Recent changes to latest version of Academy Trust Handbook impact on settlement agreement terms

Changes in October 2025 include new requirement for DfE approval.

This years (2025) Academy Trust Handbook became effective on 1 September 2025.  It was first published on 25^th June 2025 and was updated on 22 October 2025. This update includes two key changes to the guidance on severance payments to staff of which academy trust leaders should be aware.

For more information on the updated version of the handbook published in June, please see our article: Academy Trust Handbook 2025: what’s new for Academy Trust leaders?

What changes were introduced in October 2025?

The changes are stated to reflect guidance issued by HM Treasury. 

The first change was to confirm that the threshold for prior Department for Education (DfE) approval of exit packages, dependent on earnings, has been increased to apply to employees earning over £174,000 (previously £150,000).

There was also a second change which is likely to have a broader impact: an update on the use of confidentiality clauses, specifically to paragraphs 5.12 and 5.13 of the handbook and to the use of confidentiality clauses within staff severance payments.

The existing restriction remains, that such confidentiality clauses “must not prevent an individual’s right to make disclosures in the public interest (whistleblowing) under the Public Interest Disclosure Act 1998”.

The change introduces two new restrictions, in terms that such clauses:

• “are novel, contentious or repercussive, and so must not be used unless the trust has obtained prior DfE approval;  

• must not be used to prevent DfE from obtaining sufficient information from trusts to fully assess such payments under its regulatory role”.

What does the change mean for Trusts?

It is correct to say that special staff severance payments and compensation payments of £50,000 or more already need DfE’s prior approval. But in practice, how often is that limit actually met? 

Careful drafting of the terms of confidentiality, such as offered by Wrigleys, would mean that DfE need not be concerned about any limitation to the right to make public interest disclosures or restrict either party’s ability to disclosure relevant information to the DfE.

Confidentiality may be a two way street, requiring both an exiting employee and the Trust not to disclose the reason for leaving, the existence of the agreement,  nor its terms (save as permitted).  Where the agreement includes an agreed reference, there may be a corresponding provision which requires the Trust to not deviate from what has been agreed.

The DfE’s statement that the very use of confidentiality clauses is novel, contentious or repercussive will result in every settlement agreement and other agreement relating to a severance payment that uses a confidentiality clause requiring DfE clearance (regardless of the £50,000 threshold). Trusts will need to factor getting prior DfE clearance into every negotiation or both sides will need to agree to forgo any expectation of confidentiality.

If you would like to discuss any aspect of this article further, please contact our Education team on 0113 244 6100.

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The information in this article is necessarily of a general nature. The law stated is correct at the date (stated above) this article was first posted to our website.

Specific advice should be sought for specific situations. If you have any queries or need any legal advice, please feel free to contact Wrigleys Solicitors.