Value for money means using available resources in a way that delivers the best possible outcomes for pupils. It is not simply about reducing costs.

The approach by the Department for Education (DfE) focuses on ensuring spending decisions are effective, evidence-based and aligned with educational priorities. This includes considering the impact of staffing, procurement, technology, estates and other resources to ensure public funds are used efficiently while maintaining or improving educational quality.

Benchmarking helps trusts compare their spending and performance against similar organisations across the sector.

By reviewing data against peer schools or trusts, leaders can identify unusually high costs, uncover efficiency opportunities and better understand whether resources are being deployed effectively.

Benchmarking can also provide evidence to support trustee decision-making and help demonstrate that key spending choices are delivering appropriate value for pupils.

The most effective approach is to focus on efficiency rather than indiscriminate cost-cutting.

This may involve reviewing procurement arrangements, reducing unnecessary supplier costs, improving workforce planning, making better use of digital tools, or optimising the use of buildings and facilities. Savings achieved through improved efficiency can often be reinvested into teaching, student support, technology or other initiatives that directly benefit pupils.

Staffing costs typically represent the largest area of expenditure for most academy trusts and therefore warrant careful oversight.

Trustees should also regularly review procurement arrangements, estates management, energy costs, technology investments and the use of financial reserves. Effective governance requires boards to challenge assumptions, understand spending trends and ensure significant expenditure can be justified in terms of educational impact and value for money.

Yes. Collective purchasing can help academy trusts secure better prices and reduce procurement costs.

By using approved frameworks or participating in larger purchasing arrangements, trusts may be able to access improved contract terms, lower supplier costs and reduced administrative burdens. This can be particularly relevant for areas such as energy, technology, educational services and temporary staffing, where buying power may generate significant savings.

Effective workforce planning is one of the most important drivers of long-term financial sustainability.

Strategic workforce planning helps trusts align staffing structures with educational needs, reduce reliance on expensive agency staff, anticipate recruitment challenges and make informed decisions about leadership and support roles. A proactive approach can help manage costs while ensuring schools have the staff and expertise needed to deliver high-quality education.

Trust boards should be able to show that major spending decisions were informed, proportionate and supported by appropriate evidence.

Useful evidence may include benchmarking data, business cases, procurement reviews, budget forecasts, board discussions and assessments of educational impact. Maintaining a clear audit trail can help demonstrate effective governance and provide confidence that resources are being managed in pupils’ best interests.

No. Value for money is a governance and leadership responsibility across the entire organisation.

While finance professionals play a key role in providing analysis and oversight, trustees, senior leaders and operational teams all influence how resources are deployed. The strongest outcomes are often achieved when educational, operational and financial decision-making are considered together rather than in isolation.

No. Holding reserves does not automatically indicate inefficient financial management.

Reserves can provide financial resilience, support future investment and help trusts manage unexpected pressures. The key question is whether reserves are held for a clear purpose and

whether trustees can demonstrate that financial resources, including reserves, are being managed strategically to support pupils’ long-term interests.

Trusts should adopt a data-driven approach supported by regular review and challenge.

This includes making effective use of benchmarking tools, reviewing major cost categories, evaluating procurement arrangements, monitoring workforce efficiency and ensuring decisions are documented appropriately. As expectations around accountability and stewardship of public funds continue to increase, trusts that can clearly evidence informed decision-making will be better placed to demonstrate strong governance and financial management.

The Academies Accounts Direction (AAD) sets out how academy trusts must prepare their annual financial statements and related disclosures. It provides the framework for financial reporting, governance reporting and compliance requirements.
Following the AAD is essential because academy trusts are expected to demonstrate transparency, accountability and proper stewardship of public funds. The 2025/26 update contains relatively limited changes, but it reinforces expectations around governance, reporting quality and evidence of compliance.

Yes. Even where changes are not fundamentally altering accounting policies, trusts should review their reporting processes and disclosure requirements before year-end.
Several amendments affect information presented in the accounts, including staff cost disclosures, key management personnel reporting and energy-related reporting. Addressing these requirements early can help avoid year-end reporting issues and reduce the risk of omissions during audit and accounts preparation.

The 2025/26 AAD introduces three notable disclosure changes relating to staff costs.
Payments in lieu of notice must now be included within restructuring costs disclosures. Trusts must also provide full-time equivalent (FTE) banding information for employees earning more than £60,000. In addition, the definition of key management personnel has been expanded to include certain individuals who are not paid through the payroll, such as consultants or agency staff where they perform key management functions.

