Innovation and Efficiency

09.07.19

New guidance for academy trusts to ‘crack down on excessive executive pay’

New guidance for setting executive pay has been published by the Education and Skills Funding Agency (ESFA), suggesting trusts must be prepared to cut pay in cases of poor management.

The new guidance sets out key factors that should be used by academy trust boards when setting or reviewing executive salaries so that they are “fair, reasonable and justified.”

It also warns that academy trusts should reduce executive pay for academy leaders if their poor management leads to a deterioration of their trust’s financial position.

Lord Agnew, parliamentary under-secretary of state for the School System said: “Over the past 18 months, we have cracked down on excessive executive pay.

“However, our focus is not only on challenging trusts where we identify disproportionately high salaries, but in providing support to trusts to enable them to make robust, evidence-based decisions about pay.”

READ MORE: Treasury looking to ban six-figure public sector worker pay-offs with £95k cap

“We expect trusts to make the most of this guidance to ensure that their salary levels are publicly justifiable and provide the best value for money for their institution.”

This is the first documents of its kind, and aims to allow boards to be confident and accountable over their decisions in response to increasing pressure over excessive academy executive pay.

Eileen Milner, ESFA chief executive said it would continue to “keep a watchful eye” over executive pay to ensure excessive pay is challenged.

“It is crucial that executive salaries are set at a fair and justified level so that public funding is invested wisely on children’s education.

“Our guidance will help support academies in their decisions on how much executive pay should be set, so that salaries can be set confidently at a reasonable limit.”

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