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Academies: Executive pay in academies

As the academy sector grows so does the level of public scrutiny whether through the Public Accounts Committee or the press.

14 Nov 2017

As the academy sector grows so does the level of public scrutiny whether through the Public Accounts Committee or the press.

The Department for Education (DfE) has for the first time published consolidated annual report and accounts for the academies sector. This gives an overview of the finances of English academies.

One of the statistics that has been referenced is executives pay comparing the number of academies paying £150,000+ for this role (2016: 102 v 111 in 2015).

There has been much debate and comment regarding the levels of pay being received by Accounting Officers and Chief Executive Officers of academy trusts around the country – with the Prime Minister’s salary often used as a benchmark.

The PM as far as we are aware has no experience of running a school and is never a good comparator but one that does make for good headlines!

Funding in schools remains tight and therefore a salary deemed “excessive” or “high” by the media can provide academy trusts with potentially unwanted negative stories and reputational damage.

As more and more pressure is placed on the sector on this subject, there is every possibility that the DfE may decide to put in place an executive pay “ceiling” but for now trustees need to ensure they make sound logic decisions that are supportable in the event of challenge.

What can an academy trust do?

The responsibility lies with the board of trustees and in accordance with the latest AFH the Board must ensure that their decisions about executive pay follow robust evidence based processes and reflect the individual’s role and responsibilities.

The trustees should step back and assess whether the level of salary is appropriate. This is usually achieved through benchmarking against other trusts in the area and country remembering to compare the responsibilities as it is more about what someone does that it is about their title.

The trustees should also look at the academies performance, as with any payment they need to ensure they continue to achieve value for money. Usual indicators are exam results, Ofsted ratings and understanding the journey the academy is on. If the academy is coming from a position of weakness, whether financial or quality, the journey and assessment would be different to one that is outstanding. Therefore, trustees should be asking if a pay increase or bonus is justifiable and not be afraid to say No.

Once decisions have been made and discussed at length, trustees should ensure the evidence and decisions are recorded appropriately and available for inspection, if requested. Where there is heated debate this should be reflected in any minutes.

Always step back when approving minutes and say to yourself “do I remember the meeting based simply on the picture painted by the minutes?” If the answer is no don’t approve them.

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