Minister warns academies over levels of executive pay

Written by: Pete Henshaw | Published:
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The government has issued a clear warning to academies which have particularly high levels of executive pay – targeting specifically those where a single employee earns more than £150,000 a year.

Multi-academy trusts (MAT) have also been warned that executive pay must not increase at a faster rate than that of classroom teachers.

It comes after Eileen Miller, the CEO of the Education and Skills Funding Agency, recently wrote to all single-academy trusts where remuneration for a trust employee is higher than £150,000. She will shortly be writing to MATs as well on this issue.

A second letter, sent last week from Lord Agnew, the Parliamentary under-secretary for the school system, to the chairs of all MATs in England, warned that not all governing boards were taking sufficient action on the issue of executive pay.

Lord Agnew wrote: “I believe that not all boards are being rigorous enough on this issue. CEO and senior pay should reflect the improvements they make to schools’ performance and how efficiently they run their trusts.

“I would not expect the pay of a CEO or other non-teaching staff to increase faster than the pay award for teachers. I intend to continue to challenge this area of governance. My view is that we should see a reduction in CEO pay where the educational performance of the schools in the trust declines over several years.”

Executive pay in academies has become a controversial issue with a number of instances where CEO pay ranges from £150,000 to more than £220,000 a year.

Furthermore, pay rises in recent years for CEOs have been worth tens of thousands of pounds while teachers’ pay rises have been locked to one per cent.

The issue is only going to grow as more schools are converted. Currently around 70 per cent of secondary schools, including free schools, are academies as well as about a quarter of primary schools.

The National Association of Head Teachers (NAHT) said that the task of setting appropriate levels of executive pay “should not be beyond” the governing boards of academy trusts. It is calling for a national framework to be set-up.

General secretary Paul Whiteman said: “Inevitably the focus goes to a very few high salaries that are not representative of the sector. We need to set our own moral compass on leadership pay. Education is a morally and ethically driven profession. This task should not be beyond us, nor should it be taken away from us because of a very tiny number of high earners.

“Rigorous should not mean cheap. Appropriate reward will recruit and retain the best. Neither a cap on pay nor a blind adherence to the false comparison to the prime minister’s salary would be the right approach. But we do need to set appropriate reference and structural points so that leadership pay is appropriate, fair and transparent.

“There should be a national framework that defines the roles and sets out the pay and conditions of all those employed in our national, publicly funded education system. The public have a right to be reassured that public funds are being used well.”

In his letter, Lord Agnew also signposts MAT chairs to the government’s list of national procurement deals aimed at saving schools money.

He adds: “I want to emphasise the priority that I attach to the responsibility you and your boards have to ensure that your executive teams manage their budgets effectively and deliver the best value for money. I would also ask you to scrutinise any related party transactions, ensuring a full and proper procurement process is followed and that the trust is able to demonstrate the services provided are at cost.”


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