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Guidance
FE transaction approval
requests: required
information
Published 14 August 2025
Applies to England
To decide whether to grant approval for a non-delegated transaction, the
Department for Education (DfE) needs a college to include specific information in its
further education (FE) transaction approval request form. Including this information
will ensure the request is processed as quickly and efficiently as possible.
Follow this process to submit an FE transaction approval request form.
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Further education financial management and data collection
FE transaction approval requests: required information
Department 
for Education
Contents
Novel, contentious and repercussive transactions
Letters of comfort
Special payments
Write-offs and losses
Tax advice
Novel, contentious and repercussive
transactions
In general, a:
novel transaction is one of which a college has no experience or that is outside its
normal course of business
contentious transaction is one that might cause debate or criticism by Parliament,
the public or the media
repercussive transaction is one likely to set a precedent or cause pressure for
other colleges or the wider public sector to take a similar approach and hence has
broader financial implications
This is not an exhaustive list. It is intended to help you to think about the concepts of
novel, contentious and repercussive (NCR) transactions. If your college team is
unsure whether a transaction could be NCR, contact your place-based team lead.
Guidance on NCR transactions is available.
To request approval for a NCR transaction, a college must submit an FE transaction
approval request form.
Letters of comfort
A letter of comfort (LoC) provides a level of assurance that an obligation will
ultimately be met, but does not create a legally enforceable contract.
If a college wishes to provide an LoC to its subsidiary, it must:
submit an FE transaction approval request form
email the letter it proposes to send to the subsidiary to its place-based-team case
manager for Department for Education (DfE) approval
If a college wishes to issue a LoC to its wholly owned subsidiary for a transaction
above the 1% or £45,0000 limit, and that transaction is not NCR, it must meet the
following HM Treasury (HMT) conditions:  
the letter is time-limited, in that the comfort offered cannot be for a period of more
than 12 months
the comfort proposed may concern only the willingness of the parent college not
to enforce any sums owing to it by the subsidiary
the value of the comfort offered may not exceed the value of the current liabilities
of the subsidiary
the LoC is not legally enforceable 
Special payments
Special payments include those that relate to or are:
severance
compensation
ex-gratia
extra-contractual
extra-statutory
extra-regulatory
When a staff member leaves their employment, any non-statutory payments related
to the termination of their employment are special severance payments (SSPs).
SSPs are a category of special payment for which specific financial delegations are
in place.
There are different limits for other types of special payments – for example,
compensation – as set out in part 5 of the college financial handbook. This category
includes out-of-court settlements related to employment tribunals that lead to the
termination of employment, or the settlement of employment tribunals after
employment has been terminated. 
To request approval for a special transaction, a college must submit an FE
transaction approval request form.
The business case should clearly set out the legal advice provided and the legal
assessment of the likelihood that:
a claim will be raised
the college could successfully defend the claim
If the legal advice is that the college is likely to win the employment tribunal, the
transaction approval request is unlikely to be approved. However, an exceptional
value-for-money case may be considered – for example, where the costs incurred
are exceptionally high and settlement would be in the public interest. 
The business case should clearly set out and compare the costs to the college of:
the proposed settlement
successfully defending the claim
unsuccessfully defending the claim
The college should consider all the costs involved, including in those 3 scenarios,
related to:
legal advice
damages
staff time
In the case of retention payments, any request to make such a payment must
demonstrate the size of the payment being offered in comparison to the employee’s
salary. 
Severance payments should be appropriate to the circumstances and not made, for
example, to avoid:
management action
disciplinary processes
unwelcome publicity
reputational damage
The special payments section of the college financial handbook lists the factors that
colleges must consider before making a binding commitment to give a staff member
a severance payment above the statutory or contractual entitlement. A college must
provide detailed information against each of these points to aid the evaluation of its
business case. 
Write-offs and losses
A college should only consider writing off a debt once all other options have been
explored and there is no feasible or value-for-money alternative.
To request approval for a write-off or loss, a college must submit an FE transaction
approval request form.
In developing its business case, the college should consider what additional debt
collection activity it could undertake. The business case should be supported with
evidence and clearly set out why it is better value for money to write off the debt than
to continue to pursue its recovery. Setting out the college’s internal process of
delegations and approvals for write-offs does not constitute a value-for-money
assessment.  
The college should provide a comparison between the:
quantified assessment of the expected costs and benefits of further recovery
action
costs of writing off the debt both already incurred and likely to be incurred in the
future
It may be appropriate for the college to seek legal advice to provide an assessment
of the likelihood of recovery.  
If there are several items within the total debt – for example, learner debt and
provider debt – it should be broken down into individual lines or groups of debt, with
a business case to support each line or group.  
These examples illustrate how the information in such statements could be set out.
Example 1
A fourth round of activity by the college’s debt team is expected to cost £xx per
500 debt lines and recover zz% of totals debts with a value of £10,000. The
success rate of zz% is based on evidence. £xx multiplied by 500 gives a total
expected cost of further recovery action of £aa. The expected benefits of the
further recovery activity are £10,000 multiplied by zz%, giving £bb. The expected
benefits, £bb, of the further round of recovery activity are less than the costs,
£aa, and therefore, there is a value-for-money case for the taxpayer if the college
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were to write off the debt.
Example 2
X company went into liquidation. The college’s assessment [note: this should be
based on advice received from the administrator or liquidator] is that the
company has no assets against which it could claim for the debt owed, so even
though the likelihood of being successful in a claim against the company is high,
there are no assets with which to pay the claim and therefore the expected return
from further activity to pursue the claim is zero. The costs of making a claim
against the company are £yy. There is therefore a value-for-money case for
writing off the debt because further recovery activity would have a cost to the
college but no benefits.
Tax advice
DfE is unable to give tax advice. Colleges retain responsibility for operating within tax
rules, regulations and requirements (usually referred to as ‘compliance’). They are
strongly advised to obtain professional advice in relation to any issue with potential
taxation implications.
As colleges are classified as central government bodies, this advice should explicitly
consider the application of:
the core principles of HMT guidance on managing public money
section 5.6 of the guidance, which refers to tax
any other requirements relevant to the proposal
It may also be necessary or advisable to consult HM Revenue and Customs.
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FE transaction approval requests: required information : Published 14 August 2025

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