explaining that Trusts should compare proposed executive pay increases against actual teacher pay increases within their own Trust and be able to demonstrate their methodology and rationale 

Practical implication: Trusts can no longer simply award executive increases based on performance, benchmarking or contractual progression if those increases outstrip teacher awards without first engaging with the DfE.

DfE approval required before a post is advertised for appointments where proposed salary exceeds £174,000, or the pro-rata equivalent for part-time staff.  The same applies to performance-related pay above £25,000.  This updated guidance explains the factors the DfE will consider, what evidence Trusts will need to provide and how applications will be assessed.  The DfE makes clear that trust-specific context, benchmarking, organisational complexity and role impact will all need to be evidenced when cases are submitted and provides guidance on the application process and form here.

Practical implication:  This is a significant shift as the approval must be sought before recruitment begins, rather than simply being a governance consideration after appointment.  Planning time will be needed to complete the necessary application in consultation with your HR Consultant.

Early DfE approval needed for alternative pension arrangements outside of Teachers' Pension Scheme (TPS) or Local Government Pension Scheme (LGPS)

Practical implication: Trusts considering alternative executive pension arrangements should build in time for potential DfE approval to avoid delays to recruitment or reward decisions.

A stronger expectation to use ICFP (2.13 ATH)

Trusts are now expected to use Integrated Curriculum and Financial Planning (ICFP) to support workforce and financial decisions. In the  2025 ATH, boards were only "encouraged" to use ICFP.

Practical implication: ICFP is no longer simply encouraged. Trusts should be able to demonstrate how staffing structures, curriculum delivery and financial sustainability are considered together when making workforce decisions.

New procurement requirements (2.28 to 2.30 ATH)

Trusts must use DfE-backed frameworks such as the  Government Commercial Agency (GCA) approved framework for supply staff. The only exception to this is if the trust has an alternative agreement where rates do not exceed those of the GCA framework.

Practical implication: Trusts should check that agency staffing contracts align with the new procurement requirements and can demonstrate value for money against approved framework rates.

Increased scrutiny of severance payments (5.11 and 5.14)

One of the less-publicised changes in the new Handbook is the increased scrutiny of staff exit payments.

Trusts are now expected to apply the same value-for-money assessment and governance scrutiny to severance payments under £50,000 as those above the DfE approval threshold.

This means: 

• A clear business case
• Evidence that settlement represents value for money
• Legal assessment of tribunal risk
• Robust audit trails and decision records

Practical Implication: Trusts should build in time to ensure the necessary exit strategies are compliant, even if they are below £50,000. Take early advice from your HR or legal team if unsure. 

Confidentiality Clauses

The DfE has also tightened expectations around confidentiality clauses, making clear that special severance agreements containing confidentiality provisions require prior approval and must never prevent whistleblowing or regulatory scrutiny.

Practical implications: For trusts managing restructures, sensitive exits or employee relations disputes, ensuring severance arrangements are properly documented and justified has never been more important.

Key Questions to ask:

• Do our executive pay arrangements comply with the new rules on pay progression? 
• Are any planned recruitment exercises likely to trigger DfE approval requirements?
• Could we clearly evidence and defend our executive remuneration decisions if challenged by auditors, ESFA or the DfE?

Unsure what these changes mean for your trust? Get in touch for practical advice on workforce planning, executive reward, restructures and staffing compliance.