Multi-academy trusts have been told they need government approval for any transactions that are deemed to be “novel, contentious and repercussive”.
New government guidance, published today, says MATs are required to follow an overall financial control framework for all central government that sets out how such transactions are defined.
The publication of this comes amid controversy over a plan by the biggest MAT to offer an alternative pension arrangement to its teachers that would allow them to have more take-home pay.
Tes understands that United Learning has been told that the government considers its pension plan to be “novel, contentious and repercussive”, and that the trust has been asked to submit a business case. A government source said a business case has not yet been submitted.
MAT pension plan controversy
Earlier this week it was reported in the that the DfE had written to United Learning to oppose the plan.
Sir Jon Coles, the CEO of United Learning, said this week that the trust had been told by the DfE that the government could ring-fence funding to ensure that it was used for the Teachers’ Pension Scheme (TPS).
Sir Jon said United Learning was clear that this suggestion “has no legal basis”. The trust was said to be considering its options in response.
The government’s new for colleges and academy trusts on “novel, contentious and repercussive” (NCR) transactions sets out which transactions would be considered NCR by the DfE.
The guidance states that MATs are required to follow the financial framework for all central government bodies.
What are NCR transactions?
The definitions for NCR transactions that require DfE approval are:
- Novel transactions are those of which the academy trust or college has no experience or are outside its normal course of business.
- Contentious transactions are those that might cause debate or criticism by Parliament, the public or the media.
- Repercussive transactions are those likely to set a precedent or cause pressure for other academy trusts, colleges or the wider public sector to take a similar approach and hence have wider financial implications.
Only one of these three criteria needs to be met for DfE approval to be required.
What will the DfE consider?
The DfE asks MATs to submit a business case for any NCR transaction, which would include:
- Why it thinks that the proposal may be NCR.
- What the proposal is in detail.
- The business case for the proposal with particular reference to the trust’s value-for-money assessment of the proposal (supported with numbers) and alternative options considered.
- Whether there are precedents elsewhere in central government to support a business case.
- The pros and cons
- Risks and opportunities
Academy trusts seeking approval will need to consider not just the impact on their own trust but also the wider implications for the public sector as a whole, the guidance states.
In the guidance the DfE does not define cases where approval will be given, but makes it clear that considerations “apply to all types of transaction, not just those involving expenditure”.
Should a MAT realise that it inadvertently entered into a NCR transaction without having first obtained approval from the DfE, the guidance says that it should seek retrospective approval.
United Learning has been approached for comment.
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