Confidentiality clauses and severance payments in FE colleges and Academy Trusts

When the College Financial Handbook was updated on 22 October 2025, it introduced a significant change to the rules governing severance payments for FE colleges. We explored this further in our article, ‘Rules on severance payments in FE colleges have changed’. We are now turning our attention to the updated rules around confidentiality clauses in both the College Financial Handbook and the Academy Trust Handbook.

What has changed?

Clause 5.12 of the College Financial Handbook and 5.13 of the Academy Trust Handbook now state that: 

Confidentiality clauses associated with staff severance payments:

• Must not prevent an individual's right to make disclosures in the public interest  under the Public Interest Disclosure Act 1998 (whistleblowing)
• That are novel, contentious or repercussive must not be used unless the college/trust has obtained prior Department for Education (DfE) approval; and
• Must not be used to prevent DfE from obtaining sufficient information from colleges/trusts to fully assess payments under its regulatory role

While the first and third bullet points are established points, the second point is new in the context of confidentiality clauses. 

What is novel, contentious or repercussive?

It has long been the case that severance payments which are novel, contentious or repercussive must be referred to the DfE for approval before you can agree to them.  

Both the College Financial Handbook and the Academy Trusts Handbook define novel transactions as “those of which the college/trust has no experience or are outside its range of normal business”. Contentious transactions are those “that might cause criticism of the college/trust by parliament, the public or the media”. And repercussive transactions are “those likely to set a precedent or put pressure on other colleges/trusts or the wider public sector to take a similar approach and hence have wider financial implications, including where a college/trust's proposal could cause additional costs to arise for other parts of government”. 

However, as outlined above, both handbooks now also refer to ‘novel, contentious or repercussive’ in the context of confidentiality clauses.

What does the change mean?

It's not entirely clear whether the clause is intended to mean that all confidentiality clauses are deemed novel, contentious or repercussive, and therefore require DfE approval, or only those that go beyond standard practice. 

Our interpretation is that only clauses which extend beyond typical confidentiality provisions would trigger the need for approval. In our view, standard clauses, such as those preventing the disclosure of confidential information obtained during employment or requiring the terms of the agreement to remain confidential (subject to the usual exceptions like disclosure to immediate family), would not fall within scope. Requiring approval for every agreement would be impractical given the DfE's capacity and so we struggle to see that this is the DfE's intention. 

That said, the wording is ambiguous, and further clarification from the DfE is needed to confirm their intent. We'll let you know if that is forthcoming.

Alexandra Addington is a Practice Development Lawyer at Irwin Mitchell.