College Financial Handbook 2026 has just landed!

With just over three weeks to go before it comes into force, the 2026 edition of the College Financial Handbook has just been published.  Two headline grabbers:

1. Colleges can resume operating new electric vehicle (EV) salary sacrifice schemes without requiring prior DfE approval, provided they have comprehensive mitigations in place to ensure there are no liability risks or costs to the college, including if there is a change of circumstances to the employee’s position. 

There are rules to comply with, which we will support clients in navigating, but in short this is good news. It has taken a considerable amount of time and lobbying to achieve this outcome – a decision which makes obvious sense in the context of the sustainability agenda and providing additional tools to support recruitment and retention in a sector which is struggling to match pay expectations. 

2. Colleges are recommended to use board assurance frameworks to assist with managing risk.

This is not a new concept, but has gained greater attention in recent months including through messaging from the FE Commissioner.  A good, well used, up to date board assurance framework can help boards and senior leaders to better understand and manage risk.  Stone King and RSM, in collaboration with AoC, last month began running a series of in-person board assurance framework workshops, bringing together leaders, governors and governance professionals.  The second workshop takes place next week and over the coming months we will run a session in every region across England. If you want to know more please contact Tom Morrison.

There are a few other notable changes, including specific requirements around:

• professional qualifications for CFOs
• training requirements for governors – especially relevant committee members – on financial matters
• senior pay, to reflect updated Treasury guidance
• severance payments and associated confidentiality clauses, again to reflect Treasuray guidance
• compliance with pension scheme regulations and an obligation to consult with DfE when introducing  anything other than LGPS or TPS
• the long-trailed removal of the UK Corporate Governance Code from the list of qualifying codes which colleges can choose to adopt
• colleges not paying any kind of ransom or extortion demands including in relation to ransomware

Colleges will now need to work quickly to assess whether their financial regulations and policies remain in alignment with the updated College Financial Handbook.  The Handbook's publication has likely come too late for most colleges to easily secure Board approval for any required changes before the Handbook comes into force.  If the Handbook imposes a higher standard than current internal policies, extra care will need to be taken to ensure compliance with that higher standard  until internal documentation is brought into alignment.