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Guidance

Changes to leasing agreements for academy trusts

Updated 7 September 2026

Applies to England

© Crown copyright 2026

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This publication is available at https://www.gov.uk/government/publications/leasing-for-academy-trusts/changes-to-leasing-agreements-for-academy-trusts

Since 1 April 2024, a new international financial reporting standard (IFRS 16 leases) changed how local authorities record leases in the financial accounts of their schools.

Academy trusts are required through their funding agreement to seek consent from the Secretary of State for Education for any borrowing. This is also reflected in the academy trust handbook.

What the changes mean for academy trusts

From 1 September 2026, academy trusts will apply the lease accounting requirements of Charities SORP 2026, which adopts a single lessee accounting model under the revised FRS 102. As a result, the distinction between operating and finance leases for academy trusts as lessees will no longer apply for most leases. Instead, academy trusts must assess arrangements to determine whether they contain a lease and whether any recognition exemptions apply, such as the short-term lease or low-value asset exemptions.

As part of the transition to the new Charities SORP, academy trusts should review all existing arrangements, including those previously accounted for as operating leases. Where an arrangement meets the definition of a lease and does not qualify for an exemption, it may need to be recognised on the balance sheet as a right-of-use asset and a corresponding lease liability from 1 September 2026.

The Secretary of State for Education has granted prior consent for the types of leased assets listed to allow academy trusts to continue taking out leases without additional administrative burdens. These new arrangements have been in place since 1 September 2024.

Academy trusts do not need to make a specific request for consent where a lease is covered in the list. Lease arrangements that are not covered by the categories listed in this guidance will need to be submitted to the Secretary of State for Education for consent. These may include leases relating to land and buildings – further guidance on land disposals is available.

The following assets have been granted prior consent by the Secretary of State for Education:

  • all existing leases in place before 1 September 2024 for items included in this list
  • leases related to IT equipment (for example laptops, tablets, desktop computers, printers, photocopiers, servers, door entry security systems, CCTV Systems, whiteboards and touch screen boards)
  • leases related to telephony (for example mobile phones, landline phones and telephone systems)
  • leases related to catering and cleaning equipment (for example tills, water coolers, vending machines, dishwashers, washing machines, ovens, fridges, freezers, water boilers, small kitchen appliances, crockery and cutlery)
  • leases related to furniture (for example desks, tables and chairs)
  • leases related to bathroom and sanitary items (for example hand dryers, towel dispensers, sanitary bins)
  • leases related to gym equipment (for example treadmills, free weights and weight machines, rowing machines and exercise bikes)
  • leases related to groundskeeping equipment (for example lawn mowers, string trimmers, leaf blowers and salt spreaders)
  • leases related to LED lighting systems or to support renewable activity (for example lightbulbs, control mechanisms and control panels) – consent is granted where the product has been sourced with support from the Department for Education through Get help buying for schools or from a recommended route on our Find a framework website
  • leases related to minibuses and other vehicles for the use of the school
  • leases related to temporary classrooms and equivalent structures (but not land leases they sit on, which may require separate consent – see school land transactions guidance)
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