Most financial decision-making is delegated to operational leadership in academy trusts and colleges, but there are certain transactions that require prior approval from the Department for Education.<\/p>\n\n\n\n
One of these examples is novel, contentious and repercussive (NCR) transactions<\/a>, for which best practice guidance from the government was introduced in March and updated in August.<\/a><\/p>\n\n\n\n It doesn\u2019t appear to have been intended as a major change in approach. NCRs have been in the academy trust handbook for years.<\/p>\n\n\n\n But vagueness over how these provisions would be interpreted meant that schools\u2019 understanding of the requirements has changed over time \u2013 a freedom they will no longer have. <\/p>\n\n\n\n The NCR guidance reiterates and provides more details on the three categories that require consent. They are:<\/p>\n\n\n\n Novel transactions:\u202fTransactions the institution has not previously undertaken or fall outside its typical operations \u202f<\/p>\n\n\n\n Contentious transactions:\u202fTransactions that might attract criticism from stakeholders, including Parliament, the public or media \u202f<\/p>\n\n\n\n Repercussive transactions:\u202fActions that could have broader financial implications for the education sector or set a precedent for other institutions\u202f<\/p>\n\n\n\n While the government generally does not appear to have an overarching philosophy across government departments, the secretary of state has mooted more collaboration and a rising\u202fregulatory expectation on schools, especially academies, when compared to previous recent governments.<\/p>\n\n\n\n This is notably different to health, where there is talk about \u201cearned autonomy\u201d and league tables.\u202f<\/p>\n\n\n\n An example is a recent single central record data breach which affected school staff. Some trusts wanted to pay for fraud protection for their staff, or to replace their passports after details were leaked.<\/p>\n\n\n\n But they are subject to spending restrictions because it hits all the thresholds of the NCR guidance. It\u2019s novel, likely to be contentious and affects other trusts.<\/p>\n\n\n\n While the guidance does not introduce new requirements, it does aim to highlight where the regulatory line is on each element. Associated case studies also require attention. So here are three main takeaways for leaders:<\/p>\n\n\n\n This makes clear without any doubt that the DfE wants you to seek its view as to whether something will fall into one of the above categories \u2013 but especially so for novel transactions.<\/p>\n\n\n\n The fact that a neighbouring trust has done something similar does not mean you will be able to do it without consent. There is very much a focus on your school or trust\u2019s experience and impact of the proposal.<\/p>\n\n\n\n Examples given in the guidance indicate things we suspect trusts would not have previously thought as requiring consent, do need consent.<\/p>\n\n\n\n This includes the waiver of a deduction from wages on a goodwill basis following strike action, in order to avoid further walk-outs and getting staff back to work before the start of a new academic year. The cost of the waiver would be just \u00a310,000, in circumstances where the trust has \u00a33 million reserves. <\/p>\n\n\n\n The examples generally show there is a considerable amount of grey area. And the strong theme is if you\u2019re in doubt, seek a view from the DfE.<\/p>\n\n\n\n The guidance also highlights the role of auditors in the process in more detail than before. While the DfE may not be aware you have failed to obtain consent, it may well come out in the year-end audit and the expectation is that trusts will then obtain retrospective consent. As part of this, the DfE will want to know why consent was not sought at the outset.\u202f<\/p>\n\n\n\n The DfE has both hard and soft regulatory levers to pull on academies, and this guidance shows how easily the position and interpretation on existing regulatory powers and intervention can change without the need for new legislation.<\/p>\n\n\n\n But under the Children\u2019s Wellbeing and Schools Bill, the freedom and flexibility enjoyed by academies is now being tightened further by the government, which wants to establish a more unified education system. <\/p>\n\n\n\n Taken together, it feels like another step by ministers towards reining in the \u2018freedoms\u2019 enjoyed by academy trusts over the past 15 years. <\/p>\n","protected":false},"excerpt":{"rendered":" Guidance on novel, contentious and repercussive (NCR) transactions point to a requirement to ask the Department for Education first, says Philip Wood<\/p>\n","protected":false},"author":70,"featured_media":236430,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"footnotes":""},"categories":[6,3734],"tags":[],"post-theme":[3726],"class_list":["post-236639","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-opinion","category-the-leader","post-theme-the-legal-leader"],"acf":[],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\tWhat\u2019s changed?<\/h2>\n\n\n\n
Key takeaways<\/h2>\n\n\n\n
1. Importance of seeking DfE consent<\/h3>\n\n\n\n
2. Increased grey areas<\/h3>\n\n\n\n
3. Enhanced auditor role\u00a0<\/h3>\n\n\n\n