The Department for Education has issued a Notice to Improve to Mercian Educational Trust, with the correspondence published on Friday 12 December 2025. The move signals closer scrutiny of how the Malvern-based trust runs its finances and governance arrangements.

According to the letter dated 10 November 2025 to the chair of trustees, officials found breaches of the Academy Trust Handbook covering leadership and accounting officer responsibilities, the requirement to appoint a CFO, internal control and internal scrutiny, monthly management accounts, publication of senior pay banding above £100k, and the timely filing and publication of audited accounts. As a result, delegated freedoms are suspended and the trust must seek prior approval for severance or compensation agreements, debt write‑offs, significant asset disposals, long leases, and any carry‑forward or pooling of the General Annual Grant.

For day‑to‑day operations this mainly affects exceptional or non‑routine items rather than classroom spending. Payroll, utilities and contracted services should continue as budgeted, but staff settlements, complex landlord agreements or equipment disposals now require formal sign‑off. Expect slower decision‑making on unusual items and tighter documentation around business cases.

Annex B sets clear milestones: audited financial statements, the management letter, the Academy Accounts Return and the 2024/25 internal scrutiny report are due by 31 December 2025. Monthly management accounts for November 2025 to January 2026 must be provided by end‑January, an SRMA deployment commissioned by December, and the external governance review (commissioned in July 2025) submitted by end‑November.

Beyond the deadlines, the notice expects approval requests to be sent via the department’s portal and a live internal‑scrutiny programme for 2025/26. In practice, leadership teams will need to evidence cash‑flow forecasting each month, explain budget variances promptly and show trustees that controls are working before the notice is lifted.

For families and staff, this reads as corporate housekeeping rather than classroom change. Finance teams will need to prioritise clear communication and workload management while improvement work is carried out. For suppliers-especially local SMEs-payment timetables may tighten as reconciliations and board oversight step up.

There are hard edges to the intervention. Non‑compliance can breach the funding agreement and lead to termination, and cases may be referred to the Charity Commission or Insolvency Service. The trust must also publish the notice on its website within 14 days of GOV.UK publication.

What should readers watch for next? Three markers of progress: management accounts arriving on time with clear variance commentary, an SRMA action plan that is costed and sequenced, and board minutes showing recommendations from the governance review are being implemented. If those move on schedule, the notice should lift.