Key management personnel may now include individuals paid outside a trust’s payroll arrangements if they have significant responsibility for directing and controlling the trust’s activities.
This means trusts should not automatically exclude consultants, interim leaders, contracted executives or agency staff from consideration. Academy trusts should carefully assess roles and responsibilities to ensure disclosures accurately reflect everyone who meets the expanded definition.

Yes, but not within the statutory accounts.
The requirement to include trade union facility time disclosures in academy trust financial statements has been removed. However, trusts may still need to provide this information through other channels, including government returns and information published on their websites. Trusts should therefore ensure reporting processes remain in place even though the disclosure is no longer part of the annual accounts.

Not every academy trust falls within the reporting requirements.
A trust must have annual energy consumption exceeding 40,000 kWh and meet at least two of the following criteria for two consecutive years: turnover above £36 million, assets above £18 million, or more than 250 employees. Trusts that may be approaching these thresholds should monitor their position carefully and prepare reporting processes in advance.

The updated AAD places increased emphasis on behaviour, conduct in public office and the expectations placed on organisations that receive public funding.
In practice, this means academy trusts should be able to demonstrate stronger evidence supporting their regularity and compliance statements. Robust documentation, clear approval processes, well-maintained policies and effective internal controls are likely to become increasingly important in demonstrating that decisions have been made appropriately.

Insufficient evidence can create challenges when preparing regularity statements and responding to audit scrutiny.
Even where a trust has complied with relevant requirements, weak documentation may make it harder to demonstrate compliance. Trustees and senior leaders should ensure important decisions, approvals, controls and governance processes are properly recorded throughout the year rather than attempting to recreate evidence retrospectively.

The most significant reporting changes may still be ahead.
The AAD highlights the forthcoming Charity SORP 2026 and revisions to FRS 102, which are expected to bring broader changes to financial reporting in future years. Academy trusts should begin monitoring these developments now so they have sufficient time to understand potential impacts on disclosures, accounting policies, governance reporting and financial planning.

Yes. Early preparation is likely to make transition easier and reduce compliance risks.
Trustees, finance teams and accounting officers should use the 2025/26 reporting cycle as an opportunity to review governance arrangements, financial reporting processes and data collection procedures. Seeking advice early can help trusts understand upcoming requirements, identify gaps and prepare effectively for future changes arising from the Charity SORP 2026 and FRS 102 revisions.

The key changes are the revised FRS 102 requirements for leases and revenue recognition, higher company size thresholds, the introduction of IFRS 18, and mandatory software-only accounts filing at Companies House. Together, these changes can affect financial reporting, audit requirements, banking arrangements, KPI reporting, and compliance processes. Businesses should assess which changes apply to them and start planning well before their reporting periods are affected.

Any business preparing accounts under FRS 102 should assess the impact of the updated standard. The most significant effects are typically seen where a company has property leases, equipment leases, vehicle fleets, or complex customer contracts. Even where reported profits do not change significantly, the accounting treatment may alter how assets, liabilities, revenue, and performance measures appear in the financial statements.

Bringing most leases onto the balance sheet can increase reported liabilities and change key financial ratios. As a result, existing banking covenants, borrowing limits and internal KPIs may produce different results even where the underlying business has not changed. Businesses with significant leased property or equipment should discuss potential impacts with lenders early to avoid unexpected covenant issues.

Not necessarily. The change is primarily an accounting change rather than a change in commercial reality. Businesses have always had contractual lease commitments, but many operating leases were previously reported off the balance sheet. The revised rules bring these obligations into the financial statements as lease liabilities, making them more visible to investors, lenders, and other stakeholders.

Revenue recognition is moving to a more structured five-step model that focuses on contracts, performance obligations, pricing and the timing of delivery. For straightforward transactions, the impact may be limited. However, businesses with long-term contracts, multiple service components, subscription arrangements, or bespoke customer agreements may need to review how and when revenue is recognised. Contract reviews can help identify areas where accounting treatment may change.

Potentially, yes. Some companies that previously exceeded the thresholds for a statutory audit may fall into a lower size category under the revised limits. However, eligibility depends on meeting at least two of the relevant criteria for the required period, and the rules can be complex. Businesses close to the thresholds should seek advice, particularly if growth, restructuring, or accounting changes may affect their classification.

Yes. This is a commonly overlooked consequence of the FRS 102 amendments. Recognising lease assets on the balance sheet can increase gross assets, which may affect company size calculations. In some cases, a business could move into a larger reporting category despite the increase in the statutory size thresholds. The interaction between these two changes should be reviewed carefully.

  IFRS 18 is a new financial reporting standard that replaces IAS 1 for affected businesses from accounting periods beginning on or after 1 January 2027. It applies mainly to organisations reporting under IFRS and has implications for entities using FRS 101. The standard introduces new presentation requirements, categories of income and expenses, and additional disclosures aimed at improving consistency and transparency in financial statements.

No. IFRS 18 changes how financial performance is presented rather than how profit is calculated. Net profit remains the same, but businesses may need to report different subtotals and explain management-defined performance measures such as adjusted EBITDA. Companies should review reporting frameworks, management reporting packs, remuneration arrangements, and lending agreements that rely on specific performance metrics.

From April 2028, companies will need to submit accounts electronically through approved software rather than using existing filing methods. The changes arise from the Economic Crime and Corporate Transparency Act 2023 and are designed to improve the quality and reliability of information held by Companies House. Businesses that still rely on manual processes or unsupported systems should begin considering how their accounts production and filing processes will operate in a fully digital environment.

Yes. Although some previously proposed disclosure requirements have been relaxed, the move to electronic filing affects companies of all sizes. Small companies and micro-entities should ensure that their accounts preparation process is compatible with commercial software and that internal teams understand future filing requirements. Leaving preparations until 2028 could create unnecessary compliance pressures.

The best time is as early as possible. Some changes are already effective, while others require retrospective information, contract reviews, covenant assessments, or system updates. Early preparation provides time to evaluate impacts on financial statements, tax planning, reporting obligations, audit requirements, banking relationships, and business decision-making. A structured impact assessment can help identify priorities and avoid last-minute surprises.

The LLP salaried member rules determine whether an LLP member is taxed as a self-employed partner or treated as an employee for tax purposes. An individual is classified as a salaried member if all three statutory conditions in sections 863A to 863G ITTOIA 2005 are met, relating to their remuneration, influence within the LLP, and capital contribution. If the rules apply, the LLP must operate PAYE and account for employer National Insurance contributions (NICs).

The Supreme Court’s decision provides important clarification on what counts as ‘significant influence’ under the salaried member rules. It confirms that influence must arise from legally enforceable rights and duties, rather than a person’s seniority, reputation, commercial importance or day-to-day role. This gives LLPs a clearer framework for assessing tax risk and reviewing their governance arrangements.

Yes. Holding a senior title or managing key clients does not automatically mean a member has significant influence for tax purposes. Following BlueCrest, the crucial question is whether that influence is supported by enforceable rights under the LLP agreement or another binding governance arrangement. Without those rights, even highly influential individuals could potentially fall within the salaried member rules.

LLPs should review all documents that define governance and decision-making authority. This may include LLP agreements, side letters, delegated authority frameworks, committee terms of reference, remuneration policies and capital contribution records. Reviewing these documents together can help establish whether members have legally enforceable influence and whether the LLP’s structure supports its intended tax treatment.

Not entirely, but practical influence on its own is unlikely to be sufficient. The Supreme Court emphasised that influence must be rooted in a legal right or obligation. An individual’s day-to-day responsibilities may still be relevant if they arise from a binding governance framework, but informal authority or commercial importance alone is unlikely to satisfy Condition B.

Earlier cases such as Tiffin v Lester Aldridge LLP remain relevant to the wider distinction between partners and employees. However, BlueCrest is concerned with the specific statutory code in sections 863A to 863G ITTOIA 2005. The practical question is therefore not whether an individual looks like a partner in a broad commercial sense, but whether the statutory conditions are met.

If the rules apply, the member is treated as an employee for income tax purposes. The LLP must operate PAYE, deduct income tax and employee NICs, and pay employer NICs. This can create significant additional costs for the firm and may require changes to remuneration structures, governance arrangements or capital contributions.

No. While the rules often attract attention in law firms, accountancy firms and other professional partnerships, they apply to any UK LLP. Investment management businesses, property ventures, consulting firms, creative industry LLPs and other sectors should also consider whether their governance structures and member arrangements comply with the rules.

LLPs should consider obtaining advice when admitting new members, updating governance arrangements, changing remuneration structures, or undertaking a wider tax review. Advice can also be valuable where agreements have not been updated for several years or where the firm’s actual decision-making processes differ from its legal documentation. Regular reviews can help identify risks before they lead to HMRC challenges, unexpected PAYE liabilities or employer NIC costs.