Academies Accounts Direction 2025/26: Key Changes Every Academy Trust Needs to Know
The Academies Accounts Direction 2025/26 signals another step change in how academy trusts are expected to report, explain and evidence their performance.
This year is less about incremental compliance updates and more about raising the bar on transparency, accountability and insight. The direction of travel is clear: trusts are no longer judged purely on whether disclosures are present, but on whether reporting demonstrates strong governance, financial stewardship and real-world impact.
I was joined by my colleague Glen Bott, and Julia Harnden from ASCL to guide attendees at our annual event for Academy Business Leaders through the key changes in the latest iteration of the guidance.
Alongside ongoing financial pressures, evolving ESG expectations and increasing scrutiny from regulators, the latest updates mean finance and leadership teams need to move early to stay ahead.
One such area is in relation to how academy trusts is how they respond to emerging risks such as cyber resilience, which is increasingly expected to feature in governance and reporting frameworks. Lisa Dargan delivered an eye-opening session on what’s required and how to tackle these risks head on. You can read her insights here.
Here we’re going to refresh your understanding of the Academies Accounts Direction 2025/26.
What is the Academies Accounts Direction?
The Academies Accounts Direction (AAD) is issued annually by the Department for Education (DfE) and sets out how academy trusts must prepare their annual reports and accounts.
It works alongside the Academy Trust Handbook, providing the detailed financial reporting framework that underpins its governance and compliance expectations.
In practice, the AAD:
- defines the required format and disclosures for statutory accounts
- sets expectations for narrative reporting, including the Trustees’ report and governance statement
- establishes rules around areas such as remuneration, regularity and related party disclosures
- is mandatory for all academy trusts, regardless of size
While the Handbook focuses on what you must and should do, the AAD sets out how trusts must communicate and evidence it through their reporting.
Increasingly, this reporting is expected to go beyond technical compliance and demonstrate clarity, accountability and effective oversight.
Key Changes in the 2025/26 Academies Accounts Direction
This year’s updates reflect a broader shift across the sector: from compliance to demonstrable control, insight and transparency.
Trade Union Facility Time
There is no longer a requirement for academy trusts to report on this in their accounts. However, there is still the requirement for applicable trusts to publish this information on their websites and the government’s reporting platform. It’s important you continue to capture and report the information.
Streamlined Energy and Carbon Reporting (SECR)
SECR remains a key focus, aligned with the growing emphasis on ESG and sustainability reporting across the sector. For those larger trusts in scope under the requirements, this means:
- ensuring robust energy data collection processes
- linking carbon reporting to wider climate or estate strategies
- avoiding boilerplate disclosures and providing meaningful narrative
The expectation is shifting from basic compliance to demonstrating environmental awareness and action.
Board accountability: Regularity and Propriety
There is a continued strengthening of expectations around regularity, propriety and value for money. This reflects a broader trend:
- increased DfE monitoring
- more structured intervention where issues arise
- closer scrutiny of financial decision-making
You must ensure that:
- key decisions are well documented
- governance oversight is clearly evidenced
- supporting documentation aligns with disclosures
The underlying message is clear: evidence matters as much as the outcome.
Staff Restructuring Costs
Disclosure requirements around restructuring are becoming more transparent and, in some areas, more granular. You should:
- clearly distinguish between redundancy payments, severance payments (including all PILON payments) and other costs
- ensure consistency between payroll records and disclosures
- ensure consistency of disclosure for the prior year
- provide narrative context where costs are material
Given ongoing financial pressures, these disclosures are likely to receive greater scrutiny.
Higher Paid Staff Disclosures
Expect continued focus on clarity and completeness of higher-paid staff reporting. Common risk areas include:
- incomplete bandings
- inconsistent inclusion of certain types of benefits
- lack of reconciliation to payroll data
There are also now expanded disclosures to include part time employees or part year employees with higher remuneration levels, which is all part of the wider push toward transparency and public accountability in executive remuneration.
Key Management Personnel
Defining and disclosing Key Management Personnel (KMP) remains a critical judgement area. You should revisit:
- who meets the definition of KMP
- whether off-payroll arrangements are appropriately captured
- how total remuneration is calculated and disclosed, including any accrued remuneration
With governance under increasing scrutiny, clear and well-supported KMP disclosures are essential to demonstrate strong oversight structures.
What Academy Trusts Should Do Before Year-End
To stay ahead of the 2025/26 requirements, academy trusts should take a proactive approach ahead of year-end.
Here’s our suggested checklist:
- Review remuneration reporting for completeness and accuracy
- Reconfirm Key Management Personnel definitions and disclosures
- Assess restructuring payments and supporting documentation
- Validate SECR data and narrative
- Update the Trustees’ Report to focus on insight, not just activity
- Consider procurement compliance and value for money evidence
- Review audit trails and supporting evidence for all key disclosures
- Consider how you’ll meet DfE’s core digital and technology standards by 2030 – take a look at the separate article on academies and cyber risk here.
More broadly, this is an opportunity to ensure reporting reflects decision-making, impact and governance effectiveness not just outputs.
Looking Ahead: Charities SORP 2026
Looking beyond this cycle, the upcoming Charities SORP 2026 will bring more fundamental changes for the 2026/27 year.
Early signals suggest:
- greater emphasis on narrative reporting and demonstrating your impact
- increased focus on financial resilience and sustainability
- changes to income recognition approach and accounting for lease arrangements
- stronger alignment between risk, governance and reporting disclosures
For academy trusts, this means preparing for a shift in how financial health, impact and sustainability is presented and understood, not just how it is calculated.
Need Help Preparing Your Academy Trust Accounts?
With expectations rising across governance, reporting and financial transparency, preparing academy trust accounts is becoming more complex and more visible.
Getting it right is no longer just about compliance. It’s about telling a clear, credible story of how your trust operates, performs and delivers impact.
If you need support with your Academies Accounts Direction 2025 requirements, from technical accounting to refining your Trustees’ Report, we can help you approach year-end with confidence.